Importing and exporting, or international trade in general opens the doors to several new opportunities for a business. Especially after the expansion and widespread adoption of the Internet and e-commerce, businesses have been competing globally by importing and exporting goods. As a business owner, you’ve most likely considered importing and exporting goods. And, again as a business owner, you’re likely to have been anxious about whether exporting will be too difficult or too expensive to sell your products in a foreign country.
Well, you’re not alone. Several first-time exporters/importers and firm managers have fallen prey to myths about the entire process that have stopped them from even thinking of entering the import/export business. Let’s check out some of the crucial facts that will help a first-time exporter clear all his misconceptions.
1. Myth: My business is too small to go global
More often than not, several business owners underestimate themselves and think that only large firms can export successfully. They believe that widespread recognition, abundant resources, and formal export departments are all prerequisites for exports – and these are often the domain of larger firms.
Reality: While the truth is that large firms typically account for far more total exports, an indisputable fact is that, in most countries, the vast majority of exporting firms are small and medium-sized enterprises (SMEs).
2. Myth: The cost burns my pocket
Several business owners often shy away from exporting because they will incur extra expenses on hiring new employees, marketing abroad, and expanding production.
Reality: There are several low-cost strategies for businesses to market and promote abroad and handle new export orders and finances without hiring new staff or setting up a whole export department. A prominent way to do this is by generating trade leads at little or no cost and finding qualified overseas distributors through various Commodity Boards and Export Promotion Councils.
3. Myth: I cannot compete with the big leagues
Businesses and their owners are often held back by the thought that their products are unknown and prices are too high for foreign markets.
Reality: If the product is recognized in the domestic market, it’s a huge plus point, but even if the product is unknown in a foreign market, there are no limits. Low demand for a product doesn’t indicate that it will also not be accepted in the international market.
While price is an important factor, it is important to understand that it is not the only selling point. Several other competitive factors such as quality, service, and consumer taste are all great selling points that may even override price. Moreover, in countries with a strong currency, it is less likely for the prices of products to be relatively higher than consumer expectations.
4. Myth: Risky business
Exporting/importing is often considered to be a risky business with several complications. However, traders and business owners need to understand that selling and not getting paid has risks even in the domestic market. However, with reasonable precautions, these can be reduced.
Reality: Any risk can be identified and reduced through affordable assistance now available through the Commerce Department or your local Chamber of Commerce.
To assure you get paid, you can also use Letters of Credit (L/Cs). An L/C is a letter from a bank undertaking that a buyer’s payment to a seller will be for the correct amount and received on time. If the buyer cannot make payment on the purchase, the bank will cover the total or remaining amount of the purchase. Proper documentation can minimize the risk associated with the export business. And now that selling things internationally has become safe, routine, and efficient, trade finance and banking are also evolving.
5. Myth: It’s complicated
Exporting is often seen as complicated due to foreign laws and documentation rules, in addition to language barriers.
Reality: Although English is widely used and preferred as the primary language in the global business context, even if businesses need to get acquainted with another language, interpreters and translators are readily available in most places. You can also learn as you go because cultural knowledge is always helpful.
Besides, one does not need to be an expert to export. There is an abundance of resources available online that helps first-time exporters with the ins and outs of export operations. The government of India and its associated agencies like Commodity Boards and Export Promotion Councils also provide guidelines to the exporters.
Import Export Myths: Final words
Common “negative” myths about exporting are ubiquitous in the business world, and the battle between facts vs myths has always existed. However, businesses shouldn’t make their decision to export/import solely based on myths and should spend time and resources to research opportunities, weaknesses, and risks.