Why You Should Build an Export Business


Although engaging in the export trade may sounds unrealistic in times of financial slowdown, it has been the saving grace for many companies.  Many companies have learned in hindsight that exports offer many benefits in a challenging business environment.

In US, individuals, micro-businesses and the small business ventures constitute around 30% of all US exporting. The corresponding volume of the amount stands somewhere around $300 billion, annually. The Small business sector is the fastest growing of all export segments with an increase of just over 64% of the entire US export trade.

US financial gurus mention that small business ventures may do well by expanding and diversifying its market base by seriously getting engaged in trade exporting. Let us look into few factors, which provide a direct benefit from exporting.

 

Reason for Exporting

 First: Create New Markets and Sales

Exporting assists the business ventures to expand its market, as a professional outlook that will help increasing sales.

 Second:  Exporting Overstock items

Increasing market expansion will assist in lowering the production cost. For example, if a venture is capable of excess production, then its production cost is reduced as they start producing more. In other words, per unit cost will be reduced by a significant amount.

Another very important aspect of over production is maintaining your domestic Pricing Integrity.  Over production tends to deteriorate your domestic market price point. If at the end of production you find that you are having to lower the price of your product in order to clear production, you are hurting your brand/business.  This is essentially “product dumping” your own product.  Exporting your overproduction or overstock products will maintain your domestic price integrity and allow you to move you overstock at a much higher margin/yield and will increase your total profit.

Third: Second and Third World Markets for US obsolete Products

Expansion of market will also assist in increasing the product life cycle. As you may know, a highly sought after product in Africa and the Latin American region, may be nearing its obsoleteness in the US. The system may well continue to offer significant earning for a long time to come in other areas of the world.

Fourth: Exporting Out of Season Products

Controlling the seasonal production is another vital aspect of the trade exporting. As you know, the season undergoes due changes in diverse parts of the world, at different times of the year. Keeping in view the schedule, the company may need to either pace up or pace down its rate of production, as the company continues significant earning throughout the year. Positioning/exporting out of season product to the southern hemisphere will assist you in moving otherwise stale merchandise.

Fifth: Faster Growth

One of the best aspects of exporting, is experiencing faster growth and higher profits. Many global professionals point out that exporting business tend to remain more versatile and react faster to business changes and highly enterprising.

Finally, exporting will allow you to increase you customer base.  It will significantly change your paradigm by focusing on new global opportunities, meeting new people, exploration of new nations and creating new opportunities.

 

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