Trade knowledge / Strategies for Exporting to New Markets—Part 2
Date: 2017-12-02
Strategies for Exporting to New Markets—Part 2
In this article, Anthony Russo, president of TradeHub International, shares with us the next steps exporters must take to be successful in an international market.
2 More Strategies for Exporting to New Markets
In our previous article, Russo mentioned the following must-do’s before entering new export markets:
Do your research and build your business case.
Establish relationships with experts who can help you.
Evaluate and set your pricing.
Once you’ve done these three things, you must then identify your sales channels and verticals and build out logistics.
1. Identify Your Sales Channels and Verticals
Once you’ve completed the research and set a pricing structure, the next step is to ask yourself, “Where is my customer and how do I get to them?” That means identifying the sales channels and target market verticals that will reach your end customer.
You can access your target market verticals by making partnerships (for example, finding manufacturers of like items), through sales representatives, or by having someone on the ground or opening a local office. The method, or combination of methods, you choose depends on the verticals in your market and how customers buy in your market.
Some things to consider:
You shouldn’t necessarily try to duplicate the sales channels you use in the U.S. Just because it works here doesn’t mean it will be successful overseas. Investigate successful channels in the market(s) you’re interested in (not simply what has worked for you in the U.S.).
You need to know how the customer buys and how your product gets into the country. For example, not everyone who claims to be a sales representative is truly plugged into the industry you’re pursuing. Russo shared the story of a client who partnered with a sales rep for exporting in the European Union—but the sales rep kept coming up empty handed because, in that particular industry, manufacturers sell directly to customers, not through sales reps.
Ultimately, your success comes back to point of sale. Who you partner with—whether it’s a wholesaler, distributor, sales rep, etc.—will impact your price. If you’ve done a good job structuring your price, you’ll know the cost of distribution and what it will add to your expenses.
Because you’ve done your business case, you know your target market and the primary vertical(s) that exist within the market. The ones that are the most profitable, the easiest to get into, and have the lowest barriers to entry are the ones you should pursue.
Identify and Prioritize Verticals
Organic growth is important as an exporter. When you’re spending time and money in new markets, the last thing you want to do is be one and done—go into a market, make a sale once, and have no more potential to sell in that market.
Ensure you have best ROI when you go into market. Sales channels are the only way you can get into verticals.
There are several resources you can use to ascertain exactly what your verticals look like:
Industry associations.
Boots-on-the-ground interaction and traveling see the market in person.
Trade missions.
Trade shows can be critically important here; they help you gather market data and understand exactly what markets look like. At trade shows, you can walk the floors, talk to people in a similar (or the same) industry, learn about how they get to market, and find out what channels are available.
The Gold Key Program through the Department of Commerce. With the Gold Key Program, exporters can pay to engage a U.S. Commercial Service officer at a foreign embassy. The officer will find up to five qualified buyers and may arrange meetings with them. Potential buyers will be vetted by the Commercial Service before you do business with them. The Gold Key service helps exporters before, during and after their contact with potential foreign buyers.
2. Understand and Build Out Your Logistics
The final piece of your strategy for exporting to new markets is understanding the logistics of shipping. You can’t get to logistics until you’ve first identified sales channels and verticals. Here are several key things you need to understand about logistics:
Incoterms. Incoterms are hugely important because they define liability within a transaction. Though you may be familiar with them on domestic shipments, they are different when exporting internationally. Incoterms define liability and what you, as the exporter, are responsible for. You want to know where your job ends and where others’ begin. (Download the free Incoterms 2010 Chart of Responsibilities here.)
Modes of transportation. Identify the mode(s) of transportation necessary for your exports. Options include transportation by air, truck, rail, boat, dry port, and more. You could use one or multiple modes depending on where you’re exporting.
Warehousing options. You may want to store your own goods and ship from a single warehouse, or you may want decentralized warehouses scattered throughout a region. The option you choose is determined by your sales channels.
Meaning of cost. Make sure you completely understand what Incoterms terms you pick, or you may be responsible for aspects you didn’t intend to pay for. This includes transport from your facility, port costs, transport over the ocean, loading and unloading, and more.
You can read more about logistics in our article Strategies for Understanding and Controlling Export Shipping Costs.
In Conclusion
To be successful at entering a new export market, you must understand all aspects of your business and evaluate them together to see how they fit together. By thinking through the steps above before you’ve exported a single good, you’ll save yourself time and frustration—and be in the position to make smart decisions that will grow your company.
1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"TradeBearings".
3.For investors,please be cautious for all news.We don't bear any damage brought by late and inaccurate news.
4.If the news we published involves copyright of yours,just let us know.
