Our globalised world requires giving thought with global scope to our business. Where appropriate, you may come to believe that your product has a market beyond the confines of your immediate surroundings. You may be right, and here’s how to begin to evaluate whether the grass is greener (and the profit margins wider).
Barriers to entry
You may have a product that can compete with foreign products of a similar calibre, all things being equal. But it’s rarely so simple – depending on your product and your prospective market, the target country may look to exclude foreign companies from competing with domestic producers. If you’re a South African producer, there are a number of beneficial trade agreements of which you may take advantage – AGOA, with the USA opens up a large market to your goods. Check which tariffs you may be subject to using the WTO website.
Linked to tariffs are what are known as Non-Tariff Barriers-to-entry, or NTBs. These are standards that importing countries place on certain goods in order to protect domestic consumers. Sanitary regulations might be in play – the EU, for instance, insists on strict (some say excessive) quality controls for certain agricultural stock. Your product may get turned back if it doesn’t accord to the importing country’s standards
You know a lot about your product. You’ve developed it, discovered the costs, and, following your importing research, you’ll know where you can sell it profitably. But you need to know which of those countries has a market that might want to buy your products.
There are a number of ways that you can go about discovering what sort of interest people in foreign markets may have in what you’re producing. As a small business, you’re unlikely to have the funds to hire a market research firm in your target country, but you can get a semblance of that knowledge via other means.
One effective way to discover whether people are interested in you products is to run online ads across a demographic on certain key words. Using Google’s keyword planner tool can give you an indication as to whether there exists a natural interest in products of your kind, and using targeted PPC ads will drive potential customers toward your product. You don’t necessarily need to have you product available in your target country at this stage – your interest is in the interest of other people.
Contacting foreign agents
Once you’ve discovered a market that will import your products, with a consumer base that can make doing so profitable, you can either rely simply on the internet to handle your purchase orders, or, get in contact with an agent in that country to take larger stock orders. For many, using an agent means a greater level of stability – bigger orders, stable supply, local exposure and know-how at the cost of a reduced margin.
Completing these steps can provide you with enough evidence to be confident that your product can compete outside of your home territory. The rest will be up to you.