It’s not enough to have the desire to sell products outside of your country. You should also be well prepared in venturing into this new business. Written below is a guide to help your business be ready for international trading.
Many people just don’t like the idea of writing a 25-page business plan, but when you intend to penetrate a totally new market, a well researched business plan will guide you and save you from tons of headaches. If the business plan is conducted correctly, you’ll know if there’s a good market for your products, the best way to enter the market, the amount of money it will cost you, and how much your profit you’d probably get. Study is there’s a demand for your products in the foreign market you are considering. Study if the product you want to sell needs to adapt. It could help if you speak to local people, hold consumer focus groups, and study your competition. Also, it’s also very important to get the price range correct.
2.Border Crossing Costs:
Know how much it will cost to your product across another country. Aside from the regular costs for doing business, you must know other costs for international trade. These include export insurance, commissions or fees for agents, freight forwarding costs, and customs brokerage fees. Some indirect costs include: travel costs, currency conversion costs, and translation of labels costs.
3. Getting Paid:
Letter of Credit (LC) is the most common mode of payment in the exporting industry. With this type of business letter, the risk of not getting paid is reduced, as banks assure that products are delivered before money is exchanged. Talk to your bank about letters of credit.
It is very important to have a good understanding on all required paperwork for export, particularly the documents required in the foreign country you are exporting to. Oftentimes, the requirements are beyond ordinary, and knowing all these ahead of time will ensure that you are prepared and protected.
5. Good Shippers:
Since transportation is a vital component of global trading, you should only work with reliable freight forwarders who can help you meet all of your clients’ demands.
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