How to Start an Export Business
Export Business is a very promising business in India. This is because a large number of products manufactured in India are in huge demand abroad. However, most manufacturers are not aware of this. You can step in to help manufacturers get overseas market accessibility and at the same time get yourself established.
Types of Import/Export Businesses
If you have to start an export business, you can have two options available before you. One is to start an export management company and the other is to start an export trading company. If you start an export management company your duty will be to sell the products of a domestic company overseas. You have to take care of hiring distributors, dealers, and representatives; advertising, marking and packaging; shipping; and at times financing. If you start an export trading company (ETC) your job will entail foreign buyers looking for something and then finding domestic sources willing to export.
How to Start Your Export Business?
In order to start your export business you need to carry out market research. This is a very important aspect of export business. Your market research tasks should include the following:
- The product or service you plan to sell
- Your aimed end-user or whether your niche group is mass-market consumer, light industry, heavy industry, government, medical or hospital use, business or professional
- The countries you plan to export
- The trade channel you plan to use i.e. through direct sales, distributors, representative, or commission representative.
How to Set up an Export Office?
Your export office location should be in a place where business houses can have easy access. It can be at an industrial zone or in a busy market. When you start new you need to have the following in your office:
- Computer system with modem and printer
- Fax machine
- Internet/e-mail service
- Export software
- Voice mail or answering machine
- Stationery and office supplies
- Access to market research or trade leads
How to Promote Exports on Your Own Initiative?
A large section of good domestic products never get exported because manufacturers do not think along these lines.
- Identify hot sellers in the domestic market? Zero in on products you know well or have huge demand in the market.
- Find out if the products are hot sellers in your target countries
- If not, do the products have the potential to become hot sellers?
- Locate the manufacturers
- Identify the competing brands
- Calculate the selling price the products domestically and in your target countries
How to Approach Manufacturers?
After you identify a product you need to get in touch with the manufacturer. Write a letter addressing the following points.
- Introduce yourself and your company
- Highlight the potential of the overseas market of his product
- Explain in details how your company, out of all others, is best placed to market it overseas.
- If you already have contacts with foreign distributors, show manufacturers the clear cut way
How to Write Export Business Plan?
An export business plan in other words is your marketing plan which you plan to sell to manufacturers. The following elements must be included in your plan:
Which country will you or your representatives sell? Explain the viability of the market by providing research information in a clear and easy-to-digest format. Represent it with graphs, charts, and facts, figures and text.
Give your annual sales forecast. Show how much the manufacturer can expect.
Open Export Business – The Export Path
Once you find an importer for your goods you need to go about in the following way:
- Give the importer a quote on your merchandise; if necessary you must negotiate
- Procure the letter of credit from your bank.
- Meet the terms of the letter of credit. This usually includes merchandise manufactured if necessary; taking care of shipping and insurance arrangements; complete packing and transportation.
- Receive shipping documents
- Present shipping documents to your bank