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Exporting 101: Process and Fundamentals
Tekle Sebhatu Ph.D.November 4, 2011
http://[email protected]
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Exporting 101:Export Process and Fundamentals Agenda
• Why exporting/Barriers• Essentials for Export Success• The Export Process• Export market research• Identifying Countries and Products• Mistakes Made by Exporters• Resources• Q & A
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Exporting is not a right, it is a privilege, which can be revoked if rules and regulations are not
followed.
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Why Exporting
95% of the world’s consumers are outside of the U.S.
97% of U.S. exporters are SMEs
75% of exporters have less than 20 employees
63% of SMEs sell to only to 1 Market
Exporting = Jobs
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Exporting Barriers
• Fear of the Unknown• Lack of finance• Export controls/License• Insufficient foreign market research• Lack of distribution channels• Unexpected costs of exporting
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ExportSuccess
Commitment(Long Term)
Relationship(Culture, Understand
Business Practice)
Knowledge(Documents, payments,
shipping, insuring, financing)
Planning
Essentials for Export Success
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The Export Process
Figure 15-3
5. Exporter ships
Brazilian Bank
6.Exporter presents
Docs.
1. Negotiation
Brazilian Importer U. S Exporter
U.S. Bank
2. Importer Pays/arra
nges
4. Exporter notified
3. Sends docs
7
Importer
ClaimsGoods
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Four Steps of Market Research Process
Step 1 . Identify potential market
Step 2. Assess targeted market
Step 3. Draw Conclusion
3 to 5 most promising countries
Statistics & MKT research reportTravel or use export assistance
Conduct SWOTT AnalysisExport Control/Tariff
Examine competitive products
Target 2 to 3 countriesGet help for more insights
Focus:
Focus:
Focus:
Focus :
Step 4. Test Market
Online (Trade leads)Participate trade show/mission
Focus:
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Trade Stat Express (DOC-ITA)http://tse.export.gov/TSE/TSEHome.aspx
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Trade Maphttp://www.trademap.org/Index.aspx
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Which Countries To Enter?
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Practical Market Selection
• What is the size of the market? • Can your company price profitably?• What are legal restraints?• What distribution options are available?• How can your company promote our offering?• How will the competition respond?• How easy is it to get paid?
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Emerging MarketsFrom BEM’s To BRIC’s
BRIC BEM• Brazil
• Russia
• India
• China
• Argentina• Brazil • China (Economic area)• Indonesia• India• Mexico• South Africa• Turkey• South Korea• Poland (Now EU)
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BRIC and BEM Countries• Large population
• Fast growing middle class
• Fastest growing/Liberalizing economies.
• Regional economic powerhouse.
• No longer producers of low-cost/tech products.
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Finding Products to Export
• Local/National Trade Associations Directories• Local Export Assistance Centers (Programs)• Country Specific Publications• Travel• Trade shows• Internet
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Role Of Freight Forwarders
• International documentation and packaging• Carrier and routing information• Export license assistance• Marine insurance rates and coverage• Warehouse and distribution services• Hazardous materials shipping compliance
info
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Blanket Use (multi-shipment use)– Unlimited Duration (no ending date)– Limited Duration (stated ending date)
Single Shipment Use– Shipper’s Letter of Instruction/SLI– Signed statement on Invoice
Export shipment to be handled by a Freight Forwarder requires Power of Attorney
Export Power of Attorney Types
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Common Mistakes Made By Exporters
• Lack of export business plan• Failure to obtain export assistance (counseling)• Lack of sufficient commitment• Insufficient care when selecting
agent/distributors• Chasing multiple orders• Failure to modify product to meet market
demand.
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Thank You for participating!