Export business is quite the drag for a country’s economy but tackling it on a fair scale is not everyone’s cup of tea. If there is a list, which we can create to point out the hardship that follows in this sector, it would be long and complicated. What one must realize though is that mastering over those factors can be overwhelming in the longer run.
An exporter can experience a significant rise in sales and profit margins, which will eventually bring success for businesses in a short time span. Thus, if the product has a high demand in the international market and can generate good quantity orders in return, investing time in understanding the whole export process is worth.
What are the significant challenges in the export business?
Before exporters steps into international trading, they must make themselves aware of different factors that cause an impact overall. From norms in your country to the regulations followed in the country you aim, the exporter must be well informed. Other aspects that come in a wider picture are legal reforms, geography, product identification, and market share, etc.
Thus, let’s cover each one in detail so that the exporters are well aware of the challenges that will come their way and are ready with a solution to avoid any delays:
1. Difficulty in identifying and understanding overseas markets
Which geography will respond the best to your product is a question that can be answered only when different culture, traditions, and markets are explored. Watch out your competitors, as they might be a good place to start with. Identify their markets and do a thorough analysis. While some might risk it with their opinion, others may look up to a consultant.
2. Exploring the culture of the foreign market.
The export-import market works best when researched in-depth. There are many countries, which restrict certain products that might hurt their belief or interfere with their sentiment or cultural value. For instance, the kind of meat that gets exported in Muslim countries or women apparels. Thus, have a subtle understanding of the market before jumping onto the conclusion of exporting a product into a particular market.
3. Finding qualified and credible importers.
You don’t want to be a part of a scam or deal with one thus it is better to work with an importer that is genuine and established. The best way to go about this situation is to cross-check their background by asking around and contacting other exporters or work with importers that are recommended or referred within the export community.
4. Dealing with language barriers.
Even though your product has great potential, the language barrier can be a serious issue. When humungous investment is at stake, no business would be in a space to accept any misunderstanding. Translators could be one of the options that can bring smooth communication between both the parties. You must try to keep it brief and to the point if such a situation arises.
1. Payment delays and bad debts
You must understand that funds invested will get a return but in a longer time frame. The best way to avoid bad debts and delays is to do proper research whether it is about the currency difference or the international forms. With exchange rate fluctuations on an everyday basis, time is a crucial factor in exports. An importer with whom you work regularly will ease this pressure and avoid any unexpected outcomes.
2. Geography-specific import rules.
Foreign import rules may vary from place to place and may have additional regulations for licensing testing, and labeling. Since time frame is a big factor when it comes to export, the exporter must keep himself aware of any such rules /regulations beforehand.
3. Preferential treatment given to FTA partners by importing nations
FTA reduces or eliminates the tariffs between two or more countries. Thus importing nations prefer FTA partners. For Instance, the FTA partner for India is JICEPA, i.e. the Foreign Trade Agreement signed between India and Japan.
4. Volatility in attitudes of new governments and the impact of political factors
Trade may face a challenge whenever a new government is on the roll. Thus, tracking the status of a country’s government is essential. In the unavoidable circumstances, if an exporter is well aware, it can save a lot of time and money investment.
How to deal with these factors and turn the table towards profit?
Export can enhance the growth of any business that no other process can but then there is a regular way of dealing with it, and then there is a smarter way. Expose your business to The Dollar Business today. A platform like TDB can resolve and answer many questions through its unique range of products that are specific to an import-export sector.
TDB’s most crucial tool, EXIMPAS performs a precise competitor analysis. It works on big data to find specific markets for a product and provide period wise information. Another intriguing feature is the World Map Analysis (WMA). The analysis provides details like Opportunity index, consumption pattern, etc. which defines the potential of a product. Last but not the least, the TDB user can use ‘Ask a Question feature’. It will clear any queries regarding the entire export process to an exporter.
A Final Say
Export business shall bring a greater challenge in near future. Thus, using a platform like The Dollar Business will only make things simpler and effective.