The Key Word for New Exporters
Dennis Hessler
What are the three most important words for any exporter, new
or old?
There they are right on the top of this page: Research,
research, research.
If those words strike fear into your heart, you may be in the
wrong business. Sure, nobody liked researching terms papers in
school, but research is a lot more interesting when the results
can put money in your pocket. There are, I imagine, exporters
out there who just know through intuition which products will
sell to which countries. Most of these people are in other lines
of work now. To be a success in exporting, there's no substitute
for running the numbers.
Research means identifying the product and the countries with
the greatest trading potential using the edge or advantage you
bring into the international trade arena. If you're a shoe
salesman with contacts in the shoe industry, you may want to
narrow your focus to countries that import U.S. shoes. If you
already have contacts in a foreign country, you may want to
focus on products that country imports in quantity from the U.S.
You can spend a lot of money on research, but it isn't
necessary. I recommend starting at your local public library.
It's free. It's close. And it's full of valuable data that will
help you define a market and sell to it. Every library is
different so ask your local librarian for the best publications
and directories that will assist you in your search.
While you're there, ask the librarian where to find the
nearest federal depository library. At least one is located in
every congressional district. The federal depository library can
become your most valuable resource. It contains the information
you need to review when determining the best product and the
best country in which to sell that product. Some of this
information can cost you money. At the federal depository
library, it's free. Your expenses can be limited to the cost of
transportation and making copies.
(Of course, the personal computer is the most powerful
research tool -- plus you can do the research when it's
convenient to you! Check out http://www.spyglasspoint.com for
ways to use your computer as a research tool in international
trade).
What are you looking for in your research? You want to
determine which countries are buying what products. This isn't
the time to break any new ground. If Venezuela is buying U.S.-
made widgets, then it's likely you can sell widgets there too or
at least widget-related accessories and equipment. What you
won't know right away is whether or not the widget you want to
sell is competitive in the market. You'll find that out when you
approach the supplier in step 5.
HOW TO FIND A TARGET COUNTRY
There are simple steps to follow in conducting your research.
Let's hit some of the important ones.
For the sake of this discussion, let's assume you've
identified a product line for export. This was probably
determined on the basis of your edge or advantage. Now you've
got to determine where to sell it.
The first step is to classify your product. This is pretty
easy and if you already have a freight forwarder or want to test
helpfulness of potential freight forwarders, call him up and ask
for the SIC Number, Schedule B or Harmonized Code number and
Standard Industrial Trade Classification (SITC) of your product.
If you can't get them from a freight forwarder, you should be
able to find these numbers in local library publications or on
the resource disk if you own my The Computer User's Guide to
Running Your Own Exporting Company. You can also call 1-800-USA-
TRADE and ask them.
These classification numbers are just different ways used to
research your product. No, I don't know why there are so darned
many different systems but I'll show you what to do with them in
a minute.
First a word about the National Trade Data Bank. This is an
information resource with which you should be familiar when it's
time to do research. The NTDB is a CD-ROM disk published by the
U.S. Commerce Department and is chock-filled with all kinds of
information. In fact, just about the only thing wrong with it is
there is SO much information and you have to pay for it. As of
this writing, cost is $59 per month ($75 outside the U.S.) or
$575 for a year's subscription ($775 outside the U.S.). Of
course, you can review it for free at federal depository
libraries -- and there are about 900 of them around the U.S.
It's also available on line (check out
http://www.spyglasspoint.com/links.html for some valuable trade
links).
Now let's talk about the U.S. Department of Commerce a little
more. Think of this beleaguered department as a treasure trove
guarded by an angry dragon. The treasure trove is the
information about markets, products, contacts and services you
can use in your exporting business. The dragon is bureaucracy
and under staffing. Let me explain.
While the U.S. Department of Commerce International Trade
Administration is a valuable resource, you may have to convince
them that you're representing a company seriously interested in
exporting before they will make some of their resources
available to you. It ain't right, but that's the way it is.
In a perfect world, the first contact you would make when
developing facts and figures would be at the nearest U.S.
Export Assistance Center (call 1-800- USA TRADE to find the one
closest to you). Trade specialists wouldn't do your work for you
but they would tell you about other reports that could help and
assist you in interpreting the figures you've located. Of
course, I said in a perfect world. In this imperfect world,
trade specialists are overworked and understaffed. Frankly,
particularly in big cities, they won't even return your phone
calls. If you are an intermediary just getting started, they
will probably insist you have a sole agent agreement with your
supplier before they will even sit down with you. Still, if you
are respectful when talking with them and don't make their job
any harder (by doing your homework in advance) you may be able
to get assistance even if you're just a small timer. Just don't
count on it.
What do you do with the information you find in these reports?
The NTDB will show you how much of a particular commodity --
typewriter parts in this example -- the U.S. exported over a
certain period of time. It will tell you which countries were
most likely to buy typewriter parts. Don't just pick the
countries with the biggest sales. You may discover competition
will keep you out of those markets anyway. Instead, look for
those countries that have a high RATE of growth. This could be a
hot market and wide open for newcomers like yourself.
The next step is to look at the market research section of the
National Trade Data Bank to uncover recent reports about your
market. Check out the NTDB World Fact Book to determine if the
country you have selected will be easy to trade with thanks to
customs and language. Determine if the area is politically
stable and is not so poor that it is unlikely to accept sales of
other U.S. products.
You will probably come up with a list of countries that are
potential targets for your first exporting effort. Bear these
facts in mind. If you're looking at a big, industrialized
country to be your first market, you may discover it is
prohibitively expensive to break into the market. Smaller
countries will take just as much time to research, but may be
easier to penetrate.
One final word about research. Don't despair because you
aren't sure which forms to review or where your local Export
Assistance Center is or how to sign up for the National Trade
Data Bank. There is one phone number that will give you an
answer to all your questions. It's the Department Of Commerce's
Trade Information Center. I know, I just said the Commerce
Department isn't always cooperative when new exporters call.
That's true. But the folks at the Trade Information Center have
always been helpful when I've called in with dumb questions.
When you're confused about where to turn next, simply dial 1-800-
USA-TRADE (800-872-8723) and they can direct you, send you
information and provide lots of other services. This is the one
phone number the new (and experienced) exporter must have.
************************************************
I produce a range of information products on various subjects
related to exporting and importing. Of course, I think they're
all great, but if you have to pick just one, I'd suggest The
Computer User's Guide to Running Your Own Exporting Company.
Knowing how to use your computer in international trade is vital
and this package shows you how to do it.
A complete listing of all my information products and some
produced by others is available at my web site:
http://www.spyglasspoint.com. You can't know too much when it
comes to running your own business. There are lots of great
books on exporting. A must-have on your shelf is the U.S.
Commerce Department's current edition of A Basic Guide to
Exporting. When you order either The Computer User's Guide or
The Exporter's Master Package, you'll receive the entire book on
CD-ROM absolutely free.
If you want to learn more about getting started in exporting
including frequently asked questions, common mistakes and a few
of my favorite Internet links, go to my web site at
http://www.spyglasspoint.com. You can also download a sample
copy of my monthly newsletter written for new international
traders, the International Trade Connection, by emailing to
newsl...@spyglasspoint.com.
I'll see you again next week with Step 4 in Getting Started
in Exporting!
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Dennis Hessler | http://www.spyglasspoint.com
Spyglass Point Productions | Den...@spyglasspoint.com
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Publisher of The "International Trade Connection"
newsletter and "The Computer User's Guide to Running
Your Own Exporting Company."
SAMPLE NEWSLETTER: newsl...@spyglasspoint.com
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