Exporting Your Products

The potential for international sales and profits is very attractive if you are looking to expand. Before making this leap, take a hard look at what you are currently doing and validate that this is something you can undertake without hurting your ongoing business.

Your existing products may not be eligible for sale in some countries based on local laws, customs, or trade barriers. Step one should be to determine where you can export and if your products need to be modified or adapted for the markets you select.

Export Plan

Put together an export plan to make sure you have the capability and capacity to export your products. The elements of the plan should include:
  • Why your company should export
  • Identification of the best markets for which you qualify
  • Target market and product demand evaluation
  • Competitive analysis
  • Marketing plan
  • Additional resources and personnel needed
  • Product list and distribution strategy
  • Identification of best retail channels
  • Revenue and profit forecasts
  • Assess buying patterns and factors that influence foreign consumers
  • Expansion budget
  • Implementation schedule milestones
  • Legal and tax issues, including duties, quotas and regulations
  • Address currency exchange issues
  • Product pricing in foreign markets
Market Identification

It’s wise to start slowly and only pursue regional markets that are clustered geographically. For example, you might start with Canada and Mexico since they are neighbors and are already heavily engaged in commerce with the U.S. Research the markets to determine potential demand, either by doing it yourself or hiring a consultant. Test one or two markets before expanding beyond that. This keeps your initial investment to a minimum should things not work out as planned.

Focus on countries that are penetrable, growing and have established markets. Analyze what your competition is doing in the same countries and assess current and projected supply and demand conditions. The U.S. Commercial Service Market Research Library contains more than 100,000 market analysis reports that are tailored to specific countries and industries. You can also obtain a custom market research report by contacting a trade specialist at your local office of the U.S. Commercial Service.

Market Entry and Penetration

After selecting your target markets, determine if your products need to be modified to meet the unique requirements of those markets. These could include such factors as consumer preferences and local industry standards and regulations. Since the U.S. has some of the most stringent consumer protection and safety standards, these are not usually a stumbling block for overseas sales.

Generate an action plan that addresses the risks and challenges of each market, and identifies any trade barriers, regulations, quality standards and necessary licenses that must be acquired. Tariffs, port handling and import fees raise the prices on your products relative to those made in the country you are entering. Beyond that, you may have to deal with other barriers to entry such as import quotas and government subsidies for competing goods produced locally. Many countries protect domestic industries from external competition through all of these methods.

Another option is to partner with a company that is already doing business in the markets you want to enter. Having someone on the inside can help open doors and overcome obstacles. You can also apply to the U.S. Commercial Service Strategic Partnership Program. This program is designed to leverage the capabilities of trade associations and private companies and provide them with export assistance.

Don’t underestimate what it will take to promote your products in foreign markets. Initially it will take some travel to these destinations to establish networks, form alliances and pursue potential trade leads. Unless you are multilingual, your best bet may be to first concentrate on English-speaking countries where language is not a barrier.

Harmonized Code System

All imports and exports are assigned a 6-digit code that defines commodities for customs purposes based on the Harmonized System (HS). The U.S. further defines products using 10-digit codes according to its Harmonized Tariff Schedule, but the first six digits are recognized globally.

The U.S. Census Bureau administers special export codes that are called Schedule B Numbers. As an exporter, you need to know the HS and Schedule B numbers for all your products for these reasons:
  • May be required on certificates of origin and shipping documents such as the shipper’s export declaration
  • To determine import tariff rates as applicable
  • To find out if your product is subject to a preferential tariff rate under a free trade agreement with a specific country
The Census Bureau has a Schedule B Search Engine to assist you in the classification of your products.

Summary

This article only scratches the surface of what it takes to get your products into foreign markets. Before attempting this on your own, contact a U.S. trade specialist at 800-USA-TRADE. In addition to information and training, you can gain access to over 100 “Doing Business In” guides that provide country-specific tools and data to help you navigate your way through foreign markets. These include key contacts, trade statistics, consumer behavior, best sectors, local market conditions, available distribution channels and consumer purchasing power.

You should also consider talking to an attorney who specializes in international trade law. You don’t want to be doing business in a country without knowing the ins and outs of the local laws and business customs. An attorney can also assist you in protecting patents, trademarks, intellectual property, and other proprietary data. Doing business overseas can put some or all of these assets at risk.


Michael Sanibel is a freelance writer specializing in business, marketing, personal finance, law, science, aviation, sports, entertainment, travel, and political analysis. He graduated from the United States Air Force Academy and is also licensed to practice law in California and New Hampshire. Michael wrote this feature article exclusively for Debbie May.com (http://www.debbiemay.com/), an organization dedicated to helping small businesses succeed.