Exporting your products internationally is a great way to grow your business and reach new markets overseas. It also allows you to diversify your revenue streams to provide some buffer to domestic economic uncertainty or downturns. Furthermore, selling in different countries can allow you to ramp up your production levels to benefit from economies of scale. This all sounds very positive, but it’s a risky and technical process. Trade and customs regulations, logistics and cultural barriers can all hinder your exporting success – but what are the most common mistakes made by companies who are exporting for the first time?
Conducting inadequate market research
As with any new business venture, thorough market research is an absolute necessity. New regions and markets will have completely different trends, patterns and competitive landscapes. First of all, you’ll need to assess whether there is an adequate level of demand for your product to make the risk worthwhile. Many companies fail to carry this out properly, which can lead to failed investments. Spending some time in the country you are targeting is always a good idea to give yourself a better sense of connection. For example, if you are looking to export to Singapore, spend some time in a serviced apartment in the city-state to gain a better understanding of its values and trade barriers.
Market research should also include a thorough investigation into trade laws and regulations that may have an impact on your operations. Can your goods legally leave your home country and enter your target region? Make sure to confirm this and other issues well in advance.
Focusing on different markets at once
It can be tempting to see whole international regions as an opportunity, rather than focusing your efforts on specific countries or sub-markets. Europe is a good example of this, where companies often bite off more than they can chew when it comes to exporting abroad. Instead, you should focus on certain countries and markets to ensure that you do the job properly and don’t make mistakes when trying to focus on too much at once. Starting small will also help you iron out any logistical or operational issues before moving on to the wider region.
Assuming the product will need no change
When a product is having success in its domestic market, many business leaders will be confident in exporting to different markets without adaptations. Cultural and societal differences are usually important when it comes to consumer goods because consumer segments and motivations may be completely different. While your product may be popular with one customer segment in a domestic market, another type of consumer may be the most likely to buy it in another. Again, this all ties into market research which is the backbone of a successful exporting operation.
Working with the wrong companies