Your credibility and success as an exporter can depend on your efficiency in managing international sales enquiries, your effective use of intermediaries, and your proficiency in collecting payments. Before you begin to sell your products, ensure you have reliable systems in place.
1. Consider the use of intermediaries
Using an intermediary to represent your business in an international market can save you time and money and improve your chances of export success. Each type of intermediary offers different benefits.
- Agents submit orders to you in exchange for sales commissions. You remain responsible for delivery of your product.
- Distributors earn fees by buying goods from you and re-selling them, with a mark-up, to your target market.
- Trading houses are based in your own country, and market your goods or services abroad. A full-service trading house can help you with market research, transportation, trade fairs, advertising, arranging distributors or agents, and dealing with international documentation.
Learn more about your options and how best to protect your interests before you enter into a relationship with an intermediary:
2. Arrange for payments
Payments can be collected in several ways. Some are more risky than others:
- Cash in advance is the most secure option, but not the preference of most foreign buyers.
- Letter of credit / Documentary credit is a method in which the importer’s bank provides a written guarantee to pay.
- Documentary collection is a method in which a bank in the importer's country collects payment on behalf of the exporter.
- Open account is the riskiest option. You ship goods and pass title to the customer before payment is made.
Learn more about these payment options and which are likely to work best for you and your customers.
3. Assess your e-commerce potential
Consumers are growing increasingly comfortable making purchases online, and the Internet can be an efficient, cost-effective way to reach international customers without establishing a physical office.
E-commerce can allow you to test new markets without major investment, avoid third-party mark-ups or fees, and maintain direct control over your marketing. In some cases, however, e-commerce may mean higher freight costs and may not allow for effective customer service. In addition, e-commerce may not be feasible for businesses whose products do not lend themselves to online sales or whose target customers are not comfortable purchasing from a company without a local presence.
Learn more about the benefits and drawbacks of e-commerce and assess its potential for your business: