Exporting is a great opportunity for a company, because it lets it increase its market share while diversifying its clientele. But customs fees are an additional cost that can help put the brakes on a purchase and drive the consumer to choose a competing product. As with the domestic market, the export price policy is particularly important, as it determines the success of the products and the volume of sales.
Work With a Commission Agent or Franchisees
Going through a commission agent or franchisees to sell its products lets a company export without having to open an office abroad and incur fixed costs. On the other hand, the company’s image is conveyed by the intermediary, which is hard to control.
With a commission agent, you’re dealing with a professional who knows the local market, the trade policy is controlled, and the fees are reduced, since the agent is paid on commission.
As part of a franchise, the company ensures an outlet for its products and receives a royalty as well as a percentage on the revenue. But this type of arrangement requires a complex international legal structure, and the sales depend on the company’s reputation.
Partner with a Company Offering Complementary Products
There are contexts where unity is strength, and in terms of an entry strategy into an export market, this is particularly the case.
A partnership with a company offering complementary products or services lets you benefit from their skills, technology, expertise, and even capital to access a new market that isn’t always accessible alone. Joint marketing efforts and the sharing of distribution channels also help reduce costs significantly.
Reduce Your Transportation Costs
Controlling transportation costs is another important lever for reducing your export costs. The first thing to do is to analyze the typology of the goods, the recipients, and the delivery areas in order to optimize the organization of the transport. For example, this makes it possible to group shipments of pallets to different customers in the same area in order to fill a truck completely. It might also be worthwhile to use courier services whenever possible.
With the internet, it’s now possible, even for small businesses, to sell directly. By getting rid of the intermediaries, the margins are preserved and the product remains competitive, because the customs fees are absorbed into the overall price. This sales method requires several conditions. You must have:
- a site in several languages with a secure online payment system
- one or more people who must be assigned to the processing of the orders and customs documents, the preparation and tracking of the shipments, and customer service
This solution works primarily in B2B. It can also work in B2C, provided that the products are already known in the target market or are clearly visible on the internet thanks to SEO work.
When selling for export, you can rarely sell at the same price as in the national market, because the addition of customs duties often prevents the product from remaining competitive. One solution involves working on your costs in order to make access to export markets possible.