Exporting 101: Process and Fundamentals

Tekle Sebhatu Ph.D.November 4, 2011

http://www.stcinternational.usstcintL@q.com

Exporting 101:Export Process and Fundamentals Agenda

• Why exporting/Barriers• Essentials for Export Success• The Export Process• Export market research• Identifying Countries and Products• Mistakes Made by Exporters• Resources• Q & A

Exporting is not a right, it is a privilege, which can be revoked if rules and regulations are not

followed.

Why Exporting

95% of the world’s consumers are outside of the U.S.

97% of U.S. exporters are SMEs

75% of exporters have less than 20 employees

63% of SMEs sell to only to 1 Market

Exporting = Jobs

Exporting Barriers

• Fear of the Unknown• Lack of finance• Export controls/License• Insufficient foreign market research• Lack of distribution channels• Unexpected costs of exporting

ExportSuccess

Commitment(Long Term)

Relationship(Culture, Understand

Business Practice)

Knowledge(Documents, payments,

shipping, insuring, financing)

Planning

Essentials for Export Success

The Export Process

Figure 15-3

5. Exporter ships

Brazilian Bank

6.Exporter presents

Docs.

1. Negotiation

Brazilian Importer U. S Exporter

U.S. Bank

2. Importer Pays/arra

nges

4. Exporter notified

3. Sends docs

7

Importer

ClaimsGoods

Four Steps of Market Research Process

Step 1 . Identify potential market

Step 2. Assess targeted market

Step 3. Draw Conclusion

3 to 5 most promising countries

Statistics & MKT research reportTravel or use export assistance

Conduct SWOTT AnalysisExport Control/Tariff

Examine competitive products

Target 2 to 3 countriesGet help for more insights

Focus:

Focus:

Focus:

Focus :

Step 4. Test Market

Online (Trade leads)Participate trade show/mission

Focus:

Trade Stat Express (DOC-ITA)http://tse.export.gov/TSE/TSEHome.aspx

Trade Maphttp://www.trademap.org/Index.aspx

Which Countries To Enter?

Practical Market Selection

• What is the size of the market? • Can your company price profitably?• What are legal restraints?• What distribution options are available?• How can your company promote our offering?• How will the competition respond?• How easy is it to get paid?

Emerging MarketsFrom BEM’s To BRIC’s

BRIC BEM• Brazil

• Russia

• India

• China

• Argentina• Brazil • China (Economic area)• Indonesia• India• Mexico• South Africa• Turkey• South Korea• Poland (Now EU)

BRIC and BEM Countries• Large population

• Fast growing middle class

• Fastest growing/Liberalizing economies.

• Regional economic powerhouse.

• No longer producers of low-cost/tech products.

Finding Products to Export

• Local/National Trade Associations Directories• Local Export Assistance Centers (Programs)• Country Specific Publications• Travel• Trade shows• Internet

Role Of Freight Forwarders

• International documentation and packaging• Carrier and routing information• Export license assistance• Marine insurance rates and coverage• Warehouse and distribution services• Hazardous materials shipping compliance

info

Blanket Use (multi-shipment use)– Unlimited Duration (no ending date)– Limited Duration (stated ending date)

Single Shipment Use– Shipper’s Letter of Instruction/SLI– Signed statement on Invoice

Export shipment to be handled by a Freight Forwarder requires Power of Attorney

Export Power of Attorney Types

Common Mistakes Made By Exporters

• Lack of export business plan• Failure to obtain export assistance (counseling)• Lack of sufficient commitment• Insufficient care when selecting

agent/distributors• Chasing multiple orders• Failure to modify product to meet market

demand.

Thank You for participating!