You’ve worked hard to establish repute in the local market and your business is earning a healthy revenue stream, but that doesn’t mean that you should neglect the overseas market. As it turns out, most small business owners aren’t ever aware that their products or services can be leaders in the global merchandise race.
The U.S. Department of Commerce reveals that among the ratio of 100% exporters in the country, big companies account for only 4% while small businesses contribute to 96% of total exports.
But according to Ego International, American companies are missing out on the unused potential profits in overseas markets, and only 1% of 30 million companies are currently exporting. Moreover, 96% of global consumers are situated outside U.S., so companies that are doing businesses within local territory are sacrificing additional revenue streams.
Just like the local market, there are some key considerations associated with the international market as well. These include:
1. The ideal market
Your business product may sell well in China, but may not achieve economies of scale in Sweden (Remember how KFC makes the most profits from the Chinese economy). You’ll have to find a market where there’s a medium to high demand for your product or service.
The internet can be used to find out export markets by analyzing consumer interests. You can also take part in local networking events and trade shows to find relevant importers. Small businesses can also take help from the Small Business Administration and the U.S. Commercial Service to find ideal marketplaces and consumers.
Contacts are the heart and soul of any export business. While it is easy to locate potential consumers over the phone within U.S., making buyer contacts overseas requires a diverse approach. However, platforms like LinkedIn are making it easy to find potential importers in the overseas market.
Business owners can create a profile on LinkedIn and search for importers, exporters and other key individuals. The platform also offers a premium membership, which can be used to reach out to relevant consumers directly. Email is also a great tool to find overseas customers. The benefit of using such tools is that they offer a frugal way to build relationships and eliminate time zone restrictions.
3. Product variations
For the overseas market, you may need to bring variations in your product or service because of cultural or religious issues. Therefore, you’ll have to perform market research to ensure that your offering abides by the local law. Modifications may also be required to fit in local consumer preferences.
Taking the same example of KFC, the fast-food company increased its profits after introducing rice into its menu for the Chinese market. The main reason for the introduction was the taste preference of local consumers, who prefer to consume rice with most meals.
4. Start low, aim big
Businesses new to exporting usually make the mistake of making an agreement without completely understanding international market regulations and payment systems. It is recommended that you start with smaller transactions before exporting a larger quantity.
Letter of credits or LC’s should be used for larger export quantities as they ensure that the payment has been made to the exporter before the goods are delivered.
It’s a huge, lucrative market out there, and it has the capability to grow your business by leaps the bounds. The above mentioned considerations will help you approach the export business with the right frame of mind.
Are you a small business owner? Have you give a thought to the overseas market? Feel free to leave comments.