27 Tips to Build a Successful Export Company
From medical equipment to butter, pharmaceuticals to honey, Ireland produces a wide range of products for export around the world. In fact, Ireland’s export market accounts for a significant amount added to the economy each year from trade with the US alone, not counting the UK, the EU, or other global players.
At the end of 2017, Ireland enjoyed a €44.29 billion trade surplus. As of mid-2018, the trade surplus stood at €28.31 billion, up almost 30 per cent from the first half of 2017. The top 10 export categories account for hundreds of billions of euros in sales annually. It is a truly lucrative segment of the economy for those interested in starting a business, but there are things you will need to know in order to successfully export around the world. Here are our top 27 tips to ensure you can achieve success.
- Make Sure It’s Right for You: Not all companies will benefit from exporting. Make sure that your product or service is the right fit for your target geographic area, that you have the resources necessary, and that you are committed to the process.
- Make Sure Your Product Is a Good Fit: Ireland has become a well-respected supplier of pharmaceuticals, high-quality computer components, and more. However, not all products are good fits for all global destinations. Make sure there is demand for your offering in the market you want to export to.
- Can It Be Exported： Some products cannot be exported to some areas of the world. Make sure that your product is not banned or rigidly controlled. Certain fruits and vegetables, many types of cheese, hides and materials sourced from specific countries, specific types of alcohol, particular types of pharmaceuticals, and even precious metals can all fall into the category of banned products depending on the destination country. Know where you stand before taking any other action.
- Price It Right： Can you price your product correctly for your destination market? It’s not just about turning a profit for your company. You also need to meet market price expectations. In the current global economic climate, you also need to account for increasing tariffs, particularly if you intend to export to the United States. The increased cost imposed by tariffs is passed on to your customers and may price you out of the market.
- Choose an Agent or Distributor： You can work with an agent or a distributor in your target markets, but they are not the same, and there are different legal and financial burdens that fall on you, the exporter, in each situation.
- Export Control Legislation： Does your product fall under the dual-use purview of Export Control legislation? If it can be used for both military and civilian purposes, there may be legal ramifications to exporting it abroad. Note that this applies to both physical and nonphysical products. For instance, certain types of software fall under Export Control legislation.
- Create an Export Plan： You should have a robust export plan in place covering the mid to long-range actions necessary to ensure profitable business growth in relation to exporting, and it should be built on a solid understanding of your market and accurate market research.
- Work with a Partner for Export Documentation: Any physical goods departing Ireland must be documented properly. Make sure you have a partner who is officially registered by the Department of Trade & Enterprise and Chambers Ireland to certify export documentation (certificates of origin, etc.).
- Know Your Trade Terms: Before getting involved in exporting, make sure you know the most commonly used trade terms as defined by INCOTERMS (International Commercial Terms).
- Know Your Documentation Needs: In addition to having an export documentation partner, you need to know the documentation needed for exporting your product(s).
- Build a Buffer: Exporting can be fraught with unanticipated expenses. Build a buffer that ensures you are able to make a profit, your customer pays at or near the anticipated price, and you are not unduly affected by additional export-related costs.
- Find a Trusted Freight Forwarder: The exporting process alone requires significant experience and expertise. Work with a freight forwarder to handle customs duties, and other considerations on both ends, which is particularly important if you are exporting beyond the EU.
- Know Your Product Labelling Requirements: Different nations have varying requirements when it comes to product labelling, whether we’re talking about foodstuffs, textiles, electronics or something else. Make sure you know what applies within your target nations. Many different things must be included on various labels, as well, such as origin, care for textiles, food product composition, nutritional value, quality, and more.
- Make Sure You Register: Any pharmaceuticals and their brand names should be registered within Ireland but also within your target destination. This must be done well ahead of time to allow time to create alternatives if your preferred names are already used in another country.
- Know Marking Requirements: You’ll find that different nations have varying requirements when it comes to the markings on packing cases, transit packs and retail packs. Make sure you know what applies in your situation.
- Prepared for Duties: If you will be exporting to the United States, duties may apply when your goods are imported into the nation. There may be additional fees and charges assessed, as well.
- Register Your Trademark(s): Trademarks are important intellectual property, but if you do not register them, you cannot protect them. Register your trademarks before exporting to any area.
- Patent Protect Your Product Now: Make sure that your product is protected by a patent (if applicable) before it goes to market. It is impossible to do so afterward. A patent offers the ability to safeguard your most important assets and you can start the process at www.PatentsOffice.ie.
- Plan for Arbitration Now: The Arbitration Act of 2010 means that Irish companies can benefit from robust protection in disputes through arbitration. Make sure this is reflected by an arbitration clause in your contracts and that you have a trusted arbitrator/arbitration firm on retainer. The language of your clause needs to indicate that Irish law will be enforced, but do remember that the courts have limited sway in the arbitration process.
- Know How You Will Get Your Products to Your Target Markets: Becoming an exporter is all well and good, but how will you get your products to their destination? How will you track their progress, and ensure they get from the port of entry to a distribution centre, and then to retailers or other clients? In some cases, you will need to work with multiple service providers – one for the port of entry, and a second to deliver your products to customer locations. Have a logistics plan in place long before your products go to market.
- Build a Profile: In order to identify your target audience in other geographic areas, you can and should build a profile of your customers here at home in Ireland. This should include important information such as average education level, income, age, gender, and the like. This can tie into personas used in your online marketing efforts. In fact, you can base your profiles on those personas if they are accurately constructed.
- Attend Trade Fairs: While trade fairs are excellent ways to build interest in what you have to offer, they are also good ways to make connections that can help with exportation. Attend trade fairs to aid in your market research – check out the competition, learn who is selling what where, and how they are doing it. Combine the information you gather at these events with your other research.
- Know How End Market Idiosyncrasies Affect Your Product: Market research is not just about identifying demand and price expectations. It’s about determining how a particular market’s unique aspects will affect your product, demand for the product, and more. For example, if you will be exporting to Japan, you’ll find that most things there are smaller than they are in Europe. This extends from passenger vehicles to flats and single-family homes. The idiosyncrasies of a market can affect the very size of your offering, so do your due diligence.
- Know Where You Will Go Next: Part of your planning should include a longer-term forecast that guides where you will export next year, and the year after that, and so on. You must have a clear strategy that will guide your export efforts over time, that will give direction to market research and product development and help ensure that you are prepared for the unique requirements of exporting to those markets when the time comes. Ideally, you should know what market you wish to target each year for the next three to five years. If you can develop a longer-term strategy, that will work even better. However, at a minimum, you should be planning three steps ahead.
- Know Your Unique Value Proposition: Ask yourself this – why do my customers buy from me? If you cannot answer that question with confidence, you are not ready to start exporting. Once your product hits the market, it will likely be one of many. You need to know why your customers choose your product over the competition so that you can capitalise on that in your new market. This is called your “unique value proposition”. Moreover, you need to be prepared for changes to this. What sets you apart in one market may not do so in another.
- Understand the Business Culture in Your Target Area: It is tempting to think that “business is business” wherever you might go, but that is not the case. There are marked differences between the business culture of one country and that of another. For instance, Americans tend to prefer things signed and inked formally, while other cultures are happy to rely on little more than a handshake. Knowing the business culture of the country to which you want to export will help smooth bumps in the road and prepare you for things that would otherwise come as rude surprises.
- Know the Language: There have been so many problems occur because an exporting company was unaware of the nuances of the language used in their target areas. These range from mistranslations of product names to serious faux-pas in marketing materials. If you are not fluent in the language used in your target area, then it is imperative that you work with someone who is. This can save you an immense amount of trouble, as well as costs. Not only is this vital for product packaging and labelling, but also for communicating with customers, distributors, and others with whom you will come into contact.
Keep reading for 3 bonus tips!
- Know How Your Customers Expect You to Communicate: Communication is the key to any successful business, including exporting. Know how your customers, suppliers, distributors, and other business contacts expect you to communicate. For instance, in most Western cultures, email is more than acceptable. However, in others, it is expected that you put in personal appearances from time to time. In yet others, phone calls are preferred to emails. Build a working knowledge of communication norms per region you serve so that you can create stronger relationships.
- Understand Cultural Differences: In addition to unique business cultures, each nation to which you export will also have different consumer cultures. Understand these differences and be prepare for them to differ from your own. This will help you tailor your products, product packaging, and even your marketing materials so that they reflect the cultural norms in your target geographic areas.
- Keep an Eye on the Competition: No product or service exists in a vacuum. Unless you are one of very few businesses, your product or service is not completely unique. In fact, chances are good that you have stiff competition no matter what you are exporting. Keep an eye on your competition so you know what they are doing at all times. This is particularly important if your competitors are local in the nations to which you are exporting. Watching their actions, strategies, marketing efforts, and product positioning steps can inform your own efforts, as well as help you avoid potential pitfalls should they make a misstep.
There is a great deal involved in becoming an exporter and ensuring that you are poised for success. Not sure you are capable of ensuring that your export business follows these tips and best practices? Our team of experts can help. Learn more at: www.www.emarkable.ie