Steps to help increase sales and expand your customer base
With 95% of the world’s consumers located outside the United States, according to the U.S. Department of Commerce’s export.gov site, exporting is an opportunity to diversify your customer base and increase sales. Though it may seem daunting to get started, plenty of help is available, especially since increasing U.S. exports is critical to employment and economic growth.
Some ideas on how you can get started:
Assess your commitment to exporting
Growth through exporting is compelling, but it requires a sustained effort. Ensure that your company is serious by confirming that senior management supports the concept, staff is available to travel abroad and you are prepared to handle international inquiries and orders. The questions and resources at Business.USA.gov can help frame your thinking.
Determine the potential your product has to export
If you are serious about exporting, then the next question is whether your offering can be exported. For example, a product that sells well domestically might face cultural, economic, environmental or regulatory challenges in international markets. Some countries may require modifications to your product to meet safety, quality and other standards. You should also understand any inspections, certifications, technical requirements or restrictions, quotas, taxes and tariffs that apply so you can assess the full cost of exporting. Research provided by The US Census Bureau is a useful resource.
Select your export markets
Just as you would spend time researching the opportunity for a new offerings domestically, it makes sense to be strategic about the markets to which you will export. The export.gov site offers market research that may help prioritize the markets to export to. It also offers a step-by-step research approach to help you get started.
Create an exporting plan
To actually export your products or services, you’ll need to determine the logistics of shipping and distribution for physical goods and/or delivery of services. The U.S. Export Assistance Center can help; it is staffed by representatives from the Small Business Administration, Department of Commerce, Export-Import Bank and other organizations. There are many resources available online to assist in your evaluation and planning for exporting. Look to local college education programs such as The Center for International Trade Development, export trade associations, local or national chamber of commerce organizations and the many in-country services of the US Commercial Service to assist in your planning.
You’ll also need a plan to generate awareness of your offering and drive sales. Options include selling directly to customers or through an agent or distributor. Technology can help; web conferencing can offset some of the travel required to arrange for distribution, and your website should support international sales by providing product information for your overseas audience. If you sell online, ensure your site supports the local currency, provides order-tracking capabilities and enables visitors to contact you by phone or email in the buyer’s time zone.
Prepare for financial issues
There are a range of financial considerations to exporting, from pricing and currency fluctuations to financing, access to working capital, credit, payment terms and collections. Some of the more common solutions include loans for working capital, to finance production of goods for export; letters of credit, which guarantee payment from your buyer’s bank and delivery of goods you purchase; international wire transfers, to send and receive payments securely; and foreign currency bank accounts, to make and receive payments.
City National’s broad-ranging international expertise can help you get started exporting. We offer trade services specialists providing export advisory services, traditional trade services such as Letters of Credit and Documentary Collections, international wire transfers, currency management, foreign currency deposit accounts, risk management services and an international banking online service. To learn more call us at (800) 773-7100 or contact us and request that a Relationship Manager contact you.