Introduction
Many first time exporters or
firm managers believe the myths about exporting
that it’s too difficult or
too costly to sell their product in a foreign country. But given below the some
of the important facts that will help a first time exporter to clear all his
misconceptions.
1. Myth: I Am Too Small to
Export
Only large firms with name recognition, abundant resources, and formal
export departments can export successfully.
It is true that large firms typically account for far more total exports but the
real fact is that vast majority of exporting firms in most countries are small
and medium-sized enterprises (SMEs).
2. Myth: I Cannot Afford to Export
I don't have the money for hiring new employees, for marketing abroad,
or expanding production for new business.
There are various low-cost ways to market and promote abroad, handle new export
orders, and finance receivables. This does not require hiring new staff or
setting up an export department. At little or no cost for example, you can
receive product and country market research, worldwide market exposure, generate
trade leads, and find qualified overseas distributors through various Commodity
Boards and Export Promotion Councils.
3. Myth: I Cannot Compete With
Large Overseas Companies
My products are unknown and my prices are too high for foreign markets.
If the product is known in the domestic market then it’s a plus point but even
an unknown product can be exported in a foreign market. Low demand of a product
doesn’t indicates that it will be also not accepted in the international market.
Price is also an important, but it is not the only selling point. Other
competitive factors play a large role including quality, service, and consumer
taste - these may override price. Also prices of a product may not be relatively
high in countries with a strong currency, as in the European Union.
4. Myth: Exporting is Too
Risky
I might not get paid.
Selling anywhere has risks even in the domestic market, but it can be reduced with reasonable precautions.
To assure you get paid, use Letters of Credit (L/Cs). A L/C is a letter from a
bank guaranteeing that a buyer's payment to a seller will be received on time
and for the correct amount. In the event that the buyer is unable to make
payment on the purchase, the bank will be required to cover the full or
remaining amount of the purchase. Proper documentation can minimize the risk
associated with the export business.
5. Myth: Exporting is Too
Complicated
Exporting is too complicated; I won’t understand the laws and
documentation requirements.
You don't need to be an expert to export. There is an abundance of resources
available online that helps the first time exporter about all ins and outs of
the export operations. Government of India and its associated agencies like
Commodity Boards and Export Promotion Councils also provide guidelines to the
exporters.
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