The purpose of this article is to look at how companies can successfully breach the international market and do B2B trade with foreign customers. The importance of starting an international trade process cannot be understated. It is estimated that in just a few years’ time, we will see 50% of all business transactions being done internationally .
If you are considering starting a small scale international business, there are some points you need to consider. This article will focus on some aspects that may help make your journey more straightforward and profitable.
What is International Trade?
According to 3m 1860 buy, International trade is a process of swapping goods and services from one country to another. Most of these international transactions are done through the transfer of money. Though this is changing, since the rise of e-commerce, with goods being traded for goods.
International trade can be divided into several stages:
Exporting: Bringing goods and services from your country to another one
Importing: Bringing goods and services into your country from another one
Trading: The process of doing business in multiple countries at once (Also known as International Wholesaling)
Why do companies engage in international trade?
There are many reasons why companies prefer trading internationally over local trading. The main reason is that international trading provides access to new markets. Foreign customers may demand different features than domestic ones. So engaging in b2b international trading allows companies to provide services to a wider range.
Another reason is the ability to sell products that are produced in high volumes domestically but are not easily accessible in other countries. An example would be mini motorbikes, which are difficult to find outside of Europe yet they are produced in high volumes in domestic factories.
International trade also reduces overheads for businesses who produce goods within their own country’s borders. By exporting these goods via international trading, owners do not have to bear the costs. Involved with setting up production plants in foreign countries or hiring employees abroad.
What are the benefits of engaging in international trade?
One of the biggest advantages of doing business internationally is access to new markets. Not only does this mean more sales, but also greater variety. By offering a global product, businesses can see wider returns and therefore increase their profits.
International trading is also great for companies who manufacture goods domestically as it allows them to avoid the costs of setting up production plants abroad or hiring foreign employees . This reduces business overheads significantly and increases profit margins.
Finally, international trade saves time and money on marketing efforts . By expanding your reach on an international level, you gain access to new markets without having to spend anything on marketing or advertising your products in those countries. Just by shipping your products there, you’re guaranteed sales as soon as customs gives the go ahead!
How long does it take?
International trade often takes several weeks before any money exchanges hands. The time involved depends on the shipping method that is used.
If you are using Shipping Container Transport , it can take between 8-10 weeks to deliver your goods to their destination. This is because containers are shipped by sea, which relies on ocean currents and winds. Containers do not travel at a uniform speed, so while some containers may take more or less than 10 weeks, this is an average estimate of how long it takes for them to get from one country to another.
What type of products or services do I want to sell abroad?
This may seem like a simple question but it’s vital to get right from the beginning. If you’re still looking for funding for your new venture, then pitching the wrong type of product or service to your investors could be the deal breaker.
What are the local customs and do I need a license?
Every country is different when it comes to international trade laws. Customs, licensing requirements, taxes etc. vary greatly between countries – even continents! This can be daunting for new businesses that want to export goods internationally but don’t have in-depth knowledge of foreign markets yet .
The best advice is not to attempt too much at once. Get some overseas market research done before deciding on what types of products or services you want to sell abroad . Also, get familiar with the relevant government customs website so you will know how to get your product through customs quickly and legally.
How will my business reach out to new customers abroad?
The manner in which you conduct your international trade should depend on what you are selling. If it’s a physical product, then your options for overseas distribution will be greatly limited by the size and weight of the goods. Your best bet is to find a reliable third party that can distribute your products overseas.
If you’re selling digital or service based products, then there are a number of online marketplaces where you can sell directly to consumers without having to worry about shipping and logistics issues . Even though this method may not make sense for everybody , it could be well worth investigating. How do I know what price I should charge?
This question has no simple answer because prices fluctuate from region to region depending on local economic factors and demand. The only way to find out what the right price is, is by doing market research and testing prices in a small segment. Once you have got some data on what your competitors are charging and what consumers in the region are willing to pay, then you can decide on an appropriate price for that region .
Are there any government incentives or trade agreements?
Many countries offer various incentives and direct foreign investment programs aimed at boosting their economy . This could be anything from tax-breaks when hiring new employees, support for exporting goods overseas or even training in international business practice. Be sure to check with the relevant authorities about any potential benefits. Available in your target country before starting your international trade process.
How should I organize my workforce abroad?
If your business intends to have a foreign workforce, then you will need to take some factors into consideration. Foreign employees may require special work permits and immigration status so be sure to do your research before taking the plunge and hiring abroad.