Demystifying exporting – what you really need to know
A core issue at the heart of the drive to encourage companies to export is a knowledge gap – a lack of information around the practical considerations, coupled with the perception that it’s a process that’s long, complicated and potentially risky. There is undoubtedly an awareness piece to be done to demystify exporting and equip businesses with the tools and knowledge they need to assess whether they have an exportable product or service and, if so, to set the wheels in motion.
Many business owners are discouraged from properly exploring their options due to this lack of knowledge around what the key steps are and how to tackle them. But while companies are gradually beginning to appreciate the opportunities to be found in exploring new markets –illustrated in the increase in annual export value across all English regions – hundreds of businesses continue to miss opportunities for fear of failure, concerns around access to finance or worries about paperwork and regulations.
For business owners that are new to exporting it is undoubtedly a learning curve, but one made less steep with the right advisor and use of tools and resources provided by government organisations such as the Department for International Trade (DIT).
Generally, when considering exporting there are a few practicalities that should be explored as a first port (pardon the pun!) of call.
The first step is to consider objectively – and honestly – whether your product or service will be of value in an overseas market – think about USPs and what makes it different. Challenges posed by cultural differences are often mentioned among key concerns and should be heeded – exporters should consider whether their product is suitable for sale or use in a foreign market and whether it needs any tweaks to its packaging. Intellectual property must also be protected in the early stages, avoiding unnecessary, expensive disputes further down the line.
Once a potential market has been selected, it’s a good idea to undertake a market visit – trade representatives from British embassies may be able to help you to organise these visits and make them as productive as possible. The DIT Overseas Market Introduction Service can also arrange one-to-one meetings with potential suppliers, partners or customers.
Route to market is also an important consideration – will you sell your product through an agent or distributor or will all sales be done via ecommerce? Do you need to consider contractual methods such as licensing or franchising? Any exclusive arrangements should be considered carefully, perhaps with a trial period carried out in a small geographical area.
Shipping and logistics is something that should be decided carefully also – it’s important that your product arrives on time and in top condition, the last thing any new exporter needs is difficult conversations caused by delayed goods. Things to consider when deciding on methods of transport is your budget, timescales, the products themselves and whether they’re perishable, large and bulky or need an extra level of security on-route.
Rules and regulations should not be cause for concern for businesses as long as they have the right advisor with the knowledge and experience to walk them through the necessary processes – it’s vital to comply with UK laws and regulations, while export documentation must be correct in order to avoid delays and additional costs. A good advisor can also help to navigate the more obtuse export terminology, such as ‘Incoterms’ to cite just one example- an internationally accepted system of trading terms for the delivery of goods.
While the considerations at first appear extensive, with the right advisor, support and tools from DIT and other government bodies, companies can set the process in motion to make a real difference – not only to their own bottom line, but to the strength and resilience of the wider UK economy.
This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.
The information was correct at time of publishing but may now be out of date.