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What is exporting and what do you need to know about it?

Colleagues use computer to start exporting packages

Entering the global market may seem like a daunting endeavor. Isn’t it hard enough already running your business in one country? However, if you are unsure how to export, you’re not alone. According to official figures, only about 5 percent of U.S. companies export. By contrast, more than 95 percent of global consumers are outside the United States, as is roughly three-quarters of global purchasing power. It’s a big world out there, and it’s essential to properly plan and prepare before expanding your business to new markets.

Watch the video below to learn what you should know to get started exporting with UPS. 

Getting into the export market

What is exporting? At a core level, exporting is a means of driving business growth. If you have a product or service that works domestically, it’s a pretty good bet it will also work in the international exports markets.

Think of it in terms of fishing. “If you’re fishing, a fisherman has two basic tools: a fishing net and a boat,” says Mitch Cohn, UPS international account manager. “Having an export business is having a bigger boat and a bigger net.”

But just like any good fishing expedition, you don’t leave harbor without preparing your vessel. This means asking the right questions: what are you looking to achieve, and why?

  1. Identify your niche: What distinguishes your product from what’s already available? How can your product bring something different to customers in another market?
  2. Review your competition: Who’s already operating overseas, and where?
  3. Know the language: Don’t assume English will suffice. “In Canada everyone thinks you can operate in English, but you have to remember there’s a huge French population as well,” Cohn says.
  4. Assess market fit: How will you market your product overseas? Selling beauty products in France is not the same as selling beauty products in mainland China.
  5. Check product adaptability: Will your product work “as is” in the target market? Exporting electrical products to Mexico is different from exporting the same product to the European Union. Will you need to make technical adaptations?

Be patient as you work through these questions. There are significant differences between national markets and much to keep in mind when figuring out your export strategy, such as export documentation, customs duties, and everything else international exporting entails. Although the logistics might feel overwhelming at first, don’t get discouraged.

Here are some important cost factors you should consider to help optimize your operations when expanding globally.

Understanding import duties and taxes

It’s important to gain an understanding of applicable import duties. These can differ widely depending on the country or region into which you are exporting and the exact products you are shipping across borders. Harmonized System (HS) codes, which comprise a global directory that spans 99 chapters covering almost every conceivable product being exported, are a critical element in helping you figure out the duty costs for your export product.

This information is not only good for your own peace of mind, but it can improve the experience of your customers: knowing the appropriate HS codes means you are aware of duty costs upfront and there should be no surprises for either you, as the shipper, or the consignee once the shipment enters customs.

Remember there are valid ways to reduce your duty costs. Find out whether the U.S. government has a free trade agreement in place with the import country or region you are considering selling into. For example, Asia is generally seen as an exporting region, but what about exporting to Asia from the United States? Ask yourself, “Where are there free trade agreements with the United States that I might be able to take advantage of?”

Also, remember to research local taxes in advance. Perhaps there are domestic tax breaks you are eligible for. Lean on resources such as Export.gov for advice on local sales taxes. Local taxes are normally applied equally, whether you are importing into the market or are a domestic player.

Export shipping

Whichever country you are exporting to, you need to get your product to its final destination safely and reliably. UPS offers a range of programs to help you ship internationally, whatever your business needs. UPS also provides a wealth of resources to facilitate the process of getting your shipment where it needs to be. Concerned about the export documentation you need to complete? UPS customs experts can help.

Get export support

When someone buys something from overseas, they are expecting you as the exporter to be the expert in international trade. Building your export knowledge takes time and support. Access the global resources of the U.S. Commercial Service, which helps U.S. businesses:

  • Meet with customers.
  • Access on-site interpreters.
  • Perform credit checks.
  • Locate distributors.
  • Identify available government bids.
  • Join overseas missions, and more.

It also offers webinars, seminars, and events to learn about international exporting. And if you need capital support, you can explore your financing options. UPS Capital  can help you access support from the U.S. Export-Import Bank. It can also lend against inventory in transit with UPS.

The world is a big place, and the export market offers significant opportunity to develop your business. Whether you are eyeing the Middle East, Malawi, or Mexico, lean on the vast trade expertise of UPS to help you cast a wider net and get your product out into the world.

Get started 

This is for informational purposes only.  It does not constitute legal advice – please consult with your own legal counsel for such advice. Also, do not rely on this information without performing your own research.

Find Out More

  • UPS Paperless Invoice

    Speed up the export process by electronically transmitting commercial invoice data to customs offices around the globe. 

    Learn more about UPS Paperless Invoice
  • Cross-Border Shipping with Confidence

    Managing imports and exports is easy with UPS technology. See how we can help reduce customs holds, keep sensitive data secure, and more.

    Learn more about Exporting Solutions
  • UPS Customs Brokerage

    Complex regulations and paperwork can leave lots of room for error, but expertise from the world's largest customs broker can help.

    Learn more about UPS Customs Brokerage
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