Are you ready to export? It’s not as daunting as you might think, even on a thin budget. With all the systems, resources and communication methods available today, going global is easier than ever.
A few things that can make a huge difference in an effort to develop international channels include the following:
Try to ally with in-market experts
Whenever possible, forge relationships with people who have experience, and even better, operations in the market you’re going to pursue.
Ensure that your intellectual property is protected and that you’re willing to diligently fight off any copycats
Give a strong review of your trademarks, designs, patents and copyrighted material (especially in the area of software) before going global.
Be ready to adapt your offering to the market you’re pursuing
This can include modifications to language, branding, packaging and pricing.
A valuable resource to tap is the Export-Import Bank of the United States (Ex-Im Bank), an independent U.S. government agency that helps finance the overseas sales of U.S. goods and services. In 65 years, Ex-Im Bank has supported more than $300 billion in U.S. exports.
Ex-Im Bank provides guarantees of working capital loans for U.S. exporters. It also guarantees the repayment of loans and makes loans to foreign purchasers of U.S. goods and services. You can also get credit insurance against the risk of non-payment by foreign buyers for political or commercial reasons.
Ex-Im Bank supports the sales of U.S. exports worldwide. In recent years, its focus has shifted to developing nations, whose economies are growing at twice the rate of industrial nations.
U.S. banks can help you work out the logistics of foreign exchange rates. Their foreign exchange services (“hedging” products) allow you to lock in a price for future shipped goods, based on the current value of the U.S. dollar. Using such products is prudent business practice, because they protect your profits from sudden market fluctuations.
We suggest this strategy if you’re a high-volume buyer of products and currently sell only trough retail channels. The basic principle behind this is to leverage your high-volume pricing – the advantageously low pricing your vendors give you – to add a slight markup and then resell that product to other retailers. This puts you in the wholesale game.
We’ve seen this in particular with eBay merchants called “Power Sellers” who often buy large lots of items, sell some direct to customers, but resell a portion of the goods to other retailers who have their own retail ambitions. The only way this works, of course, is if you have access to the product at preferred pricing that your wholesale customers can’t get on their own.
The other way adding wholesale as a channel can help you grow is by moving inventory that’s just sitting around. Deeply discounting products that just won’t move out the door is reasonable in order to get money out of stagnant inventory and back into new inventory that you believe will be more profitable. Wholesale - or in this case, “fire-sale” - pricing can attract other businesses to swoop in on deal-hunting missions, and take the dead weight off your books.