How to Go Global with Import and Export
How to Go Global with Import and Export
How to go global: Import and Export
Going global can help you grow your business, diversify your customer base, and help protect your business from economic ups and downs in the United States.
honored Global Entrepreneurship Week, we’re focusing on the unique challenges business owners face when growing outside of the US
Here’s a guide you can use to start exporting your products, importing products for distribution, and finding overseas suppliers and partners.
How to start exporting
Do you manufacture or sell a product that you think will be a bestseller abroad?
To find potential markets, start by looking at countries with similar demographics to your US customer base. Then do some research:
- Is that market growing or shrinking?
- What kind of demand exists for your product in the country?
- How much competition is there for your product?
- What is involved in shipping the product to that country? How far is it and what is the infrastructure like? What tariffs, shipping laws and other import and export regulations will affect your profit margins?
- How is this country similar to the United States in terms of attitudes, culture, business standards, and language?
- What types of legal protections exist for offshore companies?
- Do you have existing contacts or previous experience that would make it easier for you to start exporting to that country? If not, can you find a domestic foreign partner to help?
Once you’ve identified the country you want to export to, search for potential customers in your chosen country.
Trade shows, networks, industry contacts, and online directories are all potential sources of customers. (See the resources at the bottom of this post for more help finding clients abroad.)
Planning for logistics. How will you receive your product abroad? International shipping is a complex business, involving customs, taxes, and clearance procedures. Using a freight forwarding company can save you time and minimize errors. Freight forwarders manage all your transportation needs, such as obtaining insurance, permits and permits, dealing with customs and more.
Figure out how you will handle payments. Of course, you want to be paid as soon as your customer receives your shipment (or even before that), but they may not be as pleasant. Talk to your accountant and business bank for advice on how to securely process international payments and what types of payment terms to offer.
Financial plan. Before you start exporting, prepare financial and sales projections and use them to assess your capital needs. Have enough funding to meet those needs — plus a mattress — before you start. If you receive a large order but don’t have the working capital to finance the purchase or production of a product, your global expansion may end before it even begins.
Tap the experts in your network for help. Talk to your financial advisor about possible funding methods and consider looking for alternative sources of funding. Fundbox offers a variety of financing options suitable for exporters, including business credit line, order sponsorship and Fundbox Pay to speed up payments.
How to start typing
Importing gives US distributors access to unique products that do not exist in the US, as well as low-priced products for resale, such as cell phone accessories.
Get acquainted with the market. To find potential products you can import, attend trade shows with international exhibitors, or visit websites that match overseas suppliers with importers. Alibaba, Global source, and Thomas Sign up are three famous markets for international sourcing.
Deep research. Once you’ve found a few potential suppliers, take your time and do some research before choosing the one that’s right for you. Start by researching the country of the supplier. You may want to avoid countries with volatile political climates, which can make it difficult to get products out of the country, or volatile currencies, which can affect your costs.
Factor in all fees. Before choosing, you should also find out what trade restrictions, taxes, permit or permit requirements, customs fees and insurance will be associated with importing from that country. Then factor those costs into your pricing and profits to avoid surprises later.
Next, do your due diligence against the supplier itself. Can they keep up with the demand? Are they reliable? Talk to their past clients (not just the references they give you). Visit industry discussion groups online, search for reviews or comments online, and reach out to your social networks to get to know the company better. Finally, ask to see sample products to be able to evaluate product quality firsthand before ordering.
Finally, deal with the paperwork. A customs broker can help you manage the logistics of receiving shipments, handling paperwork and checking shipments at the port or airport. (You don’t want to wait until a shipment arrives at your business to discover that the product is damaged or that the supplier sent the wrong item.)
If you are based in the United States, your contract must clearly state that you will pay in US currency. This protects you from currency fluctuations in another country. Talk to your business bank to see what types of offshore payment instruments they offer. Your financial advisor, accountant or banker should be able to guide you on the best way to handle international payments with minimal risk.
Overseas suppliers want to get paid as quickly as possible, but as a distributor you will have to wait 30 days, 90 days or more for your customers to pay you. To make sure you have enough working capital during this lag, prepare in advance by investigating potential sources of financing. For example, with Fundbox Pay Your supplier gets paid instantly while you still have 30, 60 days or more to pay. Other options include a business credit line or order sponsorship from Fundbox.
Add help is out there
Both exporting and importing can involve a lot of paperwork, preparation and bureaucracy, so you should seek advice from professionals.
We recommend that you start by finding an attorney and accountant who is familiar with global trade and your industry.
Next visit Export.gov, a comprehensive website that covers everything you need to know about exporting abroad. From there, you can access market research and reports, participate in webinars, participate in events, learn about trade missions and more.
To get you started, here are some other resources for small and growing exporters and importers.
- Import-Export Bank (EXIM)
- Coming to the Global Export Accelerator
- US Export Support Center (USEAC)
- State Trade Expansion Program
- International Trade Office
- SBA international commercial loans
- Office of the United States Trade Representative Trading Toolbox
- National Association of Forwarders and Customs Brokers of the United States of America
- North American Importers Association
- Small Business Development Centers (SBDCs)
Disclaimer: The information in this blog does not replace the advice of a tax or legal professional. Fundbox and its affiliates do not provide tax, legal or accounting advice. This document has been prepared for informational purposes only, is not intended to provide, and should not be relied upon as tax, legal or accounting advice. You should consult with tax, legal and accounting advisors before engaging in any transaction. If you have any questions about your small business tax situation, talk to an expert.
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