As of 2015, the US Census Bureau estimates that there are well over seven billion people (7,253,260,112) living on earth. You might be doing well in your domestic market, but all things considered, that market is probably just a tiny fraction of the global economy. There’s room to grow. One option is by ramping up your efforts domestically… and another is taking your proven business model and breaching overseas markets.
These overseas markets are lucrative – that goes without saying. More people means the potential for more sales. But with reward comes risk. Sending your products all over the globe opens you up to a host of different risks, challenges, headaches… and good old fashioned scams.
If you’re considering exporting, below is a comprehensive list of things to consider. Some you have probably already thought of, whereas others will definitely make you think.
1 – Is it the next logical step?
When examined at the surface, exporting seems like a dream. Instead of targeting just your domestic market, you can go after a much larger one. And a larger market means more sales, right?
In theory, yes… but really, no. Exporting is only recommended when you’ve mastered your domestic market. Testing close to home is much easier, usually cheaper, and for the most part, far less risky. To a new business, all of those factors are important.
You can jump right into exporting, but beginners should stick to domestic markets. Get a solid model and platform to launch from, then take that model and your expertise into overseas markets.
2 – Can I handle the struggle associated with exporting?
Let’s talk about the “struggle” of exporting – as in, running your domestic business while also making moves to expand overseas.
Exporting is not a walk in the park. There will be legal hoops to jump through, headaches that you have to personally take care of, and financial risk at every turn. You need both time and money to bring your business into new markets.
If you feel as if you’re stagnant, then that might be fine. After all, if a business isn’t growing, it’s dying. But if you still don’t have your domestic affairs under control, exporting won’t work for you, and it might even hurt your domestic bottom line.
We can’t speak for you personally, but do a very real assessment of how much money and time you and your staff could commit on a weekly basis to expanding your operations. If you don’t have a lot of either, then you might want to hold off on exporting until you do. The last thing you want is to become overwhelmed and have your domestic operations suffer as a result of it.
3 – Where will my products be wanted?
There are two things to consider when trying to determine foreign competition – your product itself, and the competitors that are already established in the space.
Certain products just don’t have the same demand everywhere, it sounds obvious but this can really help you modify expectations of success or even change your tactics and priorities.
Then, you have to consider the market itself – who are your competitors, and how are they themselves doing?
For example, if the consumer demand was high and growing and there was only a few established outlets, then you might be able to slip in under the radar and start to develop a small market share which achieves your goals without any problems. But in a market where demand was less certain or smaller, those same amount of competitors mean saturation is higher – and you may struggle.
The name of the game in exporting is doing your homework. Careful, calculated research can lead to you discovering markets that you didn’t know were profitable, whereas not doing enough research can lead to your product flopping. Badly.
4 – Accepting payment and making yourself attractive to overseas customers
Online stores are a pretty easy way to start selling internationally. Many payment gateways accept currencies from all around the globe, and as long as you have your shipping costs under control, you can get into it without too much effort…
…or so it seems. Different countries have different expectations of online sellers. In Brazil, instalment plans are (basically) the norm for more substantial purchases. And in China, if your company isn’t registered with the government, it’s not trusted by the masses.
Going global is good, but realistically, it’s smarter to tackle one country at a time, similar to how you (probably) tackled your single domestic market before expanding.
5 – What makes other countries different?
In China, red is the colour of good luck. In South Africa, red is the colour of mourning.
In Egypt, yellow is the colour of mourning, whereas in India, yellow is the colour of a merchant or farmer.
Very rarely will you be able to take a brand and move it to another country without some sort of modifications. All companies do this. You’ll see different ads for McDonalds in Europe and America. The restaurants themselves are even different – McDonald’s has been trying to establish itself as more of a “cafe” rather than a fast food restaurant in Europe, whereas in America, you still get that classic, greasy, dirty-but-not-unsanitary feel.
6 – What’s your game plan, exactly?
Every business is going to take a different path when starting to export. There’s no “one size fits all” option.
You have to create your own personal game plan. If this is your first time delving into exportation, then you might not be able to even consider everything that needs to be included.
Don’t worry – there are organizations in almost every country that can help you out. For example, the UK Trade and Investment portal is a good resource for UK businesses.
Once you’ve talked with some people and created that game plan, the next step is hopping on a plane.
7 – Visiting the country itself
Going to the actual location where your products will be sold is important and you’d be surprised at how many people don’t do it!
You’ll be able to get a feel for the region, and more importantly, you’ll be able to meet your partners in that particular country. Face-to-face business is always better than over the phone. It instils trust, and in the world of business, trust is paramount.
Realistically, if you look up the price of a plane ticket there and it seems like too high of a cost, then you might not be ready for exporting. Keep in mind that most businesses will have to take multiple trips to each country per year.
8 – Partners, partners, partners…
Going in blind is one option. There are always stories about people who “do it all themselves” and succeed wildly.
You never hear about the failures, though. The businesses that failed because of problems that could have been avoided by knowing an inside source.
Don’t be afraid to reach out to other companies in the area you want to expand into and introduce yourself. We can’t stress this enough. Knowing people who already do business in the area will put you well ahead of the curve. The knowledge you’ll receive regarding the particular market is invaluable.
9 – Finally, do I know the fees associated with overseas trade?
Currency conversions, accepting payment, and shipping. These are just a few of the costs you’ll experience with exporting that you wouldn’t if you were doing everything domestically.
Shipping overseas is not only a nuisance, but it’s also absurdly expensive in some cases. If you choose to go by sea, you’ll be paying for the actual shipping, as well as the fees for everyone (inspectors, etc.) involved in the process. If you choose to go by air, your costs will be higher… and in case you didn’t know, there are two ways to bill for air shipping – by weight, or volumetric. The company (DHL, etc.) picks whichever one is higher. So even if your product is light or small, you might find yourself paying an inordinate amount for shipping.
You have to know your fees. And not just estimates. You need hard numbers. You need to know exactly what your margins will be – in many cases, a profitable domestic product won’t be able to work overseas.
We hope that we haven’t scared you away from exporting? By entering new markets, you can expand your business faster than you ever imagined. We’ve seen many of our clients grow wildly and that is no exaggeration!
But as we said before, with great reward comes great risk. Establish yourself domestically, plan your exportation strategy down to the letter, and you can avoid most of this unwanted risk.
And of course, when you need someone to professionally translate your marketing or technical materials to help sales, get in touch with us at Bubbles Translation Services. We help companies of all shapes and sizes expand overseas, and we can help you, too.