Open up markets, profits and revenues through export
How to sell internationally
Some of your best potential customers are likely to be somewhere else in the world. They might already have found you and be testing you out. Or you might be experiencing an unexpected surge online.
We all enjoy this first flush of new business, at least until it starts to turn sour. Payments go missing. Communications break down. Goods are held at the border. Terms are challenged.
You might be happy to settle for an occasional one-off boost. Or you might think about asking a few questions about turning this international interest into a more solid line of business that you can grow:
- Find out where these potential customers are by looking at patterns in your orders or asking trade bodies.
- Pick a market whose size you can manage. Too many orders might swamp you. Even quotes and samples can take more time than you think.
- Think about starting like some in a smaller country. Or follow others by focusing on capital cities or targeting a global niche.
- Alternatively stick online where a rising proportion of sales are international. Or sell first to a major international player in the UK, then follow your way through their supply chain.
- Purchases are typically four times more likely to happen if you operate in the local language. So always know which of your team speaks what. Or bring in a student intern to help with translations.
- Find out what international buyers actually like about you, then adapt your format and your price. Of course, be competitive, but you may well be able to charge a premium for design, knowledge, marketing and customer support.
- Decide whether to sell direct yourself and retain full control. Or work with partners. Agents will sell on your behalf. Distributors and licensees manage the risks on the ground.
- Understand each stage of your delivery and price in any extra costs. Your customer might be sufficiently interested to come to your gate. More likely, you will have to go to them.
- Know what rules to follow in crossing any borders, even on the web. We might have free trade in Europe, but everywhere else approvals, regulations and certifications apply.
- Allow for the extra time it takes for delivery and for payment. Line up any credit in advance, particularly on large orders, and be ready for the risk of dealing in a foreign currency.
- Include the risks you are running in your payment terms. Advance payment is best. Otherwise ask for credits confirmed by a bank. Only trade on open account with customers you know well.
Many smaller companies flinch at these risks, passing up the profits they can make in adding on extra sales. For those who make a plan and talk to export advisors, the effort appears to pay off. In 2013, according to a government survey, 85% said ‘exporting led to a level of growth not otherwise possible’ and 78% said ‘exporting had given them exposure to new ideas’. So it could be worth your while taking time to explore the world.
SMEforGrowth Editor 03.05.16