How To Expand Your Export Business to Newer Markets & Geographies
This pandemic led to a dynamic shift in the way export businesses operate. Some exporters experienced a boom cycle, especially those focused on specialty chemicals and/or the pharmaceuticals sector. Other industries faced a challenging scenario with differing demand and supply patterns from existing customers. These uncertain times propelled export businesses to venture into newer markets and geographies, making sure that the sales orders never dry up. This could be a great step forward for your trade business as well but if you don’t do it right, then you might end up taking more losses than profits and run the risk of spreading yourself too thin.
Here we are looking at a few key tips that can help you get a head start and expand your export business into more areas. It can be a bit daunting at first and you might even feel overwhelmed along the way, however, everyone goes through this phase and make it through to the other side. Let us jump right into it and explore a few ways in which you can target newer export markets and geographies, and potentially scale up your business.
"Strength and growth come only through continuous effort and struggle" - Napoleon Hill, Author
Before you dive headfirst into a new market, you must do your homework. Think of it as a battle where you must go prepared with the right weapons and the right strategy. You can’t possibly come out winning on the other side if you don’t even have a well-thought-out plan ready. However, this is an easy step that will only take a little bit of your time. You’ll have to thoroughly analyze the international market into which you’re thinking about entering. This will help with key insights into the trends and understand the demands of that market. There are several free resources all over the internet available to assist you with this and doing market analysis shouldn’t be a very difficult task. Just try to find out smaller details like the opportunistic export schemes and benefits, custom duties, taxes, logistics costs, currency conversion rates, and other relevant factors to get a deeper understanding.
If you think you can successfully operate an export business without taking external help, then you are sorely mistaken. You need to understand that exporting and even importing, isn’t a one-sided business, it’s a trade where you’ll need partners and experts to help you out along the way. Finding partners is quite important because they’ll be your primary link to the international market you’re targeting. You’ll have to find the prospective partners, meet them, talk to them, and finally enter into a commercial agreement or contract.
Another way in which you can be collaborating with people is by finding experts who can help you identify the potential markets where you should be expanding. Not only will these experts help you by suggesting the most lucrative markets, but they’ll also help you out by making sure that your export operations are well-received and successful. These experts can be anyone including the local government authorities, independent organizations, global business organizations, or freelance individuals with export market expertise.
3. Identify the Products
This is an obvious suggestion and one that many people just skip over. As an exporter who’s looking to expand to newer geographies, you might be so focused on the regulations, market research, taxes, profits, and finding partners that you can easily forget to devote adequate time to the products. You need to remember that it’s your product that’ll drive your exports. No matter how good everything else is, if your products aren’t desirable then you can forget about the profits or increasing sales orders. The same concept applies to the services as well and you need to thoroughly conduct research about the demand, pre-existing supply, and the profitability of any product or service you’re considering exporting. Some markets might require a certain amount of customization or commonly known as localization, which should be identified well before.
4. Competition Analysis
It wouldn’t be a trade if there were no competition, would it? You will always have to face competition from the other exporters and the local businesses of the target country. However, having the ability to identify these competitors and analyzing them can go a long way for your export business. A competitive analysis is a must for any new market you’re thinking about entering as you can better understand if the market is a feasible one or not. You can’t operate in every market because some markets are inherently ultra-competitive and that can lead to very low profits for you. Some geographies and markets even tend to have critical entry barriers. It’s best to avoid these markets as you just can’t change the existing landscape and besides, there are a lot more profitable markets waiting for you to venture into.
5. Testing, Testing!
The newbie exporters might find it confusing and very bizarre when anyone talks about testing a new market. However, this could save you a lot of time and money that could be invested elsewhere in case if a market isn’t suitable. You can try to use trade shows to your advantage by showcasing your products and gauging the feasibility from the response and feedback you receive. This is an age-old solid method, reliable & efficient and many exporters still use it to test the waters.
You can also test your strategies before you enter a huge market by delving into smaller markets first. Usually, these smaller markets will have a much lower barrier of entry and there are numerous reasons for doing so. If you start out with a market that’s geographically closer, has more lenient import regulations, and uses a similar language, then you can get a better feel of how the strategy will pan out in a much larger market that you’ve been wanting to expand into.
These were some of the many crucial ways in which you can expand your export business into newer markets and geographies. We are certain that it is not an easy task and indeed quite a challenging one at the start. However, with time and experience, you’ll understand what the expansion demands of you and how you can make these operations much smoother going forward. This list isn’t an exhaustive one and there are many more techniques that can be discussed in detail but covering all of them isn’t possible in a single article. However, these points are the most important ones that you should remember and if you can keep these in mind before entering a new market, you’ll be able to increase your chances of success by a huge margin.