1. Do
I need to export my Product?
This is a
decision that only you can make. If you have developed a
comfortable
niche market for your particular product, you are satisfied with
current
sales and you do not really have the additional production capacity
to expand your output, you may decide that this just isn’t
needed.
Also export requires time, attention and money, you need to decide
whether these are available for this effort. The United States
is the largest market in the world and many companies need not look
elsewhere. However, more and more the World is becoming
interconnected.
Telling whether a company is a U.S. company or another nationality is
often difficult since companies compete internationally and often
invest
and buy in others all over the world. Therefore in the long run,
even with the great size of the American market it is very hard to not
take notice of the large and growing markets for goods in Asia.
As trade barriers to export are removed in countries as diverse
economically as China and Vietnam and Cambodia, opportunities currently
exist for
many U.S. and other companies that have never exported before.
2. Is
my product or service needed in Asia?
The first
question to ask is whether there is a demand for your product.
Before
you make the decision to try to enter the huge Asian market you need
to make certain that there is a market for your product or
service. State and federal trade development agencies publish
trade statistics and country market reports that can help you learn
more and make informed decisions. If you live in a major city or
near a major University, the city or University library may have many
directories and other
volumes describing market trends. If there is a SCORE Office,
this office may also have resources to assist you. The Internet
and the U.S. Department of Commerce also offer many information sources
in this area. Many companies have entered exporting following
participation
in SCORE, U.S. Department of Commerce and State export education and
training courses. These courses are usually designed for new
exporters
and can help you determine whether your product or service has export
potential.
3.
Where should I start my efforts to export in Asia?
Oftentimes
this is determined for you. As you produce your product and as
knowledge of it spreads in this interconnected world, oftentimes you
will get inquiries from potential buyers around the world who will
become aware of your product. Your interest in pursuing these
requests will be determined by your company’s need for expanded sales
and ability to focus on these requests which are often fairly time
consuming because of the time and distance that may separate you from
your potential customer. Keep in mind that not all business
environments are created equal. Doing business in some countries
is much, much harder than in others because of government regulations,
immature markets, low buying power and many other factors.
Countries such as Singapore and Hong Kong offer very open and
transparent markets, China and Japan although much larger are more
complicated and may take more time to create results. Research
your opportunities both on a country and a company basis before
selecting a target market.
4.
Will my product or service need to be adapted for Asian or other
markets?
Some
adjustments in your product may be necessary to improve your chances of
success in Asia. Measurements will need to be converted from the
U.S. system of measurement to the metric system, which is used by
virtually every other country in the world! The factors that will
determine whether you need to modify your product or service for your
target markets are:
- Government
regulations in the country you intend to sell your product
- Non-government
standards
- Country
specific or region specific requirements – voltage, climate, others
- Cultural
sensitivity
- Support
and servicing requirements
Information
about these factors is critical to the success of your sales efforts
and
should be studied and collected as part of your market research efforts.
5. If
I am already marketing my product in Europe, can I expand this effort
to Asia?
Strategies
that work in Europe or Latin America probably won’t work in Japan or
China or often in other places in Asia without some adapting.
Learn
more about the country you intend to sell in and about specific
marketing strategies that have succeeded in the past by talking to
consultants or other experts in the countries in which you are
interested. Marketing strategies may include participation at
State and Federal trade missions, international trade shows,
advertising, direct mail, and on-line promotions via the
Internet. Keep in mind with respect to the Internet, that
although growth figures for the Internet in Asia are among the highest
in the world, total usage is still limited when compared to U.S. and
European levels. A well thought out export-marketing program will
utilize many or all of these techniques in a balanced manner that takes
into account the particularities of the Asian country in which you want
to sell your product.
6. Do
I need to translate my sales literature into the local language?
Will I need to learn foreign languages?
If you are
serious about succeeding in the Asian market, it is highly recommended
that you translate your marketing materials into the Asian language of
the prospective country in which you intend to market and sell your
product. English is the universal language of business but people
always feel more at ease reading and speaking their first
language. Even Asian business executives who are good English
speakers and whom have been educated in the U.S. or western
Universities often will prefer their
first language and will feel more comfortable in it. A
comfortable
buyer who is able to better understand how your product stands apart
from the competitors is what you want. Having someone within your
company who is capable of speaking in the language of the culture in
which you are doing business demonstrates commitment to the
market.
It also simplifies communications, which can occur in either English
or the host country language to ensure that there are not
misunderstandings. It’s true that much international business is
conducted in English, but to be truly successful you must respect you
partner’s country and culture – language is a key component of
this. For contract or major business negotiations, always hire a
translator/interpreter. Do not rely on the company to translate
for you. Their interests and the interests of your company
probably will not be identical.
7. How
do I learn about differing customs in Asia, which could affect my
company’s chances of succeeding in doing business?
The Chinese
have a saying “Seeing is believing”. The best way to learn about
a country is to visit, to meet the people and to have face-to-face
meetings. But first, do you homework. There is a growing
body of resources available online on each country’s history, social
and political customs, protocol, and business etiquette.
Additionally,
Federal, State and Regional export counselors and education programs
also provide excellent sources. The library and the bookstores
are also great resources. Because of the explosion of
international
travel, there are now travel guides – some of them focusing on the
business
traveler – that cover any country you might want to choose. These
are good sources of basic and sometimes even fairly advanced
information
on a country, its culture and its people. Many consulting and
specialist firms specialize in intercultural communications for
business
people, whether traveling or hosting foreign visitors. Watch the
local business calendars for training opportunities offered by these
firms in concert with federal, regional and state trade promotion
offices.
8. How
can I finance my international sales?
There is a
saying that “money makes the world go round.” This saying is
particularly true in international sales. Getting the money to
fabricate your product, ship and wait for payment are issues that any
entrepreneur must face. Most new exporters need to ask themselves
where to get help at both the pre- and post-export financing stages of
the export process. Pre-export financing is the financing
required of the
exporter while the product is being built and prior to shipment.
Post-export financing is the financing required between the time of
shipment and receipt of payment from the overseas buyer. This is a
fairly
complex issue and first time exporters often need help in this
area.
It is an area where Export Counselors, consultants and other
specialists can often help the exporter to optimize his deal.
Government sources of export financing are:
- SBA
Export Working Capital Program
- EX-IM
bank Working Capital Guarantee
- State
Export Programs
Additionally
many international banks offer financing that may prove
necessary. (Also see our upcoming report on this issue.)
9. How
can I ensure I’ll get paid for my export sales?
Before
making the sale, evaluate the risks -country, currency, and commercial
- of
doing business in a particular market. Once you and your buyer
have come to terms, there are many different methods of payment,
including
cash in advance, letter of credit, collection, and open account, that
you will need to agree upon. You should also become knowledgeable
about credit insurance. Forfeiting, available to very large firms
through special divisions of international banks, is a way for
exporters
to receive cash up front and mitigate payment risks. Contact your
State Export Promotion Office, the nearest U.S. Department of Commerce
Export Promotion Center or the international department of your bank
for help with your finance question.
10.
How long will it take to see a profit from my export sales?
Naturally,
the time frame from when you initiate you international activity to
when you make your first sale and start enjoying profits will vary
greatly from firm to firm. Factors such as your company’s prior
export
experience, the qualifications of the company that is buying your
product,
and the challenges of the market all will act to vary the time
required. In general, expect the turnaround to be at least one to
two years. In more difficult markets, this maybe overly
optimistic and should be adjusted. Keep in mind that if it was
that easy; every company would already be major exporters
11.
How should I ship my product overseas?
First, do
your homework on this issue – it can be key to success. View your
transportation company as a key partner that will make or break your
efforts to export. Further, don’t assume your buyer is as
knowledgeable
on this issue. A successful export program uses reliable,
cost-effective
methods of shipment. Transportation of your product is an
important
consideration because it is a significant cost factor. Buyers
generally compare competitive products on the basis of delivered
cost.
Your company needs to make sure your product is delivered in good
condition,
on time, and keep the cost in line with competitive products. As
your sales expand, distribution, which also includes cost for storage
and inventory, will have a key effect on your competitiveness.
The transportation choice, therefore, should blend the most
cost-effective
and reliable company that will produce all these factors.
12.
What agencies, groups, or others can provide assistance to my company
on the various facets of the selling to Asia? Is their advice
essential? How much will this expertise cost? How do I know
which firm has the right qualifications?
Generally
services provided through your State export promotion office are
free. This is often a good starting point. Most states also
offer education and training programs in connection with state
community and other colleges and Universities at a nominal fee.
Industry trade associations also sponsor a variety of programs specific
to their industries. You can often research these via the
Internet. Watch the business calendars in the local media to keep
up with export training opportunities.
The U.S.
Department of Commerce has Export Assistance Centers in most major U.S.
cities. These centers also provides counseling services to
exporters although some services such as matchmaker (assistance in
finding a foreign agent), etc. do require payment of a moderate
fee. Export management
companies (EMCs), Consulting companies of which there are many in
throughout
the United States and other specialist firms provide services for new
and experienced exporters.
When
selecting an individual or firm to assist you, evaluate the company’s
experience, especially in the particular country or area of expertise
where you
seek assistance. Evaluate the company’s professionalism,
credibility, the education of key firm members, and general
compatibility of the
firm with your firm’s goals. Seek a written proposal of what the
company can accomplish for you and at what price and according to what
time period the services will be performed. Seek and check
references,
which the firm should be happy to supply to you.
