You might not know it, but with $2.5 trillion in exports per year, the United States is the third-largest exporter of goods and services in the world. With so many nations working to build their economies, there’s never been a better time for small businesses to claim their own piece of that pie.
Doing so on your own, however, can be a risky endeavor. No market is easy to decipher, and foreign markets are often a much bigger challenge to unlock than domestic markets. Here are a few potential pitfalls that you’ll need to be aware of when you export your product!
1. Currency Differences
More than 25 countries use the U.S. dollar as their official currency. However, for the remaining 150+ nations, unless you’re dealing in a digital currency like Bitcoin, you’re subject to the whims of the market. A slight change in currency can lead to a major disparity in the final bill!
2. Language Barriers
Many businesspeople do speak English, but not all of them. Communicating in your second -- or their second -- language can open itself up to misunderstandings unless you’re both fluent in the same language.
3. Time and Cost
Unless you’re dealing with Canadian or Mexican firms, your products are going to have to cross a large body of water, which can either take a long time or a lot of money. Can your business handle waiting to get paid by the buyer until their shipment arrives?
4. Fraudulent Buyers
This can happen when dealing with new accounts. Some buyers simply won’t pay, even when they get their shipment from you. A good procurement team is essential to weed out these fakes and verify legitimate businesses.
5. Complicated or Unfamiliar Laws
You might need to comply with certain regulations in order to sell your products to businesses in another nation. It’s the responsibility of the seller to know the law and follow it.
Tariffs are paid by the importer, but that doesn’t mean they can’t cause you headaches. If your product gets slapped with a tariff, you might have to offer a discount in order to keep your buyer from going to another country to do business.
7. Cultural Differences
Some are obvious, like complying with religious restrictions in Muslim-majority nations. But did you know that many European nations work four days a week and often take weeks or even months off from business? It’s important to know your buyer’s schedule so you can meet the demands that their culture requires.
8. Government Shifts
An election can change everything about dealing with foreign buyers. Your buyers might have a new pro-global growth leader who encourages them to buy. Or monetary policy in their country can get tight, forcing them to back off. It’s important to stay informed about other nations’ policy shifts.
As with most things, you will face some risk when dealing with foreign buyers. But if you approach it intelligently and with the right team on your side, the reward is more than worth it. By building your business relationships with the services of an international B2B network like TraDove, you can take advantage of the world getting smaller and make new markets work for your business!