Introduction
A key factor in any export business is clear
understanding and detail knowledge of products to be exported. The selected
product must be in demand in the countries where it is to be exported. Before
making any selection, one should also consider the various government policies
associated with the export of a particular product.
Whether companies are exporting first time or have been in export trade for a
long time - it is better for both the groups to be methodical and systematic in
identifying a right product. It’s not sufficient to have all necessary data 'in
your mind' - but equally important to put everything on paper and in a
structured manner. Once this job is done, it becomes easier to find the gaps in
the collected information and take necessary corrective actions.
There are products that sell more often than other product in international
market. It is not very difficult to find them from various market research
tools. However, such products will invariably have more sellers and consequently
more competition and fewer margins. On the other hand - a niche product may have
less competition and higher margin - but there will be far less buyers.
Fact of the matter is - all products sell, though in varying degrees and there
are positive as well as flip sides in whatever decision you take - popular or
niche product.
Key Factors in Product Selection
• The product should be manufactured or
sourced with consistent standard quality, comparable to your competitors. ISO or
equivalent certification helps in selling the product in the international
market.
• If possible, avoid products which are monopoly of one or few suppliers. If you
are the manufacturer - make sure sufficient capacity is available in-house or
you have the wherewithal to outsource it at short notice. Timely supply is a key
success factor in export business
• The price of the exported product should not fluctuate very often -
threatening profitability to the export business.
• Strictly check the government policies related to the export of a particular
product. Though there are very few restrictions in export - it is better to
check regulatory status of your selected product.
• Carefully study the various government incentive schemes and tax exemption
like duty drawback and DEPB.
• Import regulation in overseas markets, specially tariff and non-tariff
barriers. Though a major non-tariff barrier (textile quota) has been abolished -
there are still other tariff and non-tariff barriers. If your product attracts
higher duty in target country - demand obviously falls.
• Registration/Special provision for your products in importing country. This is
specially applicable for processed food and beverages, drugs and chemicals.
• Seasonal vagaries of selected products as some products sell in summer, while
others in winter. Festive season is also important factor, for example certain
products are more sellable only during Christmas.
• Keep in mind special packaging and labeling requirements of perishable
products like processed food and dairy products.
• Special measures are required for transportation of certain products, which
may be bulky or fragile or hazardous or perishable.
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