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So, you want to increase sales by expanding into other markets outside the United States, but you don’t know how to get started, who to get help from or even what questions to ask.

Exporting is not as difficult as you might think, but it does require careful planning and forethought. The first step is to design a well-thought-out marketing plan. The marketing plan should address the following questions:

  • What countries will be targeted?
  • Will you market your product yourself or use an intermediary?
  • Present a concise summary of the business opportunity
  • What laws, regulations, licenses and cultural differences do you need to consider?
  • How much will it cost to get your product there?
  • What are the best resources for help?

What countries are best?

Go to the local library or contact the Department of Commerce and ask for statistics regarding exports. Identify the fastest-growing markets for your products.

Find out about the sources of competition. Do U.S. companies already have a foothold there? Is there strong domestic production of your product? What major countries will you compete against?

It’s best to narrow your list of target countries to fewer than 10 countries. If you are new to exporting, two or three may be enough to get started. Don’t overlook two of the easiest countries to get started with − Canada and Mexico.

Direct or indirect marketing?

There are two types of exporting: direct and indirect. The main advantage of direct exporting is keeping control over the export process. While requiring more involvement on your part, you can expect higher profit margins and will have the benefit of establishing direct relationships with overseas buyers. If you decide to export directly, you will want to explore the following:

  • Foreign Sales Representatives. They are very similar to manufacturers representatives in the U.S.
  • Foreign distributors. You can get lists of distributors from the Department of Commerce or the local chapter of the World Trade Association.
  • Foreign retailers.
  • Direct sales to end users.
  • Trade Missions. These generally involve a group of businessmen traveling to a foreign country for the purpose of establishing contacts and customers. They are usually organized by trade groups and organizations. These are highly recommended and can be extremely effective. Indirect exporting uses the resources of others to get your products sold in exchange for a percentage of the profits. There are three avenues to consider for indirect exporting.
  • Export Management Companies. There are over 2,000 Export Management Companies in the US. Most are small and may specialize by product or country. For a fee these companies will solicit and transact business in the name of a manufacturer. The best EMCs know their markets and products and have established networks of distributors.
  • Export agents, merchants and re-marketers. These agents purchase products directly from the manufacturer and repackage the products to their own specifications. They assume all the risk for the overseas transactions. However, you forfeit considerable control and have limited if any say about how your product is priced or positioned in the marketplace.
  • Joint Ventures. This is an arrangement in which one manufacturer distributes another company’s product. Successful arrangements usually require that product lines be complementary and appealing to the same customers.

Regulations and cultural differences

Call the Bureau of Export Affairs. Ask if there are any trade restrictions that you should be aware of concerning your product. Ask whether you can export under a General License, which means no special registration is needed, or whether a validated license is required. They will guide you on how to apply for a specific license if it is necessary.

Go to the library and read up on the cultural differences and business practices of the countries you want to import your product. This is a very important step many business owners overlook.

Contact the Department of Commerce. Ask if you will need to be represented by an agent or distributor. Many countries require that you go through a distributor to do business in their country. If one is required, the DOC can supply you with a list of agent/distributors for different countries.

How to get your products there

The type of product you make and how soon it needs to get there will determine whether you ship by air or sea. Use the help of freight forwarders. Ask about freight costs, port charges, consular fees, foreign tariffs, documentation, packaging, labeling and insurance. It is important to know ahead of time how much it will cost to get your product to its destination.

Resources for help

Trade organizations that help are the Department of Commerce and the World Trade Association. Also, visit the libraries in your area for more information on exporting.

This article is not intended to tell you everything there is to know about exporting but to guide you in the right direction to get started. If you carefully consider these issues in developing your marketing plan, you will be well on the way to developing a successful export market for your product.

For more information, contact our team of industry experts at Impact Capital Group

Michael Cohen

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