Importing & Exporting Tips to help you Ship Over Rough Seas Without Getting Sea Sick
by Stephen Bacque, Ph.D., Guest Contributor
Just the thought of shipping your products overseas is enough to make most ‘Sea Sick’ but don’t let it! Importing/ exporting is a great opportunity to grow your business. International trade increases sales and profits, enhances a company’s prestige, creates jobs, and offers a valuable way for business owners to level seasonal fluctuations.
But things can get a bit tricky. The first step you should take before crossing borders is to do your homework. Take these 20 critical factors into account before you begin:
- Get company-wide commitment.
Every employee should be a vital member of your international team, from the executive suite to customer service through engineering, purchasing, production and shipping. You’re all in it for the long haul.
- Define your business plan for accessing global markets.
An international business plan is important in order to define your company’s present status, internal goals and commitment; but it’s also necessary if you plan to measure your results. Grow your U.S. based sales first-before jumping into exporting. This will help build brand awareness.
- Determine how much you can afford to invest in your international expansion efforts.
Will it be based on ten percent of your domestic business profits or on a pay-as-you-can-afford process? Do not chase international sales that are not profitable.
- Plan at least a two-year lead-time for world market penetration.
It takes time and patience to build a great, enduring global enterprise, so be patient and plan for the long haul. Double check foreign currency exchange rates, and shipping cost, defect rate, etc.
- Build a website and implement your international plan sensibly.
Many companies offer affordable packages for building a website, but you must decide in what language you’ll communicate. Only 28 percent of the European population can read English. That percentage is even lower in South America and Asia. Over time, it would be best to slowly build a site that communicates sensibly and effectively with the world.
- Pick a product or service to take overseas.
You can’t be all things to all people. Decide on something. Then stick with it.
- Conduct market research to identify your prime target markets.
You want to find out where in the world your product will be in greatest demand. Market research is a powerful tool for exploring and identifying the fastest-growing, most penetrable market for your product.
- Search out the data you need to predict how your product will sell in a specific geographic location.
Do you want to sell a few units to a customer in Australia or ten 40-foot containers on a monthly basis to retailers in France? Doing your homework will enable you to find out how much you’ll be able to sell over a specific period of time.
- Prepare your product for export.
You should expect to adapt your product to some degree for sale outside your domestic markets before you make your first sale. Packaging plays a vital role in enabling international connections. Make yours the best in its class, and you’ll be able to sell it anywhere in the world.
- Find cross-border customers.
There is no business overseas for you unless you can locate customers first, then you can turn a profit on.
- Establish a direct or indirect method of export.
It all boils down to export strategy and how much control you wish to exercise over your ventures. On the other hand, readiness to seize an opportunity is more important than having your whole strategy nailed down beforehand. Understand which method would best suit your needs.
- Hire a good lawyer, a savvy banker, a knowledgeable accountant and a seasoned import/export transport specialist, each of whom specializes in international transactions. You may feel you can’t afford these professional services, but you really can’t afford to do without them.
- Prepare pricing and determine you’re landed costs.
Be ready to test out your price on your customer. See what reaction you get and then negotiate from there.
Case in point: A toy ‘lasso’ rope sells at full retail in the U.S. for $5.00, in Canada $7.00. Realizing adjustments need to be made, the price is reduced to $5.00 (the company makes less per rope, but sells in greater volume at a big box retailer). The end result sells 40,000 units at full retail (direct to the public) $5.00 US; the company’s landed cost is $1.95 per unit for a profit of $3.05 per unit compared to the domestic cost of $1.25 sold wholesale for $2.50 retailing at $5.00 for a gross profit of $1.25 per unit.
- Set up terms, conditions and other financing options.
Agree on terms of payment in advance, and never, ever sell on open account to a brand new customer. No if-s, and-s or but-s. Just don’t.
- Brush up on your documentation and export licensing procedures.
If you find it too time consuming, hire a freight forwarder who can fill you in on the spot. Ask a lot of questions. Use their expertise to your advantage. It will save you time and money…
- Implement an extraordinary after-sales service
The relationship between your company and your overseas customer shouldn’t end when a sales is made. If anything, it should be just the start of a long relationship which requires more of your attention. The “care and feeding” of your customers will determine if they keep coming back for more.
- Make personal contact with your new targets, armed with culture-specific information and courtesies, professionalism and consistency.
Your goal should be to enter a different culture, adapt to it and make it your own.
- Investigate international business travel tips.
The practical aspects of international business can make or break the success of your trip. In preparing to go boldly where you’ve never gone before, plan accordingly.
- Explore cross-border alliances and partnerships.
In charting your global strategy, consider joining forces with another company of similar size and market presence that’s located in a foreign country where you’re already doing business, or would like to. Gauge your readiness-or willingness-to take on a 50/50 partnership and what it can and cannot do for you.
- Enjoy the international journey without getting Sea Sick!
With a bit of proper preparation-you will be able to sail the Seas to Success… Never forget that you are the most important and valuable business asset you have, and that the human touch is even more precious in our age of advanced technology. Take the best possible care of yourself, your employees, your suppliers and your customers, and your future will be bright, prosperous and happy.
Going global doesn’t have to be a scary proposition. By considering and developing these twenty essential factors before going global, your organization can realize the full potential of globalization and capture dramatic revenue growth.
ABOUT THE AUTHOR:
Stephen E. Bacque, Ph.D.
Stephen E. Bacque Ph.D. is the Founder /CEO of A.S. Bacque Enterprises, Inc. the Bacque Group. ASBEE Toys, Tex Toys and The Great Toy Company-with over 60 products in ‘Big Box’ retailers, and listed on over 14 patents. He is the author of 12 books, and countless magazine articles. Winner of the highly prestigious ‘Entrepreneur of the Year’, NJSBDC’s Small Business Success Award’, Congressional Businessman of the Year’, etc. Featured on the Today Show, CNN, Fox News, Oprah, Leno, Letterman, 20/20, 60 Minutes, The New York Times, The Wall Street Journal, Inc. Magazine, Entrepreneur Magazine, Success Magazine, World Trade Magazine, Inventors Digest, etc.