Pennsylvania SBDC Exporting FAQ

Export FAQs Why export?

Exporting…

• Creates new customers, leading to more sales and profits.

• Reduces dependence on the domestic market or on any one market.

• Flattens production swings and seasonal cycles.

• Permits purchases in larger quantities to obtain quantity discounts.

• Exposes your company and products to world competition – making you more aware of pricing, packaging, design and technology to help sustain your company and your domestic market share.

How to start?

There is no one way to start exporting.

Consider…

• What are your competitive edges and key selling points in your most profitable markets?

• What are the characteristics of your best customers?

• Have you had any overseas inquiries?

• Do you attend or exhibit at a trade show that attracts foreign prospects?

• Do any of your competitors export?

• Do you sell to Canada, subcontract to companies who export or sell to an export trading company that exports your products?

Write the results of your internal review in a few pages to discuss with key management, marketing and finance employees. Then contact your local SBDC trade specialist (end of FAQ sheet) for further assistance.

What is the cost to start exporting?

Exporting requires time and money as in any new business initiative. Research, entry strategies, marketing plans and perhaps a new trade show take time away from other activities, especially challenging in a small business. Allocating time and assigning responsibilities for specific export activities are effective ways to integrate overseas sales into a company’s sales strategy. Budgeting to modify the website, translate marketing materials, change packaging and product specifications, preparing export documentation, attending trade shows and meeting prospects overseas require resources. A marketing plan can help define initiatives, priorities, budget and timelines while building internal consensus for an export program.

Pennsylvania SBDC

Export FAQs | pasbdc.org/international

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How do I choose an overseas market?

While there is no single overseas market appropriate for all potential exporters, there are two approaches to consider in examining a new market: an existing market or a new market. There are benefits and costs to each choice.

A. Established Market for your Product – In mature markets, your product already has a degree of acceptance so For information on already sales may progress more rapidly. The established markets by industry negative is that there is already and product go to: competition with defined prices and https://www.export.gov/Topestablished customers. It is likely that Markets your market share will be divided among competitors.

B. New Market – Entering a new market usually takes more time and money, perhaps requiring product changes to meet overseas standards, language, packaging and product changes.

However, you may have a higher profit margin and perhaps no immediate competition.

For information on creating your own market, check http://globaledge.msu.edu/refer ence-desk/export-tutorials Check under the “Sales and Marketing” topic.

Many companies look to Canada as a first overseas market because of the NAFTA free trade agreement, proximity to the US and similar tastes and standard of living. However, each company should decide which market(s) to enter on a case-by-case basis. The U.S. Commercial Service, the Authorized Pennsylvania Trade Representatives and a trade grant program are useful to exporters in Pennsylvania to target qualified overseas buyers.

Inquiries from overseas prospects are also valid indications of a potential new market for your products.

What changes do I have to make to my product?

This depends on the country and the standards/certifications required to sell in that country.

A good reference point to check specifications is: https://www.export.gov/article?id=Foreign-Standards-and-Certification.

How should I sell overseas?

Sales may be direct to a consumer, wholesaler, agent or distributor. First examine the sales patterns in the US and decide if this is relevant to an overseas market. Wholesalers or distributors may order in larger quantities than domestic customers both to obtain product discounts and to spread fixed costs of freight, banking and handling charges over more products. Selling in various markets may require a variety of distribution methods.

Pennsylvania SBDC

Export FAQs | pasbdc.org/international

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How am I getting paid?

Export insurance from the U.S. Export Import Bank (Eximbank) and established international payment techniques should give a business reasonable assurance of timely and full payment. The trade finance department of your commercial bank can help you with payment mechanisms and access to Eximbank and U.S. Small Business Administration export programs for export working capital, export insurance and financing. Remember there is a cost to all such programs as well as time to understand and to apply for them.

There are four common methods for international payment: cash in advance, letters of credit, documentary collections, and open account. The website below briefly describes each method and its usage. http://www.ita.doc.gov/media/Publi cations/abstract/trade_finance_guid e2008desc.html

How do I deliver products to an overseas buyer?

Using a freight forwarder is typically the easiest way to arrange for goods to be delivered to an overseas buyer, either by air or ocean delivery. Freight forwarders offer shipping quotations, reserve cargo space, handle documentation, arrange inland transportation and provide marine insurance. Smaller shipments and consumer items may be sent via commercial carriers, such as DHL, UPS and the U.S. Post Office and all have useful websites to understand cost and documentation.

What documents do I need?

The most common documents an exporter needs are the Shipper’s Export Declaration, the Bill of Lading, Commercial Invoice, Packing List, Certificate of Origin. There may be additional documents required, such as a consular certificate or an export license, depending on your product and its final destination. A description of each of these documents (and many others) can be found by visiting: http://www.export.gov/logistics/eg_main_018121.asp.

For assistance, contact: To find your local SBDC, visit http://pasbdc.org/centers.

Pennsylvania SBDC

Export FAQs | pasbdc.org/international

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HOW TO PREPARE FOR AN INITIAL SBDC CONSULTATION By answering the questions below, a SBDC consultant can address your concerns more quickly and help you export.

1.) Briefly describe your business (products/services, brief history or provide your website)

2.) What are your export objectives?

3.) What are your target markets overseas?

4.) What export assistance are you seeking?

Pennsylvania SBDC

Export FAQs | pasbdc.org/international

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