Avoid These Common Exporting Pitfalls

Posted by: Annie Yang - Global Chamber on Monday, July 16, 2018

We were pleased to recently have three extraordinary top executives speak about opportunities and challenges with product exporting. The process includes complications in compliance, ethics, communications, insurance, currency, intellectual property rights, and competitive pricing. In our recent Globinar on exporting products abroad, we discussed common pitfalls of new exporters and how to deal with those issues that are often unforeseen.

You can watch the discussion HERE, and read more below for some key points.

 

Understanding Your Market

Research is key before taking any products abroad. This includes not only understanding compliance laws, tariffs, and other restrictions, but also packaging procedures and whether your product works in other countries. For Melinda Trego, Co-founder and COO of Eyetech Digital Systems, after making sure her company’s technology met a country’s legal standards, she realized another issue—that the product was not working the same way because that country’s usual electrical power differed from that of the United States. Also, details in product design and packaging are important to note as anecdotally, a product functional in Arizona’s dry climate could have corrosive components in a humid climate.

In addition, finding the right business partners is one of the most important steps. A business partner who is local to the market region that you are trying to target, who can be trusted to take care of some components of sales and marketing where you might lack the expertise can significantly boost your prospects abroad. Additionally, also familiarize yourself with all the local compliance laws and it was advised to stick to your business’ core policies across all borders. Lynn James Meyer, CEO of Biosafe noted that there will be times when your business partner may say something along the lines of, “Well this practice is how everyone else does this, and this is how we’ve always done this, so it’s okay.” That doesn't mean it's right for you. Make sure to stand ground and not let that change your own ethical values.

Importance of Insuring Your Exports

When taking your products abroad, there is a “black hole” period when control over handling the shipped product is shifting, and local officials take over to perform security and compliance checks. That's when regional transportation services take over delivery of the products. From exporting shampoo, to optical technology, to rugs, getting your products insured during this entire exporting process is most important. There are risks at every step of the way.

Barbara Barran, Founder & CEO of Classic Rug Collection shared how product was lost on one of her first shipments abroad, but luckily she had insured it, and only incurred 10% of the loss. When you place full trust on any of the distributors, transportation services, business partners, and local officials, you set yourself up for high-stakes financial loss regardless of how unlikely it may seem at first glance.

Resources are also available for consultation on credit checks of distributors, compliance laws, and product viability by country, so take advantage of them.

Where to Find Resources

It might seem like figuring everything out yourself is possible, but there's a lot to consider... and outsourcing some of the components is recommended. In addition to research on your own, expert consultation that can help you understand the market and network is equally important. Consultation is especially helpful for international compliance, intellectual property, freight forwarding, banking, insurance, and distributor reliability, which are all areas to be considered when exporting products.

In addition if the product requires intellectual property protection, be especially sensitive to all legal contracts and make sure everything you'll need is included in the contract. Get a great attorney on this... Global Chamber can help you get connected to the right people.

Resources can be found at Global Chamber and many of our local alliance organizations. Some countries have specific organizations aimed to help facilitate international business in those countries, examples including KOTRA, JETRO, or MITA which all typically collaborate with the Global Chamber.

Your country's EXIM Bank is a resource that exporters should take advantage of. They can even conduct credit checks on distributors.

Discriminating by Country

Understanding your market also includes understanding each target country’s currency strength and enforcement of intellectual property laws. When making transactions, Barbara Barran of Classic Rug Collection only has a few currencies she is willing to accept, and all others she requests to be paid in USD. For Biosafe, protecting their intellectual property is an important and sensitive matter, so they only conduct business in some countries where they are sure their patents will be honored. Treating every market the same way will almost certainly NOT be the best business practice, since every country has different laws, cultures, and preferences. It would be best to tailor your business practices and models so that varying demands are met in every country.

While your business changes across borders, your attitude should always remain the same—to treat every individual with respect and sincerity because when you go abroad, you represent not only yourself and your business but you also act as an ambassador for your country.

Conducting thorough research at every step of the process is the most important, and that includes understanding laws, consumers, competitors, and every individual involved in the process. It is especially helpful to know the right people, so don't shy away from networking, especially regarding any international business.

 

Speaker Biographies

Lynn James-Meyer - Founder and CEO, BioSafe Technologies, Inc. Lynn is the product developer, founder and CEO of BioSafe Technologies, Inc. The company has been manufacturing and exporting a specialized non-toxic head lice shampoo since 2003 and exporting in bulk to several large European multinational companies where the formulation is further packaged and private labeled into branded lines of products for use on children. Lynn is a graduate of American University in Washington DC with a major in Primary Education and minor in Biology and Psychology. In 1990 she volunteered to work on a humanitarian project in Brazil. Lynn later negotiated with a multi-national chemical supplier to reformulate and purify a specialized raw material; initiated clinical trials in 4 countries; obtained marketing registration for its headlice shampoo kit in Europe as a Class I Medical Device; developed a working relationship with a research scientist from the University of Bristol in the UK who later became a Board Member and Scientific Advisor for BioSafe and developed international supply contracts for exporting product to the Netherlands from 2003-2006, France 2007 to present, UK 2011-present.

Melinda Trego - Co-founder and COO, Eyetech Digital Systems. Melinda is co-founder and COO of EyeTech Digital Systems. Melinda has focused on the business operations and development of EyeTech as a worldwide supplier of eye tracking software and equipment.  Prior to founding EyeTech, Melinda received service awards for forecasting and process improvements while working in the aerospace industry. She has handled the implementation of ERP and accounting systems, developed business strategic plans, and optimized business processes to keep overhead low.  She has a knack for identifying the job to be done, and communicating how individual contributions fit into the big picture as team members. 

Barbara Barran - Founder & CEO, Classic Rug Collection Inc. Barbara designs rugs using her own experiences and imagination; many of these ideas become custom rugs for her clients. She works closely with major designers and high-profile clients to create unique rugs for each interior; 80% of Barbara’s rugs are one-of-a-kind. In addition to designing rugs for private clients around the globe, she has done major installations for the Chateau de Courtomer in France and the Presidential Suites at the Anjun Hotel in Mecca. Her work has been shown in exhibits in Dubai, Frankfurt, Paris, and NYC; more than 25 museums have shown and sold Barbara’s work. Barbara is also a member of the NYC District Export Council. During World Trade Week in May she was given the Export Achievement Award by the US Commerce Department, and she won a $25,000 Global NY grant from Empire State Development Corp., a branch of NY State that promotes exporting. Barbara is a past winner of two STEP grants supporting exporting.

 

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