If you’re a new exporter interested in finding new markets, but you’re not sure what you should do to get started, you’re not alone. Exporting is a huge, daunting task, and many exporters are so overwhelmed they don’t get started—and potentially miss out on huge opportunities to grow their businesses.
We spoke with Anthony Russo, president at TradeHub International, who shared with us his advice for helping small to midsize businesses enter new marketplaces. Take a look at what he had to say.
Strategies for Exporting to New Markets
1. Do your research and build your business case.
Before you jump into trying to export goods to any particular market, spend time learning about that market. The process can be boiled down to three basic steps: identify, assess and sell. This includes identifying the market potential, learning how to properly (and legally) export your products or services to that market, identifying sales channels and verticals, and more.
Once you can prove that you have a good shot at success in certain markets, you should begin to focus on which markets specifically you will want to export to and begin to create a plan to export.
Finally, you must understand the export requirements and export regulations of any potential export market before you start exporting. By doing your research on export regulations before you ship, you’re not just saving yourself frustration—you may also be saving yourself (and your company) from fines, penalties and more.
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You are much less likely to run into trouble when you research potential buyers and new export markets. Too many companies jump into the deep end of the international pool without really understanding the export process.
2. Establish relationships with experts who can help you.
While you’re doing research, you should also be building relationships with experts in your industry and in the exporting world who can help you identify markets and then help you be successful in those chosen markets.
These experts include:
- The U.S. Commercial Service. As part of the U.S. Department of Commerce, it's their mission to help promote and facilitate U.S. exports.
- Industry dependent organizations. Talking to experts in industry associations and people on the ground in your industry is key. As you start to evaluate a market, you shouldn’t communicate only with buyers and storefronts in the industry. Take a look at who in the industry can help guide you. They can connect you with other experts and help you network with people you want to reach.
- Foreign Agricultural Services. The Foreign Agricultural Service (FAS) links U.S. agriculture to the world to enhance export opportunities and global food security. The FAS staff can help you identify problems, provide practical solutions, and work to advance opportunities for U.S. agriculture and support U.S. foreign policy around the globe.
- Chambers of commerce, American chambers and the World Trade Centers Association. Chambers of commerce are local organizations that promote, protect and represent the interests of businesses of all sizes in the community. The U.S. Chamber of Commerce “is the world’s largest business organization representing the interests of more than 3 million businesses of all sizes, sectors, and regions.” And while the U.S. Chamber is the largest, there are 13,000 chambers registered in the official World Chambers Network registry; 3,000 of these exist in the U.S. with at least one full-time staff member, but thousands exist as volunteer entities.
- Industry associations also should be contacted as well, as they are can be an extremely helpful resource.
Finally, you should always try to travel to the other countries you’re interested in exporting to yourself. That means you should actually getting into the field (not just attend a trade show) and see how your goods will be used and who will use them. By doing this, you can learn what process your customers have to go through to acquire your type of product, which is difficult information to to gather from afar.
For more advice on where you can build relationships when entering new markets, check out our article, Export Assistance: State, Federal and International Resources.
3. Evaluate and set your pricing.
Finally, before entering a new export market, you will need to evaluate your pricing.
Consider the following questions:
- Is your pricing competitive, or will you be priced out of the market?
- What will the final cost be to your customer?
- Are you looking at a partnership or other type of financial relationship? Pricing is determined by the type of relationship you form. (Wholesalers buy at a discount and sell at full price; others want a percentage; etc.) As you identify which method you need to take, you’ll be able to evaluate what your pricing structure should look like.
- How will exporting to a certain country affect your capacity? It's especially important for small and midsize businesses to review their capacity and look at how selling into foreign markets will impact it. Once you've made that determination, you should adjust your price accordingly.
- What type of financing will you use?
If you have pricing questions and concerns, your local Small Business Development Center (SBDC) can help. Depending on where you are in the process of pricing, the SBDC can help with strategy, give operational guidance, and point you toward manufacturers and partnership programs (among other things). You can find your local SBDC here.
In order to successfully enter a new export market, you must understand all aspects of your business and evaluate them together to see how they fit. By thinking through these steps before you’ve exported a single good, you’ll save yourself time and frustration—and be in the position to make decisions that will benefit and grow your company.