Here is an article by an exporting consultant citing a Commerce Department study:
As those who have taken my seminars know, every one of those objections can be overcome by these elements:
1. There are foreign markets more dynamic than USA markets as far as growth goes. You can know this by simple research.
2. Export orders are profitable, if you
a. charge the same as a domestic order
b. add the extra costs to arrive at a FOB price on an export offer.
3. Something like 92% of USA exporters are small businesses.
4. All the information you need to know about a foreign market can be had in a ten minute trade data review at USITC.gov. you learn which countries are the best prospects for your product and the price being paid by foreign customers.
5. If you follow the small MOQ order tactic to "search and learn" about the markets, you take no risks of a non-monetary type (legal jeopardy for noncompliance, etc).
6. If you follow the small MOQ order tactic to "search and learn" then your strict FOB/prepay price quote eliminates any need for finance, for you get prepaid. Now there are misconceptions that a letter of credit assures payment (not true in theory, law or practice) and that wire transfer can be pulled out after it appears to have been credited to (debited to? I never get the terms right) your account.
In a series of seminars which bankers were present, I was reminded that one should have a receiving account number and the banks can sweep that and move the money to another account so there is no way money showing up in the receiving account can be got at after it is swept. (Talk to your banker about it.)
As to other reasons, since they are not stated, I would welcome hearing what those are.
The article goes on to note that there are plenty of companies who are small and exporting, regrets they do not do more than minimal market study, yet recommends they do more. I say stick with success, do what is only necessary and sufficient to get export business, but in all cases make that first order profitable, or not at all.
***John Spiers will be offering an all-day seminar on small business international trade start up at Orange Coast College, Los Angeles Area, June 29, 2013. Full info here...***
Feel free to forward this by email to three of your friends.
A Commerce Department report says that the primary reasons more firms don’t export are:
• We have better market prospects here in the U.S. (36 percent)
• Exporting would not be profitable for us (21 percent)
• We are just too small for exporting -- it is for large firms (15 percent)
• We don’t have enough information about foreign markets (8 percent)
• Exporting is too risky for small firms like ours (6 percent)
• We cannot finance export sales (4 percent)
• Other reasons (10 percent)
• Exporting would not be profitable for us (21 percent)
• We are just too small for exporting -- it is for large firms (15 percent)
• We don’t have enough information about foreign markets (8 percent)
• Exporting is too risky for small firms like ours (6 percent)
• We cannot finance export sales (4 percent)
• Other reasons (10 percent)
As those who have taken my seminars know, every one of those objections can be overcome by these elements:
1. There are foreign markets more dynamic than USA markets as far as growth goes. You can know this by simple research.
2. Export orders are profitable, if you
a. charge the same as a domestic order
b. add the extra costs to arrive at a FOB price on an export offer.
3. Something like 92% of USA exporters are small businesses.
4. All the information you need to know about a foreign market can be had in a ten minute trade data review at USITC.gov. you learn which countries are the best prospects for your product and the price being paid by foreign customers.
5. If you follow the small MOQ order tactic to "search and learn" about the markets, you take no risks of a non-monetary type (legal jeopardy for noncompliance, etc).
6. If you follow the small MOQ order tactic to "search and learn" then your strict FOB/prepay price quote eliminates any need for finance, for you get prepaid. Now there are misconceptions that a letter of credit assures payment (not true in theory, law or practice) and that wire transfer can be pulled out after it appears to have been credited to (debited to? I never get the terms right) your account.
In a series of seminars which bankers were present, I was reminded that one should have a receiving account number and the banks can sweep that and move the money to another account so there is no way money showing up in the receiving account can be got at after it is swept. (Talk to your banker about it.)
As to other reasons, since they are not stated, I would welcome hearing what those are.
The article goes on to note that there are plenty of companies who are small and exporting, regrets they do not do more than minimal market study, yet recommends they do more. I say stick with success, do what is only necessary and sufficient to get export business, but in all cases make that first order profitable, or not at all.
***John Spiers will be offering an all-day seminar on small business international trade start up at Orange Coast College, Los Angeles Area, June 29, 2013. Full info here...***
Feel free to forward this by email to three of your friends.
3 comments:
What does FOB and MOQ stand for?
Where can you find leads to start exporting?
Leads exporting, that is easy. But what are you selling?
FOB = Free On Board (the vessel), free as in free of any sheriff's liens, B/L notations of wet or short boxes, free of any problems.
MOQ = Minimum order quantity. The idea is go after the absolute minimum you can sell, never the absolute maximum you can sell.
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