Exporting 101: How to Start Selling Oversees

The statistics offer a compelling case for why companies should consider exporting their goods. Ninety-seven percent of the world’s consumers live outside of the United States. Yet, only about 11% of American companies export their products. Brian Shube, founder Brian Shube Consulting, recently shared his insights into what it takes to become an exporter.

HM: How does a company know if it’s ready to consider exporting?

BS: Exporting requires a commitment from the top.  Companies need to pull together a staff dedicated to making it happen and give it the time and money to succeed. 

HM:  Should a company be a certain size before it even considers exporting?

BS: There is no magic threshold necessary to start exporting.  Many companies throughout the world are born as global businesses.  It’s more important to think about this in terms of preparation.  There are significant accommodations that are necessary when entering a foreign market.  Labeling requirements, language differences, and local business regulations must be fully understood and complied with.

HM: How much does it typically cost to break into a new market?

BS: That is not an easy question to answer.  There is no ‘typically’ here.  It’s all about market research, finding business partners, understanding competition, etc.  It is probably significantly less expensive to break into Canada than it is to break into Russia.  You have the advantage of proximity and language in your favor. In this case, a company would need to weigh the cost and benefit of reaching an additional 35 million potential Canadian customers. 

HM: Are there industries that are ripe for exporting, meaning there is an appetite for that type of product in international markets?

BS: My opinion is that people are people.  Most products have an equal chance of succeeding in Louisiana as they do in Prague.  The challenge is one of education particularly if a similar product is not on the market there.

HM: Is there a way a company can dip its toe in international waters before it jumps in? Maybe a trade fair?

BS: It depends on what you mean by ‘dip its toe’.  As I mentioned, it requires commitment to do this.  Perhaps the right answer is to start close to home.  Exporting to Canada or Mexico first will provide the opportunity to get the kinks out.   

Trade fairs are a good way to gauge the market, find business partners, etc., but a waste of time if there is no intention to enter the market.

HM: What’s the first step to becoming an exporter? 

BS: The first step to get started is to look inside your company and make sure that you are organized to export.  Is your management team committed to the process?  Is the export adventure adequately funded and staffed? 

You also need to do your homework.  Just as you would do if you were entering a new market domestically, market research is the only way to understand the opportunity and risks.  You need to discover who your potential competitors are and what substitute products are already available.  By far, the easiest way to do this is to find a partner who is already intimately familiar with the marketplace.  Someone who speaks the language and knows how to get things done is an invaluable resource. 

HM: What specific questions do companies need to answer as they consider exporting?

BS: You need to think about things like:

1.      Currency – will you be doing business in US Dollars or will you need to be taking currency risk by working in the host country’s money?

2.      Logistics – how will you get the product to its destination?  How will longer lead times effect your ability to market your products?

3.      Product support – will you be able to support your consumers in their native language?  Will your customer service department be working during the appropriate hours for your foreign customers?

4.      Intellectual property – what steps do you need to take to protect your rights?  

HM: What assistance, if any, does the U.S. government offer?

BS: Fortunately, promoting US exports is a high priority for the government.  The Department of Commerce has commercial service officers in every embassy and most consulates around the world.  Their mission is to help smooth the way for US companies to do business. They can help with everything from assessing the business climate to helping to identify potential partners, vetting them, and setting up meetings. 

Brian Shube is the founder of Brian Shube Consulting, a New York-based consultancy that helps clients mitigate risk while improving performance and cutting costs. Brian is an expert on import/export and supply chain management.  Brian’s practice focuses on helping clients to mitigate risk while improving performance and reducing costs. He can be reached at brian@brianshube.com.