When we talk about exports, we are considering the sale of goods and services to a country that is not yours. As of today, we have 195 countries in the world and dealing with these countries as buyers vary. It will be easier for you to trade in a country with whom your country has a trade agreement, that way certain barriers will be lifted.
These agreements foster reciprocal concession and allow for special treatment for exporters from partner countries and national allowance of non-tariff restrictions. It becomes even more difficult to export to countries where your country has little or no trade relationship.
If you are an exporter or you are looking at going into exporting your products to other countries, these are certain things that you must carefully consider.
The Product that you want to Export.
This is the most critical factor in deciding the export market. When you want to select a market, you must keep the demand for your product in that market in mind. It’s important that you come up with a product that addresses the needs and demands of your target market.
Most importantly, you have to also study the product’s historical and recent performance and trends.
The Market Performance.
A country might have a massive market for your export product, but this may not be enough. You must study the market growth in that country over the years and compare it with other countries that are exponentially growing.
If, for example, tradition dictates a market, whereas market performance is better in another market and shows more promise in the future, this will then make the latter market a better choice. Ensure you look at future markets before making a decision.
Demand certainty.
You can be sure about consistent demand for your product in a particular market when you know that the local procedures are able to meet the demand that is existent or if there is no production in the country.
Demand certainty is a precondition for the growth and sustainability of your export business, as it guarantees the continued purchase of your exports.
Presence of Trade Barriers.
This is a very important factor to consider when choosing a market to export products to. You have to consider the barriers that you will have to overcome before you enter into new markets. This could be tariffs and trade restrictions, licensing requirements, government regulations, high-quality requirements, logistical issues and other prohibitions that might come up in the future.
This is the reason for bilateral and multilateral agreements between countries in other to make trade easier for both countries through measures like mutual infrastructural developments and regulatory relaxation.
Relative Profitability.
When you take away the per unit selling price, the volume of sales and the incidental expenses will greatly determine the profitability of a product. Before you ship your product to any export market, you must consider the amount consumers are willing to pay and the demand for the product, this will give you an idea of the quantity of product you want to send to that market, at what price and what you will be expecting in terms of profit.
There are other factors to consider like distance, tariffs, logistics, travel costs and so on, that will likely affect profit.
The Political and economic environment.
You have to consciously examine the legal practices, safety, environmental regulation, commercial laws etc. of the country whose market you want to get into to ensure that you are fully compliant.
Factors like unpredictable political scenarios, confusing ideologies, and economic stress can harm your business in that country in the long run if you don’t take care of it.
The Competition.
Don’t rule this out, because you will likely meet other players selling the same thing that you are bringing on board, you have to be aware of these other brands or distributors and find a way to deal with them.
Too much competition will not be good for you. It will mean over-saturation and it can affect your market share and profitability in the long run.
Since you don’t have the first movers advantage, it’s important that you understand the market share of your competitors and know if it’s worth it in the first place.
Consider Incentives.
Most countries will allow or compel you to have incentives to welcome the inflow of specific items to meet domestic scarcity. You can experience this in countries like India which offers promotional services.
If you get this right, it could be a game changer for you and your company.
Market Prospect and Proximity.
There are advantages of exporting to a geographically closer market starting with the ease of delivering goods, but it’s also important to know that sometimes promising markets are not always very close, which means the exporter will have to plan to export those products considering the cost.
However, choosing the right kind of market for export will greatly determine the volume of shipment you can make available and the profit you will make. At kadan kadan, we make it easier for you to ship your product to the country of your choice.
Need help with your next shipment? Share your concerns with us at +234(0)9023138228, or send us a chat via WhatsApp at +234(0)9198050059. Cur amazing kadan kadan experts offer free, genuine consultation.