Global commerce is mostly about trade between countries, which entails importing and exporting products and services. It is a space where entrepreneurs can build a thriving business. Below are some reasons to consider venturing into the export or import business.
Benefits Of Importing
In the global trade sector, importing refers to purchasing services or products from another nation to be availed to the destination country’s customers. An individual or business can do the importing, and their spectrum of interest in the products or services can vary depending on their target customers. Importing has various benefits, including:
1). Introducing New Products To The Market
Some countries produce goods for other markets. For instance, China and India focus on American and European markets, and it is because of their population purchasing power and market sizes. The American and European markets are the most predominant. Once something hits the two, it will feature in other smaller markets within a year or more.
World commerce is mostly founded on transactional preferences. You introduce a product or service from another country that seems useful or attractive to your country. Technology plays a significant role in the process. The expansion of the internet provides entrepreneurs access to information about a market before importing goods. It helps them know if there is a need for the product on the market and use the same to develop an effective marketing plan.
2). Reducing Costs
Sometimes, it is cheaper for businesses to import resources, products, or parts than to produce them locally. Such is the case when the necessary resources for production are limited. Companies can purchase quality products at a lower cost even after considering the importation expenses. Hence, they opt not to invest in modern machinery, mostly associated with costly overheads. Instead, they import to reduce costs by ordering bulk quantities at a better price to minimize the expenses.
3). Becoming an industry leader
Importing can be an opportunity to shape your business as a market leader in your industry. Consumers will go for new and improved solutions; thus, the manufacturing process is never-ending. Hence, companies worldwide can leverage importing new/unique products and services to outdo their competitors. The first to import a fresh product will likely become a market leader in their industry.
4). Availing High-Quality Products
Entrepreneurs who import can introduce or market high-quality products. They can travel to different countries and visit manufacturing factories and influential players in those markets to find high-quality goods they can import to their countries. Furthermore, the manufacturers can take them through their production processes and provide training and informative courses on standards and practices the entrepreneurs can use to ensure they are adequately prepared to sell the new products in their country.
Businesses that venture into importing will likely get high-quality goods to their local customers. Manufacturers are acutely aware that their reputation depends on producing quality and value. Hence, this is a fact worth considering when planning to venture into the importing business.
Benefits Of Exporting
Exporting is the opposite of importing, and an entrepreneur can consider this business line for numerous reasons. Nonetheless, exporting products and services to other countries can be associated with two chief benefits:
1). Increasing Sales Potential
Companies might consider importing to reduce costs, but exporting can translate into a profitable venture. For instance, it can be an avenue for increasing your business’ sales potential. You can consider exporting your products or service to expand your market reach regionally and broaden your vision to a global level. Your company can focus on discovering new opportunities and tapping into new markets abroad instead of limiting its reach by selling to the local market.
Large and medium companies are better placed to export because they have expanded their influence locally and saturated the market. Hence, exporting to other countries is a chance for these businesses to increase their sales. Moreover, they can leverage the same opportunity to scan for new prospects for expanding their production or dipping their hand in overseas franchising. Consider customs brokerage to make the process run smoothly.
2). Increasing Profits
When exporting products or services, companies or entrepreneurs eye more sales which translates to higher profits. Foreign orders for high-quality goods often surpass those placed locally. But that does not mean the local consumers do not what to buy quality products. The disparity is in the volumes ordered. Local markets will purchase a pallet while overseas customers order a container-full, which is higher sales and hence more profits. Your export sales are unlikely to tank if the overseas markets consider your products innovative and unique.