Many businesses, especially those using online marketplaces, may want to export their products to other countries. Exporting can introduce a wealth of new opportunities for businesses and help them grow successfully. Understandably, this comes with challenges that don’t arise within domestic markets. Businesses need to be aware of such challenges when considering exporting to other countries. By successfully addressing these obstacles, firms of all sizes will be able to effectively penetrate the global market with ease.
So before starting, it’s important to develop an export plan that weighs up the risks and benefits of the markets where you are likely to trade.
If you are considering entering a new market, then you will have to embrace a whole new culture. Business cultures are not just limited to different countries but can also vary between regions and if you wish to develop strong working relationships, then it is important that you have local knowledge.
Apart from this, language barriers often make it difficult to create respect, integrity and mutual confidence between business parties. However, a new language won’t be the only obstacle when exporting overseas. Religion, ethical standards, business etiquette and local customs can all affect how you do business and how your business/product is perceived. If you intend on doing a lot of trade in certain markets, it might be worthwhile visiting the country to experience the cultural differences first hand.
You might also want to hire an interpreter or invest in a language course in order to eliminate barriers. On the other hand, if you are comfortable speaking the native language but lack in fluent written skills, then you might want to hire a translator who can help you with business documentation and promotional material.
One of the most common concerns businesses have while considering exporting are legal and regulatory problems. When exporting, every country has different laws and it’s essential that you find out at the outset how the legal requirements may affect you when exporting to a specific country. The laws regarding intellectual property, for example, can vary hugely from region to region. Packaging and labelling requirements can also make a difference to your pricing structure. Complying with the regulatory, IP and legal issues highly depends upon the procedures in that region where you wish to export. It is highly recommended to hire a native lawyer who can represent you on these issues.
UK-based exporters should also be aware that they can benefit from leading UK trading partners under General Agreement on Trade in Services (GATS) and World Trade Organisation (WTO). Exports trading tangible products are protected by a defence mechanism under the General Agreement on Tariffs and Trade (GATT).
The third major factor to take into account is tax. Make sure you know what the tax implications are for both yourself and your overseas customers before exporting, as these could have a serious impact on your marketing plan.
Don’t neglect your tax affairs at home either. Exporting may affect your obligations. For example, if you are VAT registered, you must be able to provide records of all your transactions with other EU countries. This can mean significant paperwork with regards to invoicing, transport and payments. When selling outside of the EU, you need appropriate licenses, perform export declarations to customs via NES (National Export System) and declare all exports to HMRC. Apart from this, you might have to obtain an import licence from the country you export to, which can be quite problematic.
If you plan to move goods through the EU by road between two countries, then you will have to comply with the Transports Internationaux Routiers procedure. You also need to be aware of duty reliefs that you can claim for in the case of delay payment regarding custom duties and VAT, however, this applies only to certain exports outside the EU.
Research, Research, Research
For all of these reasons, it can’t be over-emphasised enough how important it is to do your homework before exporting.
Fortunately, there is plenty of help out there, such as the government’s UK Trade & Investment organisation.
You can track down your Local Trade Team here.
Open To Export is a useful source of information for small start-ups with practical advice, events, case studies and even potential opportunities – all of which can help businesses looking to export into new markets.
Likewise, the CBI has many useful guides and reports on their website.
You might also want to visit the ICAEW library and information service that provides a comprehensive collection of links that gives access to helpful resources and organisations.
Other great resources include British Exporters Association (BExA), Export Control Organisation, Export Refinancing Facility (ERF) and many more.
Use all the resources you can to build up a picture of your potential market and customer base. Examine legislative and regulatory regimes, build a marketing plan and consider using an overseas agent for markets that you deem could be risky. If you know someone who already exports to that market, talk to them about their experience. If you wish to effectively trade in the global markets then it is imperative that you are aware of all these formalities. You should always strive to perform ongoing research regarding exports before finalising any decisions.
While exporting clearly presents challenges for companies looking to gain market share in overseas territories, it also presents great opportunities. More and more companies are exploring this phenomenon and with access to the internet, exporters are enlightened on the many experiences that fellow businesses experience when venturing into exports. Choose the right markets and the rewards can be big. Just make sure you do your research first to avoid the pitfalls.