Selling products or services to a part of the world beyond your country is commonly known as export. It’s possible to find customers in 195 countries, but interacting with each one is a unique experience. Some nations are simpler to handle if your country has an inter-governmental trade deal with them. The trading interaction among countries is made easy by such accords. Mutual understanding incentives particularly favored consideration for exporters from allied nations, and domestic exemptions from non-tariff barriers are all benefits of international treaties.
According to India’s Ministry of Commerce and Industry’s website, the country has 53 partnership agreements with other countries. These treaties give us access to a huge number of countries with which we can do business. As an exporter, there seem to be many aspects to consider when deciding where to sell your product. Which nations or areas are interested in your product lines? What is the geopolitical situation like in your marketplace?
Product
Choosing an export market is the most important factor. Consider the need for your goods while choosing a marketplace. The goods must meet the needs and demands of the customers. According to the Trading economics report, our top export destination is the United States, which bought 45 to 50 percent of our total 2017 exports, which included gold and gemstones, pharmaceuticals, electronics, clothing, and fisheries. The United States is therefore an attractive market for fish exporters (the value of which was $1.7 billion in 2017).
The State of the Market
The export market in a particular country may appear to be enormous but dig deeper. Is any recent growth in the market? Consider looking at a country with a smaller, but rapidly expanding, marketplace as an instance. The first market would be largely determined by custom, but in reality, the performance of the second market is superior and more promising for the upcoming years. As a result, the second market would be a superior option. Keep in mind that potential market behavior is essential when evaluating alternatives.
Insist on Clarity
If you know that the local producers are unable to fulfill the needs or have zero production in the country, you can be confident that your product will be in high demand in that marketplace. It is essential to your export business’s long-term viability and growth that you have a clear understanding of the needs for your goods and services.
Trade Restrictions
You must think about the obstacles you’ll have to face to set foot in a particular industry. Trade and export limitations, operating rules, government rules, increased specifications, logistics challenges, and even unexpected bans are all examples of barriers to trade and commerce. To make international trade simpler, countries might agree to implement measures like mutual infrastructure development and regulatory relaxations via intergovernmental accords. A country’s openness to international trade is a significant issue for an exporter, especially in light of the contemporary international geopolitical atmosphere of trade restrictions.
Revenue concerning other factors
Other than the price per unit sold, a product’s profitability is determined by its volume of sales and its miscellaneous costs. Take into account the amount people are willing to pay and the demand for your product when selling your good or service to an overseas market. This will give you a better idea of what product you can sell to a specific market and at what price, as well as how much money you can expect to make from that market. Profitability can also be affected by factors such as transportation costs or taxes that are beyond your control.
The political and economic climate
Consider the country’s laws and standards on human health and the environment, as well as industrial rules, before entering into a business relationship with it. A country’s export company might be harmed over time by unpredictable political situations, perplexing beliefs, and economic strain.
Competition
Existing companies in the market are likely to sell the same product, as are new domestic providers that are working to produce an export product. Oversupply of the market can harm your market share and profitability if there are too many rivals. In addition, you end up losing the advantage of being the first to market. As a result, knowing your competitors’ market share and global reach is significant if you want to make an accurate assessment of your competition.
Perks
To alleviate internal shortages, the country’s government may offer incentives to welcome shipments of specific goods. The Merchandise Exports from India Scheme also offers promotional schemes on specific items and services to encourage exports to specific countries. In the right hands, this might be a huge benefit.
Affordability vs. Convenience
For a variety of reasons, exporting to a nearby market makes more sense, especially the fact that it’s easy to get products there. Exporters may find it advantageous to target a far-off market with higher potential than a closer one. Due to cultural similarity and proximity, exporting to Bangladesh and Pakistan may be simple for Indian exporters, but despite being a long way away, the huge amount and opportunity of the Chinese market makes it an even more enticing option. When settling on a market, keep in mind the relative importance of prospect and proximity in terms of product and business goals.
The number of exports you end up making and the resulting revenue you can expect are directly correlated. Rational thinking would imply that hefty traditional advanced economies like the US or Europe will be smart choices for startup exporters; but, there could be more profitable rewards in hand in marginally less and still risky areas. Before making a decision, do your homework completely, and don’t walk away if the market gets unfriendly.
Conclusion
Concluding a marketplace necessitates in-depth investigation and correct data. Strive to have as much relevant data as possible from reliable sources. A good rule of thumb is to create a brief of potential solutions and then weigh the pros and cons of each one before drawing any conclusions, also take help from DGFT Consultants. Examine and settle the supply chain before deciding to enter the marketplace. When conclusion the marketplace, nor its quantity or profit should be seen in a vacuum from one another.
