An integral aspect of starting a successful export business in India is to have a proper understanding of the products being exported. The entrepreneurs need to perform a thorough research of the market where they are intending to export.
The markets should be approached on a priority basis and thorough research should be done on products and designs being done overseas. It is important to learn export related laws applicable in a country, state, or region before going ahead with the business.
Factors to be considered while starting an Export Business
Importance of Prices in Export BusinessPrice is always regarded as a crucial factor in any export related business. So the owners should have a clear idea about the prices that have to be offered to the buyers. Since the selling price is dependent on the source price, it is considered wise to do away with middle men who add very little in terms of value but a lot when it comes to expenses. This also helps in making the final products better from the point of view of quality and reduces the transaction related expenses.
Basic planning for export businessThe main reasons behind doing the basic planning for exports can be mentioned as below:
- Identification of goals – How much earnings are required to make it a profitable business.
- Including systems for gauging and analyzing progress – Reviewing the business plan and performance at regular periods, getting professional assistance if needed.
- Listing of activities needed to achieve goals – Setting up contacts with suppliers and other important people in the business as well as government authorities so as to stay updated and informed. Research is also needed. Professional help can be sought to create a business plan.
- Retaining focus needed to achieve ambitions – Keeping a cool head in spite of financial issues and economic crises and looking for alternative products and services if needed.
- Which products should be chosen for developing exports?
- Which specific steps should be taken regarding operations and what would be the right time to take them?
- What changes have to be made to the products so that they are at par with customer demands?
- What will be the amount of time needed to put to use each component of the export plan?
- Which countries can be considered as prospective markets?
- What resources and personnel will be used only for export related purposes?
- Which distribution and marketing channels should be used?
- What will be the expense in terms of money and time for every single procedure?
- What are the special challenges of the markets in terms of areas like competition, import control, differences in culture, and others? Which strategies can be used to counter them?
- How will results be evaluated and used for changing the plan?
- How shall the export sale price of the products be decided?
Export business Do’s and Don’tsFollowing are some factors that are essential to the export business:
- Making sure the staff members are aware of the plans
- Anticipating possible changes in the market such as fresh taxes and new governments etc
- Getting good advice and verifying export plans with advisors
- Creating a proper time-line of export activities
- Regular review of export plans with advisors and staff members
- Ensuring the presence of sufficient personnel and resources to carry out export plans
- Assigning staff members the responsibility for individual operations
- Making sure present customers are never neglected
- Adapting to changing situations
- Regular review of deadlines
- Creating a heavy document that does not have any movement
- Setting deadlines that cannot be achieved
Product Identification for Exports Business
Following are the most important factors that come into play when it comes to choosing products for export:
- The product should be sourced and made with focus on consistency of quality that should be comparable with the competitors. It is better to go for certified products especially the ISO ones as they perform well in the international markets.
- Learning about import regulations applicable in international markets with special focus on non tariff and tariff regulations.
- It is better to avoid monopolized products. If the exporter is also a manufacturer then he or she should have enough in-house capacity or the ability to get it from other sources in a short time. This is because supply of products at the proper time is an essential ingredient in any company’s success.
- Getting knowledge about special provisions and registration related facts for the product in another country especially for processed food and beverages, chemicals, and drugs.
- The price of the product should fluctuate very little or, even better, never fall. This ensures that the business stays profitable.
- Seasonal facts about products.
- It is always important to verify the export status of a particular product.
- Requirements related to labeling and special packaging of products that may perish.
- Learning about applicable tax exemptions and incentive programs being provided by the government like DEPB and duty drawbacks.
- Special measures needed for heavy, dangerous, delicate, and unpreserved products.
Selection of markets for export business
Following are the various factors that should be considered before selecting a market for export purposes:
- Time zones
- Occupation of people
- Logistical factors like distribution channels and freight
- Cultural beliefs of people
- Regulations like quarantine
- Top competitors
- Labeling standards
- Similar products
- Rules and levels of consumer protection
- Important brands
- Taxes and duties
- Market size
- Gender and age of people
- Presence of local manufacturers
- Family structure and income levels of people
- Agents, suppliers, and distributors
In the secondary level, interested entrepreneurs can look up government websites, companies dealing with commercial market intelligence. They should also contact international organizations for obtaining periodicals, market reports, studies, and surveys on a country or region’s export scenario.
While gathering information on various markets it is important to focus on the following:
- Demand for product being exported
- Medium of obtaining the exported products
- Size of probable customer group
- Presence of niche markets
- Ability of target client group to purchase the product
- Presence of major importers and stockists
- Regulations that may affect the imports
- Various ways to get representation or sales
- Convenience in accessing the market
- Mark ups at various levels of distribution
- Presence of proper channels for distribution
- Promotion of products and services in case of immense competition
- Business environment
- Presence of trade fairs or other business events
- Financial viability
- Packaging of products
- Unique nature of product being exported
- Acceptability of branding.