prosperity through trade tm importing & exporting a beginner’s guide to

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  • Slide 1
  • PROSPERITY THROUGH TRADE TM IMPORTING & EXPORTING A BEGINNERS GUIDE TO
  • Slide 2
  • WHY PURSUE INTERNATIONAL TRADE? Grow your bottom line Smooth business cycles Use production capabilities fully Defend your domestic market Increase your competitiveness in all markets Expand consumer choices and support Explore new travel opportunities Diversify consumption
  • Slide 3
  • EXPORT / IMPORT Modify Product/Service Finding Buyers/Suppliers Market Research Develop a Strategy After-Sales Service Pricing, Payments & Financing Compliance Logistics 1 2 3 4 5 6 7 STEPS 8
  • Slide 4
  • EXPORTING RESOURCES World Trade Center Denver (WTC) Colorado Office of Economic Development & International Trade (OEDIT) Colorado Department of Agriculture United States Export Assistance Center (USEAC) Small Business Administration (SBA) Small Business Development Center (SBDC) Other Chambers of Commerce Other Trade Associations
  • Slide 5
  • IMPORTING RESOURCES World Trade Centers (WTCs) United States Customs and Border Protection United States International Trade Commission International Trade Administration Foreign Embassies and Consulates Chambers of Commerce (American and Foreign) Industry Trade Associations Customs Brokers
  • Slide 6
  • PROSPERITY THROUGH TRADE TM DEVELOP A STRATEGY 1 STEP
  • Slide 7
  • ARE YOU REALLY READY? Is management committed? Biggest Challenge Corporate Culture What is your value proposition? Can you increase capacity to meet demand? Are you willing to reorganize your business? Are you willing to retrain your workforce? Develop a Strategy If you intend to export
  • Slide 8
  • DO YOU UNDERSTAND YOUR PRODUCT? If you intend to import Have you chosen the right product from the right place? Can the product be imported? Are there quotas or other trade restrictions? Do you need a special permit or license? What is your value proposition? Will it be advantageous to import vs. produce? Develop a Strategy
  • Slide 9
  • PROSPERITY THROUGH TRADE TM MARKET RESEARCH 2 STEP
  • Slide 10
  • GETTING STARTED WITH MARKET RESEARCH Obtain trade statistics Identify potential markets Understand least promising markets Prioritize most promising markets Examine product/service trends Research the competition Analyze marketing strategies Identify any barriers Identify any incentives Market Research
  • Slide 11
  • RESEARCH METHODS Keep apprised on world events/news Analyze trade and economic statistics Seek further advice from others (e.g. trade associations, government officials) Check online trade tools new.export.gov (Country Commercial Guides, Market Research Reports) A to Z World Trade alibaba.com Sourcing Databases Market Research
  • Slide 12
  • PROSPERITY THROUGH TRADE TM FINDING BUYERS OR SUPPLIERS 3 STEP
  • Slide 13
  • SALES CHANNEL CONTINUUM Sales Representatives Agents Distributors Foreign Retailers Direct End Users Exporters Contact w/CustomerLessMore Finding Buyers or Suppliers As an importer, you will be one of these channels.
  • Slide 14
  • FINDING THE RIGHT PARTNERS Buyers Goldkey Service Industry trade shows Advertising in industry publications Training or seminars in key markets Observe other firms with complementary products Observe competition World Trade Centers Association Online Suppliers Foreign Embassies, Consulates Chambers of Commerce Trade Associations Trade Shows Trade Missions Online Resources Buying Agents Finding Buyers or Suppliers
  • Slide 15
  • DUE DILIGENCE Ensure partners are reliable and credible Coface Credit Reports, Country Credit Ratings (WTC Denver) Tour the Factory Hire Independent Inspectors (e.g. SGS) Build in Safeguards in Payment Schedule U.S. Governments Goldkey Service (Distributor Due Diligence) Current status, history of the company Background of current officers Trade and bank references Can they meet your requirements? Finding Buyers or Suppliers
  • Slide 16
  • PROSPERITY THROUGH TRADE TM MODIFY THE PRODUCT OR SERVICE 4 STEP
  • Slide 17
  • CONSIDER Electrical standards (phases, cycles, voltages) Metric system (instruction manuals) Modifications for shipment Installation, Warranties and After-Sales Service Labeling standards Standards of living Geographic and weather conditions Intellectual Property Considerations Patent, Trademark, and Copyright Law Buyer preferences Local customs (religious practices, use of leisure time, taste) Language differences Branding Is your product/service distinguishable? Are colors/numbers offensive in the local culture? Are local tastes and knowledge considered? Modify the Product or Service
  • Slide 18
  • LABELING STANDARDS Country of origin Regulatory Requirements (FDA, Clothing labels) Contents Ingredients (appropriate language) Modify the Product or Service
  • Slide 19
  • PROSPERITY THROUGH TRADE TM LOGISTICS 5 STEP
  • Slide 20
  • TRANSPORTATION METHODS Which method is most reliable? (consult your customs broker or freight forwarder) Air Ocean Truck Rail Courier (e.g. FedEx, UPS, DHL, others) Mail (USPS) Logistics
  • Slide 21
  • PACKING Pack in strong containers appropriate for product Evenly distribute weight Place goods on pallets Ensure packing material is moisture-resistant Straps, seals, and shrink-wrap to safeguard Adhere to mandatory hazardous materials labeling Comply with wood-packaging regulations Potential Problems Breakage Moisture Security Excess Weight Logistics
  • Slide 22
  • DOCUMENTATION Consider a freight forwarder and/or customs broker to help prepare documents Common Documents Air Waybills Bill of Lading Commercial Invoice Consular Invoice Certificate of Origin NAFTA Certificate of Origin Inspection Certificate Dock/Warehouse Receipt Shippers Export Declaration Export License (some products) Insurance Certificate Logistics
  • Slide 23
  • Define obligations, risks, and costs of the buyer and seller involving the delivery of goods that makeup the export transaction DIFFERENT THAN DOMESTIC TERMS (Uniform Commercial Code) INCOTERMS 2010 updated January 2011 Logistics
  • Slide 24
  • E Term F Terms C Terms D Terms Risk Continuum Buyer more Responsible Seller more Responsible Logistics
  • Slide 25
  • CARGO INSURANCE If not insured by the shipper, Obtain your own policy Insure through a Customs or Insurance Broker Ocean Shipments General Average (when damage occurs, everyone shares) Air Shipment Courier Insurance Logistics
  • Slide 26
  • THIRD-PARTY LOGISTICS PROVIDER Freight Forwarders Agents for moving cargo to an overseas destination Customs Brokers Responsible for clearing products through customs when shipping globally Many freight forwarders are also customs brokers Couriers handles all door-to-door services and clearing of single package or lighter goods Logistics
  • Slide 27
  • PROSPERITY THROUGH TRADE TM COMPLIANCE 6 STEP
  • Slide 28
  • U.S. EXPORT CONTROLS National Security Export Controls Department of State ITAR Bureau of International Security and Non-proliferation Nonproliferation Sanctions Directorate of Defense Trade Controls AECA Debarred List Department of Commerce EAR Bureau of Industry & Security (BIS) Denied Persons List Unverified List Entity List Department of the Treasury Office of Foreign Assets Control (OFAC) Specially Designated Nationals List Embargoed Countries Compliance
  • Slide 29
  • U.S. IMPORT CONTROLS Customs Border Protection part of the Department of Homeland Security International Trade Administration U.S. International Trade Commission Compliance
  • Slide 30
  • FOREIGN CORRUPT PRACTICES ACT (FCPA) Prohibits bribery of foreign officials by U.S. firms and U.S. citizens to obtain an improper business advantage Two provisions: Anti-bribery provisions Accounting provisions Compliance
  • Slide 31
  • PROSPERITY THROUGH TRADE TM PRICING, PAYMENT, & FINANCING 7 STEP
  • Slide 32
  • PAYMENT TERMS Cash in Advance Letter of Credit Documentary Collection Open Account Risk to ExporterLessMore Risk to ImporterMoreLess Pricing, Payment, & Financing
  • Slide 33
  • EXPORT FINANCING Consult the following Banker U.S. Department of Commerce Export Assistance Center Small Business Administration ExportImport Bank Colorado Office of Economic Development & International Trade Private Credit Insurance Pricing, Payment, & Financing
  • Slide 34
  • PROSPERITY THROUGH TRADE TM AFTER-SALES SERVICE 8 STEP
  • Slide 35
  • CUSTOMER SERVICE Dont Make it an Afterthought Successful firms make it a priority to Create systems to properly respond to inquiries in their customers language Differentiate between domestic and international sales and support Build positive relationships with partners Provide excellent, ongoing customer service Who is your customer going to call when your product breaks or service fails? After-Sales Service
  • Slide 36
  • CROSS-CULTURAL PROTOCOL Answer queries with tact and professionalism Be understanding and patient with your customers Take time to develop personal relationships Learn at least some of the language if you can After-Sales Service
  • Slide 37
  • SALES CONTRACT Consider Modification of Product Pricing Dumping, Countervailing Incoterm Use of Third-Party Logistics Provider Packing, Labeling, and Shipping Requirements Payment Terms After-Sales Service
  • Slide 38
  • EXPORT / IMPORT Modify Product/Service Finding Buyers/Suppliers Market Research Develop a Strategy After-Sales Service Pricing, Payments & Financing Compliance Logistics 1 2 3 4 5 6 7 STEPS 8