Exporting can be an extremely lucrative business decision for many companies.  It is also one that is met with significant resistance because of the perceived risks and challenged associated with it.  It is not always a simple process and there are risks, but under the correct conditions and with proper planning and execution, it can make a considerable difference in companies’ bottom line and ability to expand, or even just keep the lights on.  There are many reasons why exporting makes good sense for U.S. exporters that are dependent upon economic and regulatory conditions.  This is not to say that it isn’t a good idea all of the time, or that it is exclusively advantageous to U.S. firms.  The following are a few timely reasons that come to mind right now.  There are many other non-time-sensitive reasons to export listed our Why Go Global page.

 

Take Advantage of a comparatively weakened currency 

The dollar has fallen in value compared to many other world currencies in recent months. This makes your products cheaper to them and their money more valuable to you. This is the perfect opportunity for you to gain foreign buyers with your products/services and prices, and if the dollar regains ground, keep their business with you promptness, reliability, and service.

Mitigate recessionary losses 

Stop watching CNN captivate you with an endless series of ups and downs and start creating your own "ups."  Are sales down?  Has your potential market size shrunk?  In many industries today there are the same number of fish in a smaller ocean.  What do you do? Find additional oceans (international markets).

If you are selling umbrellas in Seattle and for some reason it gets a lot hotter and dryer, you have two options: 1) find some cold water to sell, or 2) find other rainy places to sell your umbrellas.  Now is the time to tighten the belt and become leaner, as well as invest in innovation whether improving processes, products, or expanding your distribution market.  If the bills are being paid but things aren’t as stable as you would like, look at exporting from an incremental costing method, meaning fixed costs are covered without export sales so you can essentially consider export sales (less variable costs) as profit.  This way of looking at it can also justify lower prices to account for transportation and trade barriers.  Lastly, Mr. Obama told you to (just not how).  He's right, exporting and growing because of it is the best thing you can do for the economy (and your bottom line).  And just last week, the guys on the hill did something right, they passed bilateral free trade agreements with Colombia, Panama, and South Korea, finally which brings me to the next reason to export now.

Deregulation of Trade and Foreign Competition

Deregulation is without a doubt a global trend and it is imperative that we take full advantage of all associated possibilities and mitigate all threats to the highest possible degree.  This affects every company and industry differently, positively, negatively or both.  For some it is an incredible opportunity to open new, highly profitable export markets that should be exploited immediately before someone else does.  Maybe this last wave of FTA's is a re-opening of an export market that you were priced out of when another exporting country beat the U.S. to the punch and formed an agreement.  Perhaps you are faced with increased foreign competition in your home market, in which case it might make sense to gain a share of the competition’s home market to level the playing field.  Whatever the situation, it is critical to make sure you are utilizing developments in trade regulations to the full potential.  And if there is an opportunity (or will be soon as in the case of Colombia, Panama, and South Korea) you had better get it while it's hot because any unfilled capacity in a market is likely to be filled very quickly.

Domestic & Global Uncertainty

One thing that I am hearing from many business owners, especially small businesses, is that their costs, particularly of employment, are up substantially due to new regulations and red tape, with the same output and slower sales.  The other common situation is that they are hesitant to invest because the government could come back at any moment, increasing their costs and they don't want to be caught with their pants down (without any cash reserves).  The best remedy for uncertainty at home is global diversification.  Believe it or not, there are still thriving economies out there, and most at least have thriving sectors or demographics.  China's imports have risen 39% in the last year, 112% in the last 5.  China's imports from the U.S. have risen 32% from the U.S. in the last year and 120% ($53.9 billion) in the last 5 to $102.7 billion, making China the third largest importer of U.S. products.  Not to say that China is the U.S. economy’s savior or necessarily the most promising prospect (I’ll leave their potential sustainability issues for another day).  There are plenty of others including Vietnam, Chile, Thailand, and more.

I know many SME owners are probably thinking: "International trade is a very complicated process and we don't have the know-how or experience to do it ourselves, nor the capital to create an export department."  Well, lucky for you, there are people willing to help.  Government assistance centers are good places to start, though they have been significantly thinned in some parts of the country.   There are also a few companies, such as Cobia Global Commerce, that will assist and advise your company through every step of the export process from market selection and organizational preparation to receiving payment, taking on any level of involvement that your needs dictate, at a fraction of the cost of developing an in-house export program. If you think that your company may be able to benefit from exporting, I urge you to read a few books and do your research, or have us perform an internal and external analysis to determine your export viability and profitability potential.

Powered by Bullraider.com
Copyright 2011, 2012 Why U.S Companies Should Export Now - Cobia Global Commerce. All Rights Reserved.
Joomla theme by artisteer review