You see it and I see it: China, India, South America and Europe — large economies with millions of potential new customers. And yet, if you’re like me, all of your business still remains in the United States. For the majority of us, it’s not that we don’t see potential in global ecommerce markets. It’s that we’re very intimidated by the prospect of selling to customers in other countries, with different laws, rules and regulations.
But that’s just silly. Selling overseas is something many online businesses should be doing. So this year I’m going to do it! I’ve done some research, and tapped my friends at the Small Business Administration for advice. And here are a few things that I’ve learned:
1. To find prospective customers, I’m going to reach out to the U.S. DEPARTMENT OF COMMERCIAL SERVICE domestic offices.
I’ve found that they offer several services, including counseling on the best markets for your online business and market entry business strategies. They also provide resources such as market research, training webinars and international partner searches.
Also, if I travel to a country, they can arrange business appointments with screened, potential partners. Not only that, but they will help me find and attend international trade shows and possibly include me in one of their many trade missions to different countries.
2. I will also want overseas suppliers.
And to find those suppliers, I’ll check out the Thomas Register, a well-known and long-time subscription-based supplier discovery resource with hundreds of thousands of vetted suppliers listed worldwide.
3. I will need an agent.
According to the SBA, foreign agents or representatives operate like an overseas manufacturer’s representative. An advantage is that they typically only get paid on commission. So, I need to find someone that knows the territory, and the best way is to go back to the Department of Commercial Services office and use one of its customized programs.
I’m told that I can also look for opportunities and connections in Export USA, a bi-monthly publication that features new U.S. products and is designed to help American companies like mine promote our products and services to buyers in more than 178 countries worldwide.
4. I will attend a few international trade shows this year.
Trade shows are not only a great way to evaluate the competition, but also to locate new partners, suppliers and agents as well as strengthen the relationship with existing ones. These shows are very important to businesses in Europe, the Middle East and Asia. The SBA’s State Trade and Export Promotion Program provides grants to states in order to enable more small businesses to travel overseas. It can fund some of my expenses related to exhibiting at international trade shows or going on foreign trade missions.
5. I will need to travel.
Travelling to visit potential (and established) partners is an essential part of any internal business strategy. Let’s face it — people like doing business with people they know and can trust, especially when the distances can be so great. The State Department has an excellent guide on travel advisories and advice for preparing for overseas trips.
6. I will have to educate myself on certain regulatory issues.
The SBA tells me that my foreign buyers typically will clear purchases through their country’s customs. My company resells business software, so I need to make sure I’m in compliance with certain U.S. rules, which require validated U.S. export licenses. I also want to make sure that I know the list of “denied parties” that cannot purchase U.S. goods or services.
7. I will understand the various ways I can get paid.
The SBA says that there are really only four international methods of payments: cash in advance (or credit cards), documentary letters of credit, documentary collections (either payable at sight or on acceptance) and open account. The payment method will depend on the buyer-seller relationship, what is normal in the market and competition. The pros/cons of each method are listed in this excellent blog from the SBA. All things considered, I’m sticking to credit card payments. There will be fees involved, but the ease and familiarity is worth it.
So, yes. This will be the year where I am going to expand my business overseas. I think I’m ready. Are you?
For more insight on selling overseas, check out our International Shipping page.