Here is a Bloomberg/Businessweek Q&A:
Forget "export-ready" and think "sales-ready." Forget consultants and services since the people necessary to the transaction are sufficient to the transaction. First and foremost you'll have no better advice than that you will get from your customer overseas as to what laws with which one must comply. Second your freight forwarder will execute the documents necessary, and if not tell you what you need before you even make a sale. You can know all you need to know in advance, at no cost to you, with the MOQ FOB offer strategy.
The answer in the article ignores the problem implicit in the question: the export wannabee assumes his first sale will be some FCL. He's probably under the mistaken impression that an LC is security. He imagines his first order will be a FCL with LC payment. He wonders at his value, the reason he would be paid, and he hopes it has to do with gathering esoteric knowledge as to the export process. Knowledge is power is money. The Bloom/BizWeek answer complements his ignorance.
What no one in the Q&A seems to realize is that any serious B2B buyer is looking for test orders. Buyers want small shipments to test the market primarily, and the systems secondarily. And test orders are in part a test of the system in place that no one can absolutely know in advance. Any "expert" cannot possibly keep up with the rapid changes in rules and regs worldwide. It ain't for nothing we refer to "trade lanes." Goods are sent over in a test amount, and see what happens. if it is promising, the frequency picks up. If that is promising, volume picks up. In time what was just crossing a lawn begins to look like a path, then a road. By that time it is settled, and a pretty safe trade lane. The idea that one can just start shipping 40' of whatever into a country is delusional. The idea such introductions will have no opposition is ludicrous. The belief that if you know the rules, you can comply and depend on fair treatment is naive. And to think you can comply, is contrary to reality. Every int'l trade shipment has a problem. Usually these problems can be overcome. Sometimes not. Better to lose a $2500 shipment than a $25,000 shipment. And in every instance the risk ought to be on the buyer, not the seller.
Critical to export success is the freight forwarder who tells you what is necessary in terms of documents to get the goods out of the USA, The buyer worries about what is necessary in terms of the documents needed to get products into his country, wherever in the world that might be.
With a MOQ FOB offer, prepaid, you are export ready because you are sales ready. (Exporting is not a business, selling things is a business.) The buyer prepays, you turn the shipment over to a freight forwarder with the documents required. The freight forwarders talk to the overseas importer's customsbroker, and they deal with all of those problems you are supposed to anticipate by speaking to a outside consultant. Your freight forwarder, who will speak to the customsbroker, is necessary and sufficient to the task.
If you depend on outside consultants, if they are wrong, which is very likely, then you are wrong, and then you have the moral obligation for getting it right. No good deed goes unpunished. Any buyer worth his salt will try to get you to take on as much work as he can do so. Your job is to say no. The more work you are doing for the same money, the less you are being paid. Look at the work requested, price it out, and decide if you want to do it, at that price.
Two reasons the MOQ FOB is so detailed:
1. So the buyer sees you are professional, you are "export ready" (well, sales ready.)
2. Those add-on costs are usually not dutiable, so the buyer can declare the dutiable (ExW) price alone.
3. Certain buyers will see other options, and request those.
4. The buyer sees all risk is on his part.
And keep in mind, nine out of ten of these export orders will never generate a re-order. They are tests. If you study the regs in every market for every product, your business will die for fruitless work. Search and learn and work with the customers, that 1 in 1000 that has actually found a market for your goods somewhere overseas. Then some research would be fruitful.
Feel free to forward this by email to three of your friends.
Question: How can I find out about the laws of countries I want to do business in, like South Korea? —W.D., New York, N.Y.Let me address two problems here, and a solution. There is the general problem inasmuch as such advice scares people away from doing business. These elements, "ready to export" "hire a consultant" "seek free services.." all add complexity where none exists. The answers ignore the reality of export trade. Answers that scare people away from business are not helpful.
Answer: Once you are ready to export, you may want to hire a consultant who is an expert in the country you are targeting—perhaps an immigrant who has active business ties overseas and knows the country, language, and culture first-hand. But before you go to that expense, start by investigating the free and low-cost services offered to small business owners by the states and the federal government.
Forget "export-ready" and think "sales-ready." Forget consultants and services since the people necessary to the transaction are sufficient to the transaction. First and foremost you'll have no better advice than that you will get from your customer overseas as to what laws with which one must comply. Second your freight forwarder will execute the documents necessary, and if not tell you what you need before you even make a sale. You can know all you need to know in advance, at no cost to you, with the MOQ FOB offer strategy.
The answer in the article ignores the problem implicit in the question: the export wannabee assumes his first sale will be some FCL. He's probably under the mistaken impression that an LC is security. He imagines his first order will be a FCL with LC payment. He wonders at his value, the reason he would be paid, and he hopes it has to do with gathering esoteric knowledge as to the export process. Knowledge is power is money. The Bloom/BizWeek answer complements his ignorance.
What no one in the Q&A seems to realize is that any serious B2B buyer is looking for test orders. Buyers want small shipments to test the market primarily, and the systems secondarily. And test orders are in part a test of the system in place that no one can absolutely know in advance. Any "expert" cannot possibly keep up with the rapid changes in rules and regs worldwide. It ain't for nothing we refer to "trade lanes." Goods are sent over in a test amount, and see what happens. if it is promising, the frequency picks up. If that is promising, volume picks up. In time what was just crossing a lawn begins to look like a path, then a road. By that time it is settled, and a pretty safe trade lane. The idea that one can just start shipping 40' of whatever into a country is delusional. The idea such introductions will have no opposition is ludicrous. The belief that if you know the rules, you can comply and depend on fair treatment is naive. And to think you can comply, is contrary to reality. Every int'l trade shipment has a problem. Usually these problems can be overcome. Sometimes not. Better to lose a $2500 shipment than a $25,000 shipment. And in every instance the risk ought to be on the buyer, not the seller.
Critical to export success is the freight forwarder who tells you what is necessary in terms of documents to get the goods out of the USA, The buyer worries about what is necessary in terms of the documents needed to get products into his country, wherever in the world that might be.
With a MOQ FOB offer, prepaid, you are export ready because you are sales ready. (Exporting is not a business, selling things is a business.) The buyer prepays, you turn the shipment over to a freight forwarder with the documents required. The freight forwarders talk to the overseas importer's customsbroker, and they deal with all of those problems you are supposed to anticipate by speaking to a outside consultant. Your freight forwarder, who will speak to the customsbroker, is necessary and sufficient to the task.
If you depend on outside consultants, if they are wrong, which is very likely, then you are wrong, and then you have the moral obligation for getting it right. No good deed goes unpunished. Any buyer worth his salt will try to get you to take on as much work as he can do so. Your job is to say no. The more work you are doing for the same money, the less you are being paid. Look at the work requested, price it out, and decide if you want to do it, at that price.
Two reasons the MOQ FOB is so detailed:
1. So the buyer sees you are professional, you are "export ready" (well, sales ready.)
2. Those add-on costs are usually not dutiable, so the buyer can declare the dutiable (ExW) price alone.
3. Certain buyers will see other options, and request those.
4. The buyer sees all risk is on his part.
And keep in mind, nine out of ten of these export orders will never generate a re-order. They are tests. If you study the regs in every market for every product, your business will die for fruitless work. Search and learn and work with the customers, that 1 in 1000 that has actually found a market for your goods somewhere overseas. Then some research would be fruitful.
Feel free to forward this by email to three of your friends.
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