Last year, 265,000 companies in the United States exported their goods or services around the world. While that number seems impressive, it represents only 1 percent of businesses in the country. Why do so few companies take advantage of the bountiful sales and higher profit margins available overseas? Many are paralyzed by fear of global trade.
It’s perfectly common to feel tentative when trying something new. Yet resources abound to help businesses of all sizes—and from any location in the United States—to sell their wares around the globe, notes Doug Barry, international trade specialist with the United States and Foreign Commercial Service, and author of A Basic Guide to Exporting.
Tapping into often-free consulting from the U.S. Commercial Service and its many partners across the country can help you get your feet wet in international business. And once you take those first steps into one country, sales often take off in other nations, too.
So what are you afraid of? Read on to find out why you should have nothing to fear.
1. Not getting paid
Most business people have heard the horror stories: A seller sends a product shipment to a customer in a foreign land, and the buyer scams them out of payment. Instead of giving up before you start, understand the many ways to protect your company against fraud. Insist on receiving cash in advance, ask for a wire transfer, or obtain a letter of credit from the buyer by working with your bank.
“Businesses are victimized when they don’t use the same due diligence they would use for a domestic transaction,” Barry notes. “Use common sense.”
2. Language barriers
For years, English has been the established and entrenched language of business around the world. Many of your trading partners know English or employ those who do, says Tom Travis, an international trade and customs lawyer who is chairman of Sandler & Travis Trade Advisory Services in Miami. If you enjoy a diverse workplace, some of your employees might speak a foreign language, and you could tap their skills. If not, there are many translators available and seeking work who can help break down language barriers.
3. Knowing where to start
The world is a big place, and it’s easy to get overwhelmed by all the options for foreign sales opportunities. Many American companies start with Canada. We speak the same language and share a very similar culture, making it a natural choice to export products or services. In fact, 58 percent of U.S. exporters send goods to Canada, Barry recaps.
But it’s just as easy to go beyond the Great White North. The U.S. Commercial Service operates 109 offices across the country staffed with experts on global trade, and for a fee they can offer market research on sales potential in specific countries. They also can narrow down the most promising markets, identify the best channels for distribution, find competitors, and conduct due-diligence consulting on potential overseas partners. “It’s one of the best resources, staffed by true professionals, and they enjoy sharing data and information with people,” reminds Travis, who is also author of The Essential Guide for Going Global.
4. Understanding rules and regulations
Yes, you must meet specific requirements to bring goods into any country, but you don’t need to master all of the fine print to start exporting. A myriad of free resources await to help you navigate exporting laws, tariffs and entry requirements across the globe. Your first stop should be the U.S. Department of Commerce and its U.S. and Foreign Commercial Service. Its telephone hotline is available Monday through Friday (800-USA-TRADE or 800-872-8723) for experts to answer your questions about standards and documentation for each country, Barry says.
The typical questions Travis and his team receive involve complying with rules and regulations, applying trade agreements to specific industries or countries, and avoiding overpaying taxes or duties. His consulting firm helps companies as small as startups and as large as multinational corporations, as well as foreign governments, answer these questions. Nationwide, there are many similar consultants available to serve as resources when the issues get complicated.
5. Looming logistics
Once you’ve got the what, where, and who of exporting figured out, it’s common to worry about how to get your goods overseas. Most major shipping companies offer freight forwarding—getting product shipments into other countries—and they do so seamlessly. They can offer advice on documentation, reserving cargo space and making arrangements with overseas custom brokers to ensure that the goods comply with any country’s regulations.
It’s also important to make clear to customers that they must pay the duties and taxes associated with their purchase. The U.S. Department of Commerce can help you provide estimates so your buyers don’t refuse shipment upon learning of the added expense, advises Barry.
“Just get out there and do it,” he adds. “No one should be afraid that they will stumble and fall. There are so many resources out there, there is low-cost financing, and international and domestic trade shows where people can hold your hand and bring buyers to you. It couldn’t be more efficient and effective for small and medium businesses to sell internationally. Now is the time.”
Suzy Frisch is a Twin Cities–based freelance writer. She’s covered business, politics, law and many other topics for a range of publications, including Twin Cities Business magazine, the Star Tribune and the Chicago Tribune.
Note: The opinions expressed in this article are those of the author and do not necessarily reflect the views of FedEx.
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