What to export? Where to export? These are some questions which come in mind of a person who want to export. Selection of right product for export is key factor for success in export business. It is very important to detect both the demand and supply of the selected product. One should also keep an eye on various government policies which are related to export.
Companies either new exporter or existing exporter it is essential for both to be methodical and systematic in selection of export product. It’s good to consider all the necessary data you have in your mind but simultaneously it’s essential to place everything on paper in a structured method. After that you are able to take required curative actions.
There are different types of products in the market. Some of them may have high demand in domestic market but not in international market and vice-a-versa. We can find them by different market research tools. Products which are high in demand have more sellers but more competition and fewer margins. On the other side if we go with niche product, it may have high margin and less competition but have fewer buyers.
Now we know that all the products either popular or niche sells in market but in different volume. Both the products have positive and negative side. But you have to consider some factors in product selection which are following:-
Important Factors in Product Selection
Quality of Product – The exported product must be of standard quality in comparison to your competitors. ISO certification ensure that products and services are safe, reliable and of good quality. They help companies to access new markets.
Price of Product – Frequent fluctuations in price of exported product is not good for the export business.
Political Environment Environment – Consider the following factor related to political environment:-
Government policies related to selected product for export.
Consider the different government incentive schemes and tax exemption like duty drawback and duty free import of raw material.
Stability of political system.
Government attitude towards import. Import regulation in overseas markets like tariff and non-tariff barriers. If the selected products have higher duty in potential market then demand will reduce.
Registration of Product – Some products like processed food and beverages, drugs and chemicals required registration in importing country.
Seasonal Demand – Climate and Weather affect the business. Demand of some products is depend on season. Some products have high demand in winter but not in summer. Festive season is also affecting the business.
Packaging and Labeling – Some special products and perishable products like processed food and dairy products required special packaging and labeling.
Mode of transport - Certain products like bulky or fragile or hazardous or perishable required special care in selection of mode of transport.