Common Mistakes Many Exporters Make
Below are some of the common mistakes many exporters make, as well as ways in which you should avoid them.
1. Expanding to too large of a geographic area
Every country has its unique personality, and those personalities are comprised from millions of people in that country. However, every country is comprised of smaller communities, whether they’re states, provinces, villages, towns, and neighborhoods. Each of these subsets represent a microcosm of the whole. Failure to understand that each region of a country has its own tastes and needs is a surefire way to exporting failure.
2. Selecting the Wrong Overseas Partners and Distributors
Just as you need to be careful not to grow too quickly and too “generically” when first starting out your export business, it is critical to your future and continued success that you find overseas partners and distributors that align with your company’s goals and values. This is where many organizations fail before they have even really begun.
You need to be on the ground and meeting potential partners and distributors. Do they understand your product or service? How do they see your product or service succeeding locally? Interview them like you would for any important position in your domestic office. Once you have found the right fit, treat them well. This means both financially as well as staying in touch, answering any questions, and letting them know that they have your support and trust.
3. Not Giving it 100% commitment
If you or anyone in a position of leadership on your team is not ready and willing to give your expanding export business 100% support, you will fail. You need complete buy-in from key stakeholders if this is going to work. Why? Because if your CFO isn’t on board, they won’t want to pay your carefully selected overseas partner the wage they need to be successful or they won’t support paying a bit more for a quality supplier overseas.
4. Not Adapting things from “Home”
One of the reasons you may be looking to begin exporting internationally is because business is good at home, and, naturally, you’d like to replicate that success elsewhere. This is one area, however, where many people fall far short of their expectations. It is important at this moment to consider the things that have made your operations successful up to this point. Where are you located? What’s the geography? The socioeconomic situation of your clients? What are their values? You probably know the answer to these questions, and that is great. However, what is the market like in the market you’re looking to expand to?
5. Not Meeting Local Regulations
Nothing can shut down operations faster than operating outside the boundaries of local rules and regulations. Research the barriers to entry, permits, licenses, etc. that you may need in your new locality before you set up shop. Local municipalities may levy significant fines until you come up to compliance, may shut you down until you comply, or both.
If you’re not sure what regulations need to be followed, find someone in your target market who is well-versed in the local business culture. They often know what rules need to be followed and can put you in touch with the necessary departments and bureaus.
6. Ignoring New Market when Things are good (or bad) at Home
It is very common for companies to ignore their international wings of the business when things are going well at home. Increased revenues and increased profits lead many business leaders to reinvest that capital back into the domestic business. While this is being necessarily a bad thing, doing so at the cost of ignoring your international offices can have serious effects. You can lose foothold in a key location; officers in your export market may feel underappreciated and leave; or the business will completely dry up.