In the export business, it doesn’t matter if you are a newcomer testing international waters for the first time or an established exporter looking to grow your business abroad. Your main challenge is always to find buyers for the goods or services you provide. Selling in an unknown country is never easy. There are physical distances, cultural differences and language barriers to consider, among other things. Luckily, we live in a time where technological advances have shrunk our world and brought us closer. This means it’s easier to find foreign buyers for your export business today than it was, say, 20 years ago.
This blog deals with the two main components of an effective export business strategy. They are:
To sell a product, you need a market for it. In export, this is a country or countries with a demand for your product. So, how does an exporter go about finding this market? With market research and product analysis. To find a market for your product, ask yourself these questions and find the answers to them:
Find out which country has a demand for your export product. For example, if you are an exporter of basmati rice, then Iran is the top importer of this product from India, followed by Saudi Arabia. If you sell seafood, the United States is the top importer, followed by China. Where can you find this information? The websites of government organisations such as the Agricultural and Processed Food Products Export Development Authority (APEDA) and Marine Products Export Development Authority (MPEDA) are a rich source of such information.
It is not enough to zero in on a country with the highest requirement for your product. You have to make sure demand is consistent and the market is growing. Again, ask yourself:
It is important to think long-term. Instead of focusing on the top importing country, you might want to consider a country with a comparatively smaller market but with the potential for more growth in the future.
A key challenge for an exporter is to decide on the right price for their product. This price must be reasonable, yet competitive. A high price can be competitive if it comes with a high product quality, prompt delivery, specialised packaging and added benefits. Many factors affect the profitability of an export product, such as:
Sometimes, exporters might run into trade barriers when exporting to some countries. These might be in the form of tariff restrictions (such as high taxes) imposed by the importing nation or non-tariff barriers, such as a ban on the entry of certain goods and services, the imposition of import quality regulations, requirements for special licensing, standards, labelling, testing and certification, and so on. For example, the European Union in 2015 banned the import of Indian mangoes after finding fruit flies in consignments. The ban was later lifted. One way to avoid trade barriers is to export to countries with which India has bilateral/multilateral trade agreements that offer regulatory relaxations and other conditions of mutual benefit. Many countries also offer incentives on certain imports to meet domestic scarcity.
Exporters must take into account the economic and political stability of the importing country. Look for indications of unpredictable political and economic scenarios that might harm your prospects. Read up on environmental and legal practices so you don’t receive nasty surprises later on.
Once you’ve settled on a market for your export product, the next step is to find buyers within this market. There are both online and offline ways to find foreign buyers. Being members of the internet generation, let’s look at the online options first:
If social media and online methods are not your cup of tea, there are some tried and tested offline ways of finding foreign buyers. They might take a little more of your time and money, but they’re well worth the effort:
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