Selling Edibles: A get-started guide to expanding your business via exporting
Looking to increase your company's sales and profits? Firms that are succeeding domestically should consider expanding overseas. Many companies tend to shy away from the unknowns of exporting, but now is an excellent time to enter the world market.
Exporting internationally improves overall profitability for most companies. Orders from international customers are often larger than they are domestically, because importers overseas stock by the container rather than by the pallet. Furthermore, increased sales tend to increase productivity by lowering per unit fixed costs.
Many companies tend to fear the thought of exporting or get lost in the process. But today, exporting is easier than ever. Export assistance is available through the Michigan Department of Agriculture and Rural Development (MDARD), Food Export-Midwest, United States Department of Agriculture (USDA) trade facilitation desk and other export providers. These organizations can provide your company with a wide range of export assistance to help introduce you to the world of exporting.
As a beginning exporter you will want to learn the basics of exporting. This includes documentation requirements, shipping procedures, receiving payments and writing contracts. MDARD offers exporting seminars throughout the year that are geared toward new exporters. In partnership with Food Export – Midwest, MDARD provides assistance to small- and medium-sized food and agricultural exporters of all levels of experience.
Getting started in exporting requires finding a market that will be suitable for your product. The markets that tend to bring the most success are those with stable economic and political regimes with relatively low tariffs and regulations, a favorable exchange rate, and reasonable transportation costs as a percentage of the cost of the goods you are selling. You should then find which markets import products like yours, which market segments might be best, and what kinds of competition you might face.
When marketing your product, you should stress the quality of your product as defined by consumers in the market to which you plan to sell: is it organic, healthful, low-carb, or ready-to-eat? The quality of your product as well as the unique features you can describe about it – a skillful preparation process or the best ingredients, for example – can give your product the comparative advantage that buyers are looking for.
Cultural differences between countries still matter – both for you as an American businessperson and for the look and sound of your product. Business in many countries is expected to take the form of friendly, long-term, trusting relationships between buyer and seller: Focus on why you and the buyer should do business together, rather than approaching them cold as simply a seller. Spending time to get to know the business culture of a country to which you are exporting is crucial in making successful export sales.
The name of a product and how it is labeled are also important considerations in deciding whether to export a product and whether to make changes to a product before offering it internationally. USDA's FAIRS reports document the specific regulations that a given importing country may require for product labeling. Also important to note is the meaning of a product's name in the context of the market to which you are selling. A product whose name means something different or offensive when translated directly is unlikely to find much success.
The exporting process requires studied market research and attention to details. While it can sound formidable, the many resources listed above provide assistance for companies of every level of exporting experience, from those looking to begin to the seasoned exporter. Beginning or expanding your exports can make the difference your company needs to be successful in an increasingly globalizing economy.
Food Export-Midwest provides export assistance for small to medium sized companies throughout the Midwest. Some of their services include buyers missions, trade show assistance, a partial reimbursement program for international marketing expenses (the "Branded Program"), and in-market representatives throughout the world to assist companies.
Buyers' missions are an inexpensive and convenient way to meet one-on-one with international buyers without leaving the United States. Typically buyers mission are held in conjunction with major U.S. trade shows. Companies select which buyers they would like to meet, and then they usually have a 30 minute business meeting with the buyer. This is an excellent way to get feedback on your product's market potential and meet prospective clients.
Food Export-Midwest also offers the Food Show Plus! Program, which includes assistance to companies at overseas tradeshows. Services usually include pre-show product research regarding pricing, import regulation, and competitor analysis, translation of exhibitor material into local language for show visitors, interpreters at the show booth and on-site show assistance from Food Export's In-Market Representative.
The Branded Program provides qualifying companies a 50 percent cost reimbursement for a wide variety of international marketing activities including package and label modifications, advertising, in-store promotions and product demonstrations and fees for exhibiting at some overseas tradeshows. (For more information on the Branded Program or any other Food Export-Midwest service visit www.foodexport.org.)
The USDA launched a trade facilitation desk to provide stakeholders with more information on foreign import requirements such as certification, documentation and registration. The trade facilitation desk is designed to provide a "one stop shop" approach for U.S. exporters where they can obtain technical information. For more information visit www.fas.usda.gov.
Zmitko-Somers is the international marketing program manager, agriculture development, for the Michigan Department of Agriculture & Rural Development. 517-241-3628, email@example.com.