Common problems exporters face
Are you a growing company looking to expand overseas? Are you scared and unsure about what to do? Do you wonder which markets to target? Are you scared that you will not understand the trading documentation? Or maybe you would like to expand, but you’re not speaking the language, or you have no overseas offices there. Do not fret! Even though there is a number of problems exporters face, you can solve them all! You just need to inform yourself very well and be aware of them. Realizing what a problem might be before it occurs can help you save valuable time – and money – when dealing with it. In this article, we talk about some of the most common of these problems.
Transit problems exporters face
Some of the most common problems exporters face are those that happen during transit. When you are in the business of exporting goods, you do not only need to worry about the cargo, and whether it will ship and arrive on time. There are other things to worry about as well! What happens if the cargo gets stolen? What happens if it is damaged? Having contingency plans for each of these problems can greatly help you and the people you are working with. You need some good logistics planning and a reputable moving company, like Kokusai Express Japan.
Problems exporters face on borders
Another set of problems exporters face are those that can happen on the borders. The most obvious thing is the border control. You need to think about the country you are exporting your goods to. Does it have any special rules and regulations? You need to make sure that something unexpected won’t happen. Employing custom law consultants should help make this process as painless for you as possible.
Customer problems exporters face
The next set of problems exporters face are various problems with customers. These range from the customers themselves making problems, to just not being aware of cultural differences. Again, informing yourself well about the customer and the country can be of great help here.
It is, of course, hard to think of every problem that may happen well in advance, but there are some things you can prepare for. Have a plan for what happens when the customer refuses to pay. Also, try to think about any difficulties you might face that involve the cultural, legal and language problems.
Selling is also a part of export
Another thing to remember is that for you to successfully finish the exporting process, your goods need to be sold. Companies can make a grave mistake of going into the business exporting their goods without even thinking about this. Once the first batch of cargo is exported, and it never gets sold, what happens next?
In order to get ahead of this, you need to explore the market you will be exporting to. Is there a need for you good? Is it a competitive market? If it is, will the cost of your goods match the domestic competitors’ prices? Also, be very careful about the cultural nuances when exporting your goods. Some things are normal in Japan but may be inappropriate in other countries, and vice-versa.
Financial problems exporters face
One of the main concerns, when a company is thinking about expanding internationally, is how much it will cost. And that is a reasonable concern. So here are some of the main things to think about, and some of the main financial problems exporters face.
Always check the creditworthiness of an international company you are working with. They should be professional and reputable. Also, you should think about your own company’s standing. You need to offer credit check or bad debt protection.
Another thing to consider when thinking about money is ensuring your customers can pay in their own currency. This is why you need to think about exchange rate fluctuations. If you do not know much about these, hiring someone who does will pay off in the long run. Making sure you create a healthy cash flow between your companies is always a priority.
Finally, figuring out the way you will be transporting your cargo is another thing to think about. Two ways to do this is by using air freight forwarders and sea freight forwarders. Depending on the type of the good you are exporting, one or the other can take priority. If you have lighter goods, that take less space, air export might be the thing for you. If your products are heavier and take up some room, go for sea forwarding. Keep in mind that even though air forwarding is faster and often safer, sea forwarding is cheaper and cleaner for the environment.
Finally, you need to inform yourself about the incoterm. Incoterms are three-letter standard trade terms. There are eleven of them, and they are terms people commonly use in international contracts for the sale of goods.
For example, you may run into CPT – carriage paid to (the place of destination). This means that the seller pays for the transport of the goods to the destination, while the buyer takes the risk of loss or damage. Another example is CIP – carriage and insurance paid to (the place of destination). This means that the seller pays not just for the transport, but also the insurance coverage of the goods, while the buyer takes the risk of loss or damage.
You can learn more about the Incoterms here. If you fear you will not understand the contracts, these are the things you need to get yourself familiar with. Knowing what’s in the contract is very important. Never sign things you have not carefully read (it’s also smart to have your legal team go over the contracts as well).
Hopefully, we have succeeded in easing your mind about international export. Informing yourself about some of the most common problems exporters face is just the first line of defense against the same problems. When the need occurs, you will be ready to solve them head-on.