Exporting overseas is an exciting opportunity for your business to grow and enjoy significant rewards. Before you start, researching your market and understanding risks will improve your chances of success.
If you’ve identified an opportunity overseas, having an in-depth understanding of your market will help you decide whether exporting your product is a good idea.
Take a closer look at the market; how big is the opportunity, are there any competitors and what will customers be willing to pay? Comprehensive market research is a key step to deciding whether exporting is viable.
You should also see if any prohibitive trade embargoes or sanctions are in place. Socio-political unrest or ongoing economic instability could make exporting a non-starter. Legal requirements, such as liability insurance and complying with local regulations, should be considered too.
Being able to deliver and sell your product thousands of kilometres away requires a network of partners – from banking to shipping to distribution.
Finding the right partners to work with is essential, because a smooth supply line will invariably lead to cost benefits.
ASB trade finance loans provide funding at lower rates than a standard ASB bank overdraft and our international trade experts can also offer advice on shipping and customs processes.
Nothing beats visiting the market you plan to export to, so you can see for yourself the infrastructure, roads, customs, logistics and other obstacles that your product will have to negotiate. There are also a number of Kiwi organisations who can help you understand your shipping and distribution options, as well as follow best practice and avoid pitfalls.
Exporting overseas can create new logistical and financial challenges for any business, so it’s worth answering a few questions to see if your business is in shape to begin exporting its products.
Satisfy yourself that your business has the ability to produce larger quantities of product and that your suppliers can scale up to meet your increased demand. As well as making sure you have the finance to fund this increased volume, it’s also important to have a plan to cope with success; nothing is more frustrating – or potentially harmful to your business - than turning away orders.
Although exporting creates a larger market with greater possible returns, the extended period between production and payment for goods can also create a funding gap. There are two ways you can lessen this impact:
Choosing the right shipping method, understanding customs requirements and having a contingency plan will help you move your goods smoothly.
Typically, container ship transportation is better for larger volumes and is less expensive, but slower. Air freight is suited to lighter or perishable goods, is faster, but more expensive.
Check that there are no restrictions or special tariffs on your goods, and confirm which countries your goods will travel through. You also need to decide who will lodge the paperwork with customs (usually the exporter). Both New Zealand Customs and the Ministry of Foreign Affairs and Trade (MFAT) can provide information on tariffs, duties and free trade agreements.
Plan for delays and unforeseen circumstances, as these can happen; having a contingency plan in place will ensure you can meet your contractual obligations.
Looking to expand internationally or import goods to New Zealand? An international trade expert can help.
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