International Trade FAQs
- Is my product or service needed in other countries?
- Will my product or service have to be adapted for international markets?
- How should I market my product or service internationally?
- Do I need to translate my sales literature? Will I need to learn another language?
- How do I learn about differing customs which could affect my company, product, or way of doing business?
- How should I ship my product overseas?
- How can I finance my international sales?
- How can I ensure I'll get paid for my international sales?
- How long will it take to see a profit from international sales?
- What agencies, groups, or others can provide assistance to my company on the various facets of the exporting process? How much will this expertise cost?
1. Is my product or service needed in other countries?
Before you make the decision to "go international" make certain that there is a market for your product or service. State and federal trade development agencies publish trade statistics and country market reports that can help you learn more and make informed decisions. The MTO International Library has many directories and other volumes describing market trends. Many companies have entered exporting following participation in MTO export education and training courses, specifically the "Export Process" -- a half-day introductory course, and the three-day "Export Tools and Techniques" course. Both are designed for new exporters and can help you determine whether your product or service has export potential. (For additional assistance, contact the MTO.)
2. Will my product or service have to be adapted for international markets?
The factors that will determine whether you need to modify your product or service for your target markets are:
- government regulations
- non-governmental standards
- geography and climate
- cultural sensitivity
- servicing
(For additional assistance, contact the MTO.)
3. How should I market my product or service internationally?
Strategies that work in the United States probably won't work in Japan or China and may not work in Europe or Latin America without some adapting. Learn more about specific strategies by talking to experts in the countries in which you're interested.
Marketing strategies may include participation at international trade shows and advertising, direct mail and on-line promotions. A good export marketing program will have a balance of these methods. (For additional assistance, contact the MTO.)
4. Do I need to translate my sales literature? Will I need to learn another language?
If you are serious about succeeding in the market, it is strongly recommended that you translate your marketing materials into the language of the prospective buyer. You'll also want to convert all measurements from the U.S. system of measurement to the metric system , which is used by virtually every other country of the world!
Again, having someone within your company who is capable of speaking in the language of the culture in which you are doing business demonstrates commitment to the market. While it's true that much international business is conducted in English, to be truly successful you must respect your partners' culture. If necessary, hire a translator/interpreter. (For additional assistance, contact the MTO.)
The best way to learn the ins and outs of doing business in another country is to travel there to learn and to have face-to-face meetings. But first, do your homework. There is a growing body of resources available on each country's history, social and political systems, protocol and business etiquette available on-line, and from MTO export counselors and the education program, and at the Minnesota Trade Office International Library.
Many firms specialize in intercultural communications for business people, whether traveling or hosting foreign visitors. Watch the local business calendars for training opportunities. (For additional assistance, contact the MTO.)
6. How should I ship my product overseas?
A successful export program uses reliable, cost-effective transportation. Transportation of your product is an important consideration because it is a significant cost factor.
The buyer should compare competitive products on the basis of delivered cost. Your company needs to make sure the product is delivered in good condition, on time, and keep the cost in line with competitive products.
Distribution also includes cost for storage and inventory. The transportation choice, therefore, should blend the most cost-effective of these factors. (For additional assistance, contact the MTO.)
7. How can I finance my international sales?
A top concern of most new exporters is where to get help at both pre- and post-export financing stages of the export process. Pre-export financing is the financing required of the exporter which covers the period from building the product to shipping. Post-export financing refers to the financing that spans the period from shipment through receipt of payment from the overseas buyer. Government sources of export financing are:
- SBA Export Working Capital Program
- EX-IM Bank Working Capital Guarantee
(For additional assistance, contact the MTO.)
8. How can I ensure I'll get paid for my international sales?
Before making the sale, evaluate the risks -- country, currency and commercial -- of doing business in a particular market. Once you and your buyer have come to terms, there are many different methods of payment, including cash in advance, letter of credit, collection and open account, that you will need to agree upon. You should also become knowledgeable about credit insurance. Forfaiting, available to very large firms through special divisions of international banks, is a way for exporters to receive cash up front and mitigate payment risks. (For additional assistance, contact the MTO.)
9. How long will it take to see a profit from international sales?
Naturally, the time frame from when you initiate your international activity to when you make your first sale and start enjoying profits will vary greatly from firm to firm depending on your export experience and the challenges of the market. In general, expect the turnaround to be at least one to two years. (For additional assistance, contact the MTO.)
MTO counseling services are free. Its education and training programs are offered at a nominal fee for Minnesota firms. Industry trade associations also sponsor a variety of programs specific to their industries. Watch the business calendars in the local media, and this web site, to keep up with export training opportunities.
Export management companies (EMCs), of which there are many in the Twin Cities area and throughout the United States, provide services for new and experienced exporters. When selecting an EMC, evaluate the company's experience, credibility (seek references), education and general compatibility with your firm's culture and goals. (For additional assistance, contact the MTO.)