Establishing and servicing a local market is a critical first step in the success of any business. But what if you could exponentially expand your market to include destinations around the globe?
International trade is an established business development strategy that can boost revenue by uncovering new customers – as well as reducing risk by spreading it among many economies. It's also an easy way your business can take full advantage of the increasingly democratized world of online buyers and make your products available, with 95 percent of consumers located outside the United States.
Opening your doors to global trade may seem an imposing undertaking, but there's also a lot of support and resources available to you. If you're on the lookout for new growth opportunities, here are five ways international trade could help you increase revenue.
The benefits of international trade include attracting a bigger audience for your products and services, plus more collaboration and opportunities with unique vendors. In many cases, you may even have the first-to-market advantage, such as telecommunications suppliers in Africa. These suppliers made an early entry into Nigeria and expanded a market of nominal subscribers to 63 million subscribers over the course of eight years.
This advantage works for vendors, too. Consider the startup story of Paka Apparel, founded by a college student who started an export company selling alpaca sweaters from Peru. His idea generated so much buzz that he was able to raise more than $127,000 in his first week through the crowdfunding site Kickstarter.
Seasonal demand pressures many small businesses to ride out low-income periods. Expanding your business may allow you to target areas that will help balance out low-volume months in one location with high-volume months in another.
One example is HVAC controls manufacturers. Some components require replacement in summer, and some in winter. Selling in both hemispheres helps insulate these companies from single-market (that is, single-hemisphere) fluctuations and limits dips in revenue.
Worried about crossing borders to chase seasonal demand? UPS technology® simplifies international shipping so you can easily manage imports and exports.
UPS also provides a database of import and export regulations by country. You can learn about import and export documentation, clearance, billing options, exceptions and more.
When you spread income generation among several different markets, you become less reliant on any one economy's health. You can also use smaller markets as test beds for new products, services and marketing strategies that you can revise or replicate as needed before launching in your major market. Furthermore, regional issues that affect trade, such as natural disasters, new legislation and tax increases may have less overall impact on your business.
International trade can benefit companies not only by opening doors to new customers and partners, but also by providing additional stability; a study from the Institute for International Economics showed that companies that export are nearly 8.5 percent less likely to go out of business than companies that don't.
Furthermore, the U.S. Small Business Association reports that out of 30 million American companies, less than 1 percent presently export; even then, a 58-percent majority export to only one country. If your company isn't one of the 1-percenters, you could be missing out on a vast untapped market that is ripe for new entrants.
You can't step out of your comfort zone and expect to know the ropes from the start. Embracing international trade levels up your business both in terms of the customers and partners you're in touch with and the expert support you need to make strategic decisions. Choosing your partners carefully can help you to learn new things you can apply right away to your international trade activities.
Global trade isn't for everyone. Many small business owners are more comfortable operating in their own geographical backyard. But small business owners who know they aren't achieving their potential and want to experience exponential growth may find that international trade is just the opportunity they've been waiting for.
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