20 ideas – how to avoid major problems with your export business

29 09 2006

Exporting is an extremely difficult process as compared to selling in the local or national market. Exporting is not easy, and it’s not inexpensive. It takes planning and requires people that are open, flexible, problem-solvers, and quick at adapting to new situations.

A smart organization that desires to export their products will invest time and money building the proper administrative and sales structure before they begin operations.

20 ideas – how to avoid major problems with your export business

1. Say no to customers. When you can’t do it, say no upfront, before you make an agreement.

2. Create an export strategy before you begin to export. Don’t get sucked into exporting by “accident”.

3. Samples should be equal in quality to the actual production that will be shipped.

4. Make everything perfectly clear with customers. Don’t assume anything, don’t work with suppositions.

5. Learn and understand the business culture of your export market and customers before you begin.

6. Provide detailed price lists and price quotations to the customer. Understand your Incoterms (if you don’t know what these are, stop know and click here)

7. Contemplate what problems might possibly arise (internal and external) that could affect shipment or delivery. Prepare alternatives or take preventive action.

8. Understand that there is a learning curve that affects the organizations ability and performance when exporting to new markets. Calculate the time this will require, and it’s cost.

9. Write down and sign all agreements with the customer (dates, specifications, changes, time, everything). Verify everything with an email or fax if unable to physically sign the agreements and changes.

10. Use caution about exclusivity agreements. Everyone wants exclusivity, will that exclusivity support your entire export production? Will it limit your ability to grow?

11. Develop a quality control system throughout the company.

12. Never send poor quality products, especially in order to meet a shipping deadline.

13. Research the transportation, temperature and climatic conditions that the product will be subject to prior to arrival at the export destination.

14. Create an export price strategy. Know where you are going, and how you want to get there, your costs and required profit margins before you begin to quote prices.

15. Clearly define the costs of production and separate them from the costs of the sales required for exports. Give the sales department a base price to build upon, and make sure they clearly identify the costs related to sales and promotion in the export markets.

16. Always have at least 2 customers in the export market. This will provide protection and stability for your production and for the customers in the export market.

17. Customers who provide the research, development and design for the product may bring samples to you. Assist in the development and manufacture of the samples. Your production know-how (turning ideas into product) is fundamental and important for all involved.

18. Research and investigate fashion, trends and tendencies. In order to survive, you have to create, not pirate and copy.

19. Quality complaints and suggestions must be addressed and implemented immediately. This has to be part of the understanding of every worker, from production to sales to executive suite.

20. Discipline, planning and order. Production planning, raw material purchasing decisions, financing, infrastructure investment, human resources, sales and marketing all must be planned and coordinated, at all times.

Added Oct. 1, 2006 – Bonus legal reminder:  Know the law of the country to which you are exporting concerning:  retention of documents for litigation, product quality and manufacturing and product safety before you begin sales and shipping.  Understand your responsibility and liability for recalls, retrofitting, refunds or destruction of the product.  Learn about your legal responsibility and relationship with brokers, agents and distributors and your products.

Related Links

7 tips for doing business internationally

Maquila and Maquiladoras in Mexico

Why you should pay attention to free trade treaties

Mexico and international free trade treaties


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One response

19 01 2010
Incoterms 2000

Hi all, very interesting article. For those who are suspictious,like me, about making mistakes when using incoterms I’ve found this site, that gets to the point (even though it is is spanish: http://www.remigipalmes.com/incoterms-2000).

All the best,
Esteve.

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