With domestic demand sagging, and emerging economies offering a growing consumer base, it only makes sense for small businesses to expand sales abroad – if they can overcome obstacles to expansion. Government resources, paid advisers and websites that connect suppliers with buyers worldwide help small companies get their foot in the door of the global marketplace. See the following article from The Street for more on this.
Many large corporations have survived the past few years by looking beyond the dismal U.S. economy for profits. Thinking globally paid off; throughout 2010, overseas sales boosted revenue for companies ranging from Caterpillar(CAT_) to Kraft(KFT_).
Could selling overseas be a winning move for your company?
At first glance, the challenges seem daunting, which is why so many owners simply don’t think going international is an option. If you’re unfamiliar with foreign markets, you won’t know which countries would be a good fit for your products. Even if you do have a target market in mind, language or cultural differences might hold you back — not to mention concerns about your business’ legal standing in another country. What recourse do you have if a potential partner doesn’t hold up their end of the deal?
The good news is that you don’t have to figure out everything on your own. The key is to find the right facilitator to show you the ropes.
For general advice and information, your first stop should be your local Export Assistance Center. Funded and run by the U.S. Commercial Service (an arm of the Department of Commerce), these offices specialize in advising small businesses how to export overseas. There are more than 100 assistance centers across the country; find the one closest to you by visiting buyusa.gov.
While American businesses have been using Southeast Asian companies as suppliers for years, rising standards of living means countries such as China and Korea have become increasingly open to buying American. The Commercial Service’s AsiaNow program has been specially tailored to get U.S. firms into growing Pacific markets; it even produces a “best prospects” list that highlights the best growth opportunities in each country by industry.
For China in particular, working with U.S. government backing helps smooth your way in. American businesses have access to Commercial Service offices in six major cities, as well as American Trading Centers in 14 second-tier cities. If you can’t travel there in person, the staff will set up videoconferences with potential business partners.
Having Uncle Sam as a partner can also help protect your business. Should a payment or distribution issue arise, Commercial Service staff can step in to help resolve the problem — a reassuring thought in a country where small-claims court is not an option.
Although Asia is attractive for the sheer size of its potential markets, don’t forget to look closer to home. The Central American Free Trade Agreement, passed in 2005, eliminated tariffs on U.S. products in countries such as Guatemala and Costa Rica, making Latin America a more attractive export option.
While U.S. government initiatives are helpful, they might not provide the personal, long-term attention you want. In that case, consider going the private route. The booming economies of Brazil, India and other countries have seen a corresponding rise in business advisory services, all ready to step in and guide you through the steps you need to take.
In many cases, it makes sense for you to pay a consultant with demonstrable experience in a particular country rather than do the legwork — and potential traveling — by yourself. The downside, obviously, is cost: You’ll be paying upfront for a service that may or may not pay off financially.
On a smaller scale, the rise of e-commerce has allowed small companies to engage directly with potential buyers overseas. One of the most successful such sites is Alibaba.com, a China-based company that connects millions of buyers and suppliers around the world, like an international B2B version of eBay.
Like eBay, the postings range from professionally crafted requests to suspiciously vague one-liners. Recent requests from buyers included a U.K. wellness website looking for health food supplements; an Argentine company requesting soft covers for bathtub faucets (to protect babies’ heads); and a security firm in India in search of surveillance cameras and alarms.
As in any online marketplace, it’s buyer (or seller) beware. Although Alibaba has certification procedures in place for users who request them, it’s easy to get scammed when you can’t see or even talk to the person you’re dealing with.
In many ways, selling abroad is like traveling abroad: You’ll have a better time if you do your research, learn some of the language and stay open to new experiences. And unlike a foreign vacation, a successful export business will leave you with more money than when you started.
This article has been repulbished from The Street. You can also view this article at The Street, a site covering financial news, commentary, analysis, ratings, business and investment content.