Starting in Exporting: Step 7
Dennis Hessler
Through research and discussions with in-country representatives or
assistants, you've already determined there is a market for the product in
your target country. Preliminary work has determined an acceptable price
range for the product. Now it's time to get some buyers.
Of course, if you have an in-country agent and he's doing his job, you may
have buyers pretty fast. In the meantime, a good place to start --
especially if you don't have in-country representation -- is the Commercial
Service International Contacts (CSIC). This listing, which used to be
called the Foreign Trader's Index, is included in the National Trade Data
Bank. This is basically a list of more than 50,000 foreign companies broken
down by commodity who want to import U.S. products. In the past, many of the
names on this list were old and of little value. The Commerce Department, to
its credit, has been working hard to update this list more often.
The Trade Opportunities Program (TOP) is a good way to find prospective
buyers as current as yesterday's newspaper. The Commerce Department
publishes trade leads received and disseminates them each day in the Journal
of Commerce newspaper and the Economic Bulletin Board. Call (202) 482-1986
for more info on finding these hot leads. Bear in mind that many of these
leads are dead-on-arrival. That is, the order may well have been filled by
the time you read about it. In global trade, it pays to move fast!
American Chambers of Commerce Abroad are located in more than 40 countries
and can provide current information on trade opportunities in their country.
If you're visiting overseas, make sure to stop in at the local American
Chamber of Commerce. A complete listing of countries with American Chambers
of Commerce is included in The Computer User's Guide to Running Your Own
Exporting Company (http://www.spyglasspoint.com).
A lot of my customers have enjoyed success finding buyers using the
magazine Commercial News U.S.A. Published ten times a year, it promotes U.S.
products in overseas markets to more than 100,000 potential buyers. It's a
good way to test your product inexpensively in the foreign market. Call
1-800-USA-TRADE for more information on advertising in Commercial News
U.S.A. as well as other programs the Commerce Department offers to help
exporters sell overseas.
If you own or have access to a computer, there are a host of trade
opportunities available. The Computer User's Guide to Running Your Own
Exporting Company (http://www.spyglasspoint.com) details the important data
banks, trade bulletin boards, world wide web sites and lots more. What I
want to outline here is how some inexperienced traders "get burned" in the
process of hunting down trade leads they uncover on the information
superhighway.
Many new traders surf the Internet and trade newsgroups for hot trade
leads. Their goal is to find a product then look for a buyer of that
product. This is not in keeping with my recommendation to develop
relationships in the global marketplace which some new traders think is just
too much trouble. Let me give you an example.
I saw an ad in CompuServe's International Trade Forum a while back that was
one of the funnier ads. A man was advertising 100,000 barrels of "bonny
light" crude oil from Nigeria for $17.50 per barrel. You know how silly this
ad is if you know anything at all about the oil business. First of all, the
only people who can use crude are oil refineries and their buyers have a
very sophisticated online trading system. They know where every "spot"
barrel of crude in the world is at any time.
In some countries (like Nigeria) generals will try to sell crude oil under
the spot market price in order to get their money out of the country. Major
refiners won't touch a deal like this but inexperienced traders figure if
they can get just 2 cents for every barrel -- and do the same thing every
month -- they'll be rich. What they don't know is that crude oil in the
ground must be pumped and fed into a pipeline, sent to a port and loaded to
a tanker, and that all this requires up front cash. When it's time to ship,
they may have to pay fines and fees of up to $10,000 a day, pay off loading
costs, pipeline costs, duties, etc., etc. The $17.50 per barrel cost is
already $20.75 and they haven't made a nickel yet.
The point is that trying to pull together a deal like this makes sense if
you're in the business. If not, you're only kidding yourself if you think
you can make it work without knowing ALL of the details. This applies to
huge deals like crude oil right down to a $10,000 widget transaction.
Knowing all the costs is critical to your success in the international trade
business. That's why it's important to use your edge when getting into
global trade. Your banker, freight forwarder and Export Assistance Center
can help you make sure you've left nothing out when you're totaling costs.
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There lots more information about determining costs and profit margins in
my popular start up package, The Computer User's guide to Running Your Own
Exporting Company. Learn more about it at http://www.spyglasspoint.com
As an exporter and trade consultant, I've helped hundreds of entrepreneurs
get started on the road to a profitable lifestyle as an international
trader. I can show you too.
A complete listing of all my information products and some produced by
others is available at my home page: http://www.spyglasspoint.com/home.html
You can also download a free sample copy of my monthly newsletter written
for new international traders, the International Trade Connection, by
emailing to newsl...@spyglasspoint.com. If you have questions about any of
my products or international trade in general, e-mail me at
Den...@spyglasspoint.com or call me at (850) 438-5527.
I'll see you again next week with Step 8 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
phone: (850) 438-5527
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