How and why you should establish sound buyer seller relationships in international trade.

The international trade arena today functions largely on the transmission of complex information often realized via face-to-face communication. This can be attributed to the growth rate of world merchandising in the past decade, increase in the number of international players, nature of goods being exported/imported (read variety as well), above all the advent of technology in various aspects of foreign trade.

Now the bottom line is that the dynamics of global trade is continuously evolving. Thus giving rise to an imminent need for successful business relationships to be established for credible and sustainable trade transactions to take place.

Reasons why buyer-seller relationships must not fail

Mutual benefits aside, what can be the contribution of successful, sustained firm-to-firm relationships to international trade? Relationships between exporters and importers can have major implications on international trade flows as well. While successful relationships can lead to expansion for firms on both sides, failed relationships can disrupt production cycles. This is in addition to wasted money and resources. In fact, relationships gone sour might be so expensive for an importing firm that it might even choose to stick with an exporting partner even if the transaction is not favorable. For the obvious reasons, there is always the threat of losing the deal at the slight instance of instigation. Considering the cyclical nature of trade transactions, any disturbance can have a cascading effect on the rest of the entities in the system.

There still could be a large number of importers who buy from a specific exporter only once, yet there are many trade relationships that are long-lasting, with the same importer and exporter trading with each other for years at a stretch. It is this longevity that helps establish the much-needed brand value and credibility, particularly in the international arena.

Tips to work on the buyer-seller relationship in foreign trade-

1. Focus on being transparent with your prospective trade partner-
You can be trust-worthy only if you’re honest and transparent on your dealings. This will automatically reflect on the products you represent. Imagine that a particular deal has almost materialized for your firm when your prospective buyer learns of an almost exact copy of your product being made available for a fraction of this cost. While this could deter your ability to negotiate and push the deal towards closure- there is a learning here. Ignorance can be feigned the first time around on rips-off but going ahead an active clause stating this as well as differentiating factors of the original can be included in proposals presented.  Additionally, this also calls for extensive research to be done before launching a product into the export market initially and time to time later as well.

2. Setting realistic expectations that can be followed-through always-
Setting the right expectations whether it is a deadline or a product specification and it is uniform always. The slightest change needs to be necessarily communicated or a discrepancy reported. Let us understand this with an example- An exporter A used a plain white display box to ship his goods- as they were targeted for the international market and their requirements. A blank box allowed distributors to add their own name, logo and the language most suited for their local market.  Now, this website featured a box that came with colorful graphics and text. This evidently confused their distributors as they logically assumed that the package mentioned on the website was what will reach them. Though the situation was effectively addressed by providing additional promotional material etc.- there was a necessity that came up wherein exporter A had to review all the material used and ensure it was in line with what was indicated in the website. The proposals included the necessary literature on packaging as well.

3. Observe and adapt to your offerings to global customers-
Never make the mistake of replicating whatever works back at home onto a foreign market. Observe, pay close attention and then adapt- be it the packaging of the product or establishing a channel of communication. Everyone and every business have their motivations for staying in relationships. Listen to your global partners, learn their goals and understand what motivates them. Ensure that your offerings are aligned with their goals and style of dealing in business. For whatever it means- maybe fun videos as against cumbersome manuals, or the manner in which the product is presented as a package, etc.

4. Share knowledge that will help partnerships succeed –
The more you are able to quip your buyers and distributors with knowledge, the more conviction they will have to continue the relationship. Segregate your learnings so as to all parties in the receiving end of the transaction. Create a resource /knowledge pool for marketing the product that can be accessed by saying distributors you recruit to sell your product. The same can be practiced for information on changing laws, rules, and policies that pertain to trade as well.
5. “Trust” always holds the key for building long-term international business relationships-
Trust is a culmination of various efforts- an exhibition of earnest and credible behavior, setting the right expectations, being able to listen and adapt, and sharing relevant knowledge. Once the foundation is solid in a buyer-seller relationship, it paves way for long, lasting and fruitful relationships. It is but a fact that the costs of the acquisition of new customer are manifold while comparing it to maintain the existing ones. And with trust, you get to keep them with ease and imagine the prospect of getting references from them without efforts!

Technology helps crack buyer-seller nexus- begin using EXIMAPS.

Now how does one determine the underlying mechanisms that drive the formation and durability of these relationships? How does one learn the role of the long-term compatibility of a trading partner? Should you differentiate between short and long-term relationships, how can you derive the actual numbers? Do you find yourself shooting in the dark for data and analytics on the above front?

It is important to get the numbers first, what else is possibly as tangible as seeing a figure that can help you direct your efforts? If you are deluded about buyer behavior, preferences, and import history – how do you envisage your business plan and growth from there? With EXIMAPS, all of these changes. Each buyer’s real physical existence is verified by a core team of analysts, all of his/her transactional histories can be tracked no matter the frequency of business. Making informed, high-value business decisions as well as working on the foundation of an uncompromised buyer-seller relationship is only possible with fool-proof information of purchase history of the buyer, details of transactions, existing supplying markets, etc. EXIMAPS not only facilitates this prospect of knowing your buyer better, so as to proceed with reassurance but also offers a host of other features on trade intelligence.

Get started with a demo :   https://www.thedollarbusiness.com/#request-a-demo

Breaking into the export arena – Tips to time this well.

A very distinct aspect in the prosperity of the human race over centuries can be attributed to the concept of trade. The system of barter which gave way to the birth of a standard currency has only accelerated buying and selling various goods over the years- within communities first and then slowly across geographic boundaries.

Crossing boundaries is ingrained in an average businessman today; it is simply second nature – an organic progression into the exploration of newer markets once there is an inkling of having exhausted the immediate segment is not new. Indian exporters have nearly caught up with this trend as well. To substantiate this- trading economics states that- “Exports from India increased 11.02 percent from a year earlier to USD 32.55 billion in March 2019”. This goes to hearten the small businesses, manufacturers and domestic traders to venture into the international trade market. Let us look at how this system works first.

The trade weather and small businesses-

Today the modern system of international trade is a web of import/export businesses which handle sales, distribution, and delivery of goods from one nation to another. To start with there are multiple entities that operate in the modern trade scenario –say a manufacturer’s representative who specializes in a certain industry, an import/export merchant or agent who is more of a freelance broker. Further for business owners in pursuit of global opportunities, research into key principles, consumption trends and legislative clauses of exporting is imperative for getting a firm grasp of the current marketplace and thereby the scope for expansion.

A small word of caution- It is to be borne in mind that exporting is not a quick fix for growth or poor local sales. Exporting products abroad also presents financial, product and operational risks. Some basic simple research into standard practices of the countries being targeted for export as well as ensuring necessary precautions are in place will set the ball rolling in the right direction. Further-

Tips to succeed as a first time exporter-

1. Choose the right market for your products-
The key to choosing the right market for your product is based on acceptability and if more exports or imports occur for the same in the country. Understanding of factors such as the size of the market, presence of competition and alternatives etc., are to be carefully considered. For markets closer home the costs incurred for freight and logistics is definitely lesser. A look at the necessary numbers, trends, and analytics can add value to decision making.

2. Strike the right balance between cost and quality-
It is but indeed true that almost all manufacturers today are competing with Chinese imports, so pricing your product right remains to be an issue. Looking for means to manufacture and sell quality products overseas without steep pricing can be through joint ventures with bigger manufacturers or by choosing the outsourcing model. On the other hand, there is a lot of funding available to give assistance to initial start-up costs.

3. Utilize assistance services-
A growth and development plan, with business objectives coupled with a marketing plan, needs to be first steps before approaching an investor. Clarity with respect to the moves ahead along with the justification of funds requested for is the next. With government funding and assistance comes paperwork and bureaucracy. A look into the document shared by the ministry of commerce– will help understand the outline of schemes and benefits that favor our country to expand into foreign markets and promote export oriented activities. There are similar assistance services made available by governments all over the world to facilitate healthy exchange goods and services, shrinking boundaries to a large extent. (For instance for Peru- https://www.prochile.gob.cl/)

With all of the above in mind, the ability to demonstrate what is to be achieved, targets and long term vision must be a mandate. Documenting the same, approaching relevant organizations and learning the grind from there through workshops and training sessions helps manufacturers’ preparedness for the steps that follow.

4. Have a solid marketing plan-
The right strategy for exporting goods abroad should include adapting your local marketing strategy to make it more robust and effective internationally as well. If you’ve gone the distributor route a lot of this will rest on them, but today you can also easily get involved through social media channels.

  • Revamp the relevant packaging, product literature, advertising and point-of-sale material.
  • Translate product literature into different languages as per the targeted countries.
  • Advertise, analyze and promote to potential buyers before leaving the country and make use of local tradeshows to establish a presence.

5. Pay attention to shipping, logistics and, other paperwork
Setting up an efficient and cost-effective process for moving your goods is absolutely essential for successful international growth.

  • Deciding between air, rail, road or sea is depends on various factors such as weight of the product, the infrastructure available both between both countries that will affect the cost, distribution lead times, the value and life of the product.
  • Consider using the services of a freight forwarder with experience in transporting the chosen product to the destination country to ensure hassle-free logistics and the additional formalities.
  • Remember that there are varied monetary regulations in different countries, including tax considerations.
  • There is also a significant amount of paperwork for payment receipt from foreign countries.

The role of research – be it a potential buyer or the overall trade environment.

The constant need for updated information pertaining to all aspects of foreign trade can never diminish; awareness and the ability to tap into the available data and analytics continues to be a key player in various aspects of strategic decision making in exporting. The one form of reassurance for a domestic trader or a manufacturer will stem from his ability to understand the trade market dynamics and certain future for the product due to be launched in the near future onto the behemoth international market. Consider the following-

  • Will regular desktop research suffice to understand different countries and how the markets work? Insights can definitely be obtained by reading industry news and papers, trade data and other material online- is that all?
  • How can questions such as the ability to strengthen the market, reaching out to newer domains be answered each time?
  • How is the overall market for the chosen product at this given time? How about the demand and pricing criteria?
  • Does it need a distributor? How about venturing into complementary products.

Today there exists ease of access and ability to connect with global buyers through digital and electronic means, video-conferencing and other tools such as B2B portals are readily available to connect and communicate with prospective buyers before even setting foot on a plane. What remains to be answered is how to substantiate and make the best use of the ancillary favorable developments for those ready to export.

Enter EXIMAPS- a comprehensive trade intelligence tool.

EXIMAPS was conceptualized exactly for this prevalent need among first- time and experienced exporters – of what use is data and analytics when it is cumbersome to process and break it down to useful bits of information while it creates a drain on resources too? Aren’t these resources justified better when channelized in areas of strategy and execution? Where would you obtain exact information on your closest competition? Looking for a broad picture on foreign trade dynamics or segment/ country wise is preferable?

There are innumerable such questions that remain to be answered by conventional systems of research mechanisms.EXIMAPS is an all-round feature-rich trade intelligence application that can actively aid traders and manufacturers looking to spread their wings and explore beyond

Technology and the export business- a dream marriage!

Merchandisers and exporters operate in an extremely dynamic environment today; constant vigilance is required on competitive pricing that borders on tit for tat tariffs, an increase in number of export players etc. and certainly the economics of trade. The brighter side of such international trade developments? Entry of innovative technologies can transform trade by making processes more inclusive and efficient as well as extending knowledge. Business intelligence and trade technology will also help sustain competition by leveling out the field for all players.

The role of technology, AI overall and its impact on the EXIM business particularly-

Early and mid-eighties, is when there was a realization of the potential of other countries outside of the United States and Europe in the export segment. This combined with the steady growth of a facilitator called the internet has transformed how the world does business. Websites, blogs and presence in social media has shrunk distances and points of contact can be easily established globally. Let us look this with a small example-

Jane Brown travels to Indonesia on work, and manages to take a little break to go around the city; she discovers an exquisite piece of pottery and immediately buys it. She also nurses the idea of importing them in bulk and selling it to local stores back home in Australia. The outer box of the item has all details including the name of the manufacturer and his contact information. A few months and more parties later, Jane reflects on the popularity of that piece of art – displayed near her fire place. She gets back to the idea that had struck her when she was buying that piece of pottery. Luckily the packaging is saved and in no time she has their contact information and their website too! A few conversations later- Jane has a quote, some samples and a trial order on the way. Jane has gone global. And this is just one instance.

For that matter, today, technological disruption isn’t new for the global trade system or for that matter any industry. With Artificial Intelligence -Uber has disrupted the private transportation industry, Amazon has flipped the retail landscape and AirBnb has transformed the traveling and accommodation industry. Specifically in the trading landscape, technological developments such as Optical Character Recognition (OCR) that is used read container numbers, Radio Frequency Identification (RFID) and QR codes to identify and trace shipments, and basic digitization of trade documents have now successfully established reliability and efficiencies of this domain.

While we say that trade agreements were mostly written before digital commerce, transactions that go accompanied with large amount of paper work, to trade financing that are still by and large stuck to traditional banking methods, trade intelligence tools that aid exporters and importers still seems a far cry. Global trade system has just about begun to take complete advantage of cutting edge technologies that could make trade a lot more efficient, inclusive, and far less risky. Different technologies in the various parts of adoption process, when combined, could fundamentally change the way resources are allocated and international trade operates. Access to current trends and studies on trade can thus be accurately ascertained by governments and businesses thereby allowing them to stay ahead of the curve.

Trade technologies that are already creating a buzz-

Block chain- A development that is not only is making movement of goods more efficient and reliable, but is also actively helping the world of trade financing- such as say obtaining a Letter of Credit (LoC) has been simplified to a large extent.

Artificial Intelligence and Machine Learning technologies- can be used to optimize trade shipping routes, manage vessel and truck traffic at ports, and as well as in translation of e-commerce search queries across languages. Over and above gains in terms of efficiency and customer service, tech can also be used to monitor the overall trade business.

Trade using digital platforms- For small businesses in particular, these digital platforms have thrown open a huge arena of unprecedented opportunity to go global.AI-developed translation services are further enabling digital platforms as drivers of international trade as well.

Trade “intelligence” technology undisputedly takes the center stage-

Big data is being mined and handled by advanced algorithms that yield accurate and reliable reports and analytics across the vast spectrum of global trade. Technological intervention is only expected to grow as startups and established businesses alike gradually scout for and implement cutting edge applications to enhance their global presence. Today AI continuously, learns evolves and adapts itself from the patterns observed thereby success rates of such algorithms especially in trade technology are climbing. While most options and ideas are kept proprietary, it’s safe to say that the return on investment for traders can be beneficial here, since AI can handle and manage all kinds of data in its own way.

Why do exporters necessarily need to embrace this technological advancement? Think on the following lines-

  • Let us remember that the global market place is exponentially growing – How do you enhance your knowledge on global public goods? Given that these function as the foundation for trade and market intelligence.
  • Strengthening skills of partners in effectively using trade and market intelligence to make business decisions is key. How do you work in that direction?
  • How can you as an exporter access new and innovative approaches to intelligence especially that of competitive intelligence.
  • How about your contribution to an evidence-based policy reform that conforms to specific obstacles in trade such as tariffs etc.?
  • Is it not needed to understand and connect to international value chains as an exporter?

Investment in the right trade and BI tool is therefore inevitable for exporters today, for measured confident strides into the ever expanding world trade environment.

EXIMAPS – your trade technology partner.

In concurrence with the above detailed discussion on the role of trade intelligence and the degree to which it has the capability to permeate into all depths of foreign trade, EXIMAPS was conceptualized. The product is fuelled by a unique algorithm, that efficiently breaks down relevant data and analytics available to serve various interests of exporters and importers or those are on the lookout for such opportunities.

The product helps sellers pinpoint exact potential across feasible geographies as well as revealing the prevalent state of affairs with respect to the particular product, buyer or the market as such. The product overrides the shortcomings and misgivings of data and analytics provided by regular B2B portals as well as generic researches conducted online with limited knowledge.

More than anything, be it a merchandizer or a manufacturer strategic trade decisions made determine the fate and future of the business, and this is best accomplished with EXIMAPS as your trusted aide! Jane Brown did invest in EXIMAPS to find her footing higher up in the export business, wise wasn’t she?