If your company is in the export business then choosing the right export market is crucial. You don’t want to waste valuable resources in an oversea market that won’t guarantee returns due to competition, cultural differences, and currency hurdles. That’s why proper research is a must.
You want to first identify the countries where your products and services will respond the most. Take five potential markets and conduct more intimate research. If you don’t know where to start then consider the following steps for an in-depth study of your market:
First Look at Economic Indicators – Target Demand
You want to know if the demand for your product is going to increase in the following years. The best way to do this is to rank your intended targets according to how much they import your niche of products from the US. Convert the currencies in US Dollars to make it easier to rank.
You’ll immediately see how much a country spends to bring in a certain product per year.
Afterwards, rank each foreign market according to total demand for the past three years. This is equal to their import of a product plus their total domestic production.
By combining the two data you will see market growth, market size, share of the US market (through import rates), and whether or not the demand is going up or going down.
If the demand is going up then it is very likely that your business will do well. If not then it’s time to consider a different market.
Check if You Can Compete with the Local Market
Since you are exporting you can expect several factors to affect your products’ prices such tariff rates, quotas, and custom requirements. If the trade barriers are too excessive then it might be difficult to export your goods to the market.
This is crucial to study because you want to know how much you can sell your products after all the taxes, alterations, additions, and subsidies you can get. Compare your final price to the price offered by your competitors.
You also need to study if the competitors have already eaten up the market place. If it is too tight and they have already dominated the market then check if you can find strength in a smaller niche.
Stick to Fewer Foreign Markets
Researching for exporting is difficult and it takes a lot of resources to get it right. If you are new to international trade then the best goal is to keep it low. One to three foreign markets simultaneously being juggled is a good starting point.
Allow your company to build its reputation in these three markets before you branch and add the list of markets you cater to.
For seeking the oversea buyers, you may consider world importers & buyers directory as your export marketing tool .