Marketing exclusively to local consumers is a great way of testing your business plan and building a brand with relatively small risk, but it also limits your company’s growth. Exporting, on the other hand, provides access to stronger economies, sturdier currencies, exponentially larger buying power, and amazing opportunities to showcase your product.
Breaking into international markets is easier said than done though. Here are your five crucial steps in starting an export venture and targeting international buyers:
Step 1. Set your objective
Simply saying “I want to export” is a vague and overwhelming goal. Rather start your export plan by identifying a specific market that is culturally, economically, politically, and demographically suited to your product. Bear in mind this may not be a mirror image of your local buyer. For example, a clothing brand which fares well amongst local women of 20-30 may appeal to a slightly older demographic in the UK.
The more specific your foreign target market is, the easier it will be to make the right decisions and execute your plan.
Step 2. Do market research
If possible, visiting customer touchpoints (retails spaces, treatment centres, etc.) relevant to your product in your proposed foreign market is an excellent way of gaining the insight you need. If a visit is not possible, look online for similar brands and offerings that fare well in that market. Who are they marketing to? What is their message? Is your product an attractive prospect amongst these competitors? What sets you apart.
Also decide on your business model. Will you be marketing yourself as a stockist to retailers, employing agents, or running your own outlet?
An online store allows you to target your client directly from a South African base, but does your product justify the added cost and time of fulfilment if your foreign client can get something similar at their local store?
You can learn more about testing your product in a new market by reading this article on identifying an international sales opportunity through market research.
Step 3. Get your product compliant
Once you’ve settled on a foreign target market, thoroughly research the regulations, labelling requirements and restrictions applicable to your product in the country of import. A lot of the information you will need is available online, but it is worth investing in legal advice if your product is edible, cosmetic, or has any safety considerations.
Legal and Customs regulations regarding imported goods are generally based on a product’s HS code. Bear in mind, although HS classifications are done according to an international system, your country of import will have its own code for your product.
Consult these tariff books (HS listings), to determine the HS code of your product in some major international markets:
Step 4. Prepare your business
Make no mistake, managing export orders, customs compliance, and international client relationships can put significant pressure on your business. The upside of this is, once the orders come in, your efforts will result in increased revenue.
The Department of Trade, Industry and Competition compiled a test you can take to confirm whether your company is up for the challenge. Click here to take the test now.
Get your business export ready with these registrations:
For manufacturers who import raw materials:
A Rebate Store to benefit from waived import tax on imported raw material for manufacturing your exports.
A Bond Store to benefit from waived import tax on imported products intended for export.
For manufacturers of excisable goods:
An Excise Storage Warehouse to benefit from waived excise tax on exported goods.
For exports into Africa:
Cross Border Permits to make use of your own vehicles for cross border deliveries.
Certificates of Conformity as required by the country of import.
For exporters and manufacturers of locally produced goods:
Trade agreement registrations to offer your clients reduced duties.
For ALL exporters:
Import Export Training by industry experts.
VAT Vendor registration to prepare your company for reaching the R1 Million turnover threshold.
Note: As long as your company is in charge of carriage, exported goods can be sold at a VAT rate of 0%. Even so, your company may claim VAT on manufacturing and running expenses according to the South African VAT Act.
Read this handy guide for more information on being a registered VAT vendor.
Step 5. Market yourself
The easiest way to reach your foreign target market is doing online advertising. Platforms like Google, Facebook and LinkedIn allow paid advertising where a geographical and industry-based audience is pre-selected and targeted to receive your ads. Determine the most popular search engines and social media platforms in your intended market and start using them to your advantage.
Unless you have significant in-house knowledge of digital marketing, it is advisable to employ an agency for this purpose. If you choose to do so, consider an agency who is based in your foreign market as they would have the best grasp of what appeals to your client.
With online marketing your website is the undisputed face of your company.
Invest in any updates necessary to make sure your website looks good, sounds good, and functions well. Consider having main sections of your site professionally translated or creating a landing page in your client’s local language and currency. Also bear in mind what your product is called in your intended market. It might not be a direct translation of what local clients use.
First world markets tend to prefer dealing with companies who look local. This is easier to achieve if you either have a .com web address, or a domain registration in your country of export, (like .co.uk or .au). If you choose to purchase a new domain, existing traffic can be directed to it, so you don’t lose out on clients who are already used to visiting your .co.za address. On the other hand, if your product can be expected to be of a high quality because it is of South African origin, a .co.za address is a benefit.
If your offering is B2B, digital marketing is only a starting point.
To secure wholesale orders you should also exhibit at international trade shows, list your product on global directories, and set up referral based partnerships. Of course, nothing beats personal contact. Identifying potential buyers and visiting their premises with samples of your product is the best way to ensure engagement and generate orders.
Bonus step 6. Assess and expand
Providing your efforts translate into well-received export orders, it is only a matter of time until you have built an established client base in your foreign market. Once the export division of your business has proven itself to be profitable, congratulate yourself and start your 5-step plan for expansion into the next foreign target market.
Contact: 0861 0 TRADE (87233), or visit the ImportExportLicense website for more information on conducting international trade.
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