Exporting 101: Process and Fundamentals

1. Exporting 101: Process and Fundamentals TekleSebhatu Ph.D. November 4, 2011 http://www.stcinternational.us stcintL@q.com

2. Exporting 101:Export Process and Fundamentals Agenda • Why exporting/Barriers • Essentials for Export Success • The Export Process • Export market research • Identifying Countries and Products • Mistakes Made by Exporters • Resources • Q & A

3. Exportingis not a right, it is a privilege, which can be revoked if rules and regulations are not followed.

4. Why Exporting 95%of the world’s consumers are outside of the U.S. 97%of U.S. exporters are SMEs 75% of exporters have less than 20 employees 63% of SMEs sell to only to 1 Market Exporting = Jobs

5. Exporting Barriers • Fear of the Unknown • Lack of finance • Export controls/License • Insufficient foreign market research • Lack of distribution channels • Unexpected costs of exporting

6. Essentials for Export Success Planning Commitment (Long Term) Export Success Knowledge (Documents, payments, shipping, insuring, financing) Relationship (Culture, Understand Business Practice)

7. The Export Process 5. Exporter ships Importer Claims Goods 7 U. S Exporter Brazilian Importer 1. Negotiation 6.Exporter presents Docs. 4. Exporter notified 2. Importer Pays/arranges 3. Sends docs U.S. Bank Brazilian Bank Figure 15-3

8. Step 1 . Identify potential market Four Steps of Market Research Process Step 2. Assess targeted market 3 to 5 most promising countries Statistics & MKT research report Travel or use export assistance Focus: Step 3. Draw Conclusion Focus: Conduct SWOTT Analysis Export Control/Tariff Examine competitive products Step 4. Test Market Target 2 to 3 countries Get help for more insights Focus : Focus: Focus: Online (Trade leads) Participate trade show/mission

9. Trade Stat Express (DOC-ITA)http://tse.export.gov/TSE/TSEHome.aspx

10. Trade Map http://www.trademap.org/Index.aspx

11. Which Countries To Enter?

12. Practical Market Selection • What is the size of the market? • Can your company price profitably? • What are legal restraints? • What distribution options are available? • How can your company promote our offering? • How will the competition respond? • How easy is it to get paid?

13. BEM Emerging MarketsFrom BEM’s To BRIC’s BRIC Brazil Russia India China Argentina Brazil China (Economic area) Indonesia India Mexico South Africa Turkey South Korea Poland (Now EU)

14. BRIC and BEM Countries • Large population • Fast growing middle class • Fastest growing/Liberalizing economies. • Regional economic powerhouse. • No longer producers of low-cost/tech products.

15. FindingProducts to Export • Local/National Trade Associations Directories • Local Export Assistance Centers (Programs) • Country Specific Publications • Travel • Trade shows • Internet

17. Role Of Freight Forwarders • International documentation and packaging • Carrier and routing information • Export license assistance • Marine insurance rates and coverage • Warehouse and distribution services • Hazardous materials shipping compliance info

18. Export Power of Attorney Types Export shipment to be handled by a Freight Forwarder requires Power of Attorney • Blanket Use (multi-shipment use) • Unlimited Duration (no ending date) • Limited Duration (stated ending date) • Single Shipment Use • Shipper’s Letter of Instruction/SLI • Signed statement on Invoice

19. Common Mistakes Made By Exporters • Lack of export business plan • Failure to obtain export assistance (counseling) • Lack of sufficient commitment • Insufficient care when selecting agent/distributors • Chasing multiple orders • Failure to modify product to meet market demand.

21. Thank You for participating!