Exporting: Organizing your research and ideas

So you have a product that you wish to export. But what do you do now? There are several key things that you need to do to organize your research. In this series of blog posts I will explain a method, there are plenty of ways to doing this, for conducting your research.  The initial stages are very simple and you should focus on two research areas.  How is the product exported from your nation? Where can I export it to?

Can I export my product?

One of the first things you should figure out is if there are any restrictions on exporting your product. The Bureau of Industrial Security might be an initial stop for your research. The Department of Homeland Security and the Department of Commerce can further help you determine if your product can be exported or if there are restrictions on it. Most of the restrictions arise from dual-use items (those that have both civilian and military uses) but restrictions vary.  It is important to do this, you don't want to have your shipment of exports stopped at the port because of export restrictions, you will lose money and will probably not be able to complete your export transaction. The second step  would be to look for any assistance that the government might be providing for exports of your particular product. The Small Business Administration, U.S. Commercial Services and many other government agencies have programs specifically tailored to certain products, if yours falls under this it might make your exporting endeavors a lot easier. This forms the basis of your research, determine what you need to do to get your product through the port and out of the country and determine if the government is willing to help you do this.

Where are my exports headed?

Shipping requires a destination, your products must reach a buyer who is willing to pay a favorable price in order for you to make a profit. The first step is determining the places that you can't export to. The Department of State can be of assistance in determining places where U.S. companies cannot export. Finding a buyer is a little bit trickier. Visiting places such as your local SBDC, trade.gov, U.S Commercial Services Offices, local Chamber of Commerce, foreign trade promotion agencies, etc. are just various ways of finding that essential buyer. The key here is to diversify and use any assistance available.  This requires extensive research and is by far the most difficult part of an export endeavor.  How can I trust the buyer? Will he pay? Do I need to visit the buyer in person before making the deal? Is it a scam? These are just a few of the questions that immediately arise, and these are the questions that your research must answer.  There is always a risk in exporting, as in many business deals, the intent of doing research is not to eliminate risk but to lower its probability by being prepared. Do you want to make sure your buyer pays? Then determine a payment method that will ensure that he pays either up front or when the goods at are the importing port. There are plenty out there, you just need to find one that suits you.

The next entrance in this blog will explain the first step, how to determine if your product can be exported from the U.S

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Please share your comments and opinions,

Thanks for reading

How do I get trade leads?

This is a question that every owner who wishes to export its products asks. How do I find out who wants to buy my product? It’s a simple question with a complex answer. There are numerous options that a company can take to find out who wants to buy their products in the international market.

1. Export Management Company

This is the easiest, and probably the most expensive, option.  There are numerous export management companies in the U.S. and abroad, whose sole purpose is to help you export your product, obviously at a price.  Some of these companies include Amex International Sales Outsourcing (www.amexinc.com), Tradewinds (www.tradwinds-global.com) and Sefco (www.sefco-export.com) .The advantage of using thess companies is that it’s almost a ready-made service. Many of these companies will not only find someone who wants to buy your product but will also provide shipping services and customs brokerage services.  Furthermore many of these companies already have distributors overseas in place to distribute your product. These companies are excellent; however the greatest drawback is the price tag. Although many large and some medium sized business can pay for this service, many small business simply can’t. Researching and comparing prices will help you in determining if this is the right option for you.

2. Federal/ State government Agencies

There are many government agencies that encourage export and attempt to provide export assistance to US companies.  The Department of Commerce (export.gov), the Export-Import Bank, the U.S. Commercial Services and even the Small Business Administration have programs to help you in your exports. The advantages are numerous.  Many of these agencies can help you in conducting the necessary research and finding a buyer. Some even provide capital for you to export. Most of these services are very affordable and many small businesses could easily use them. The greatest drawback of these services is that they are government services, many are subject to current political conditions, and some bureaucracies aren’t exactly “customer friendly”. Furthermore you have to take the first step and although they can help in several ways many of the actions necessary to complete a transaction will ultimately rely on your research, planning and coordination. Understanding your need and your willingness to devote time to engage a government bureaucracy will help you determine if this is the right option for you.

3. Export Brokers

These are specialized service providers.  In full disclosure I belong to this group, but there are advantages and drawbacks to using brokers. Some of the export brokers include my own company Il Esportatore, LLC (www.ilesportatore.com) and Export Trade Brokers (www.exporttradebrokers.com). It is important not to confuse customs brokers with export brokers. Customs brokers are mostly involved with the documentation and freight arrangements necessary to get your product overseas once a deal has been reached, the export broker specializes in getting you the deal.  The advantage is that many of these services are very affordable as many export brokers work on commission (usually no more than 10% of the total value of the deal) and depending on your industry specialization many of these brokers can get you deals that the larger export management companies can’t (either due to contacts in the industry or a better understanding of your product and market). The drawback is that it’s a loose group; the standards of professionalism and expertise that you pay for vary. Some will take the interest of your company to heart, ensuring that you not only export one sale and they get their commission but actually helping you establish a relationship with a foreign buyer that might generate further sales for you, even if it means no commission for the broker. Others will simply take their commission and run, even if your product ends in the wrong port of the wrong nation.  The nature of your product and your willingness to devote time to get to know the broker will help you determine if this is the right option for you.

Exporting is not easy, it requires consistent research, networking and the willingness to try new things, and sometimes fail at those new endeavors. Export Management Companies, Governmental organizations and Export Brokers are just some of the entities out there that can help you achieve your exporting goals. Deciding which one to use will require, once again, some research on your part.

I look forward to your comments,
V/R
Juan A. Salva