Posts Tagged ‘export customers’

Becoming a successful exporter requires more than just having a product or service you want to share with the world. It requires a lot of hard work and discipline to make the venture work. Many small businesses discover the hard way that exporting is more than just a matter of shipping things overseas. Exporting is, in a way, having a small business within a small business. In order to be successful, you need to run both businesses in tandem while still meeting the needs of your customers both at home and abroad.

New exporters make mistakes, that is true, but some mistakes are more costly than others and could seriously break the business. If you want to be successful in exporting then you need to know ahead of time what some of the most common exporting mistakes are so that you do not fall into the trap right as you get started. Here are the five most common mistakes many businesses make when they first start exporting their products and services. Pay close attention to them so that you do not fall into the same trap.

• Mistake #1: Your small business does not have an international marketing plan in place.
  If you have a marketing plan for your sales base at home, then it is important to have a marketing plan in place to sell abroad. There really is no difference in the actual selling part between the two except for the actual items or service. You need to develop a marketing plan that appeals to the customer abroad and you need to offer them the products they want, which could differ greatly from the products you are selling at home. Take the time to research what your customers overseas are looking for and develop your exporting marketing plan accordingly.

• Mistake #2: The overseas partners you are working with are inadequate.
  Once again it is important to stress that research is key to making your exporting business a success, especially when you are dealing with overseas partners. You need to make sure the companies you plan to partner with are reliable and are able to deliver your goods the way they say they will when you partner with them. If they cannot or do not deliver, you could be left with a mess on your hands.

• Mistake #3: You are not committed to the exporting cause.
  Exporting is not a way to make a quick profit. It is something that takes time. Just like building a reputation with your home clients, you need to do the same with your overseas clients. The same is true for the partnerships you develop with companies that are acting as your overseas representatives. Plan on taking your time and committing yourself and your business to exporting your goods and services. If you do, you will be successful in this aspect of your business.

• Mistake #4: You are catering to your home customers and ignoring your overseas market.
  This is the reason why you should have a good, comprehensive international marketing plan in place before you start exporting. You have to be set up to give both domestic and international customers the same attention and support. Yes, your home market is your profit base if exporting does not work out for your small business. But if you ignore your overseas market, you are going to short change yourself and people who are relying on your product.

• Mistake #5: You didn’t accommodate your oversea customers’ preferences.
  While this is less of an issue if you are exporting to a country that speaks the same language as your home market – for example, from the United States to Great Britain – you need to make sure that you cater to the preferences of your international customers. This includes modifying your product packaging to be appealing overseas, how you do business face to face to meet cultural acceptability and making sure you are selling your goods and services legally in the overseas market based on their rules. You may find it easier to change your domestic preferences as well to be successful in both markets.

Here are 5 helpful ideas on finding customers, appointing agents, and delivering your products to export markets:

Tip No 1 – Small can be good.

• It is the dream of most exporters to move into a new market and work with the biggest players in that market in a specific industry. But the big players usually have a multitude of brands, are aggressive in negotiating price and demand support incentives that eat further into your profits. Now if you can get on board with a mega company, and negotiate a profitable price structure – GREAT! But a small company can often be hungrier for brands, and can offer focus that is fantastic. I appointed a small company to distribute some electronic products in Norway. It was almost a start-up company but the owner and his team were well funded and needed a break to grow. The first six months were tough, but after that, this small company exceeded all our expectations. So, when looking for a partner in an export market – don’t dismiss the little guys.

Tip No 2 – Beware of local costs.

• Getting your goods into a market can be a minefield. Electronic approvals, Food and Drug approvals, multi lingual owners’ manuals, costs of landing and warehousing goods and bribes to get your goods to your customer can all be major headaches, if you are not aware of the problems that you may encounter. One customer in Brazil advised me that he had to pay US$4,000 per container in bribes to land the goods. If he did not pay, all goods would be put in a holding pattern, including new shipments. This can go on for months or even years. Electrical approvals vary from country to country, and now even China is insisting on electrical approvals that are costly and time consuming. Get all the local knowledge you need before you do a deal.

Tip No 3 – Go there!

• Many companies often want to use the trade shows, phone, email, fax and letters to negotiate business in distant markets, but there is no substitute for getting on a plane and going to see your prospects in world markets. The travel is expensive and time consuming, but a visit to your new customer can be invaluable in understanding their business and seeing the wider opportunities in that market. You have the most experience with your product or service. Take the time to be with your customer, shake his or her hand and build a partnership that has depth, while seeing and hearing things for yourself.

Tip No 4 – Close the deal.

• Closing the deal in export is not just about getting the opening orders. It is about setting agreed targets, taking firm forward orders, agreeing on marketing and advertising that your customer will undertake, agreeing on warranty and service responsibilities and so much more. It is vital that you have a legal agreement between yourself and your export customer so that all issues are clear from day one. If things are not up to your expectations, you have a document to refer back to so you can ensure your product or service is represented in the best possible light, KGI can help you in this area with a sample agreement. A tight agreement also gives you the opportunity to move on if you wish to appoint a different distributor. In Europe, in countries like Belgium & France as an example, it can be difficult and VERY expensive to terminate a relationship unless you have a rock solid agreement that gives you detailed exit clauses.

Tip No 5 – Export packing.

• Don’t be cheap on the way your goods are packed and shipped to the customer. If you ship in full containers, there is less chance of damage, but we have seen containers where goods have been seriously damaged because the container was packed badly. If you use smaller sea freight shipments or air freight shipments – in excess of 20 different people can handle the goods between your manufacturing plant and the end user. And these freight industry people seem to like to THROW things! Pack it well – inner and outer cartons – shrink wrap on pallets and if necessary make sure all fumigation laws have been satisfied for the country where you will ship to.