When companies evaluate options for growth, many medium and small business owners don't consider going international. Many business owners neglect exciting opportunities because of common misconceptions. Let’s explore some of the myths surrounding exporting products such as hot rolled steel coil and clear them.
Fact: International trade is not reserved for large corporate. In fact small companies often have greater elasticity and may be able to satisfy international partners better. Name recognition, extra resources and export departments do not make up for the drive, motivation and tenacity of a small business.
Fact: Many companies have the misconception that exporting is very expensive. But it’s not true; there are many ways for low-cost exporting. There is no need to hire new staff for export department. Many Commodity Boards and Export Promotion Councils provide information about foreign market and product at low cost or free of cost. Government offers many opportunities for business financing and loans.
Fact: Many business owners think that their prices are too high in comparison with foreign products. Price is an important factor but not the only one. Many other competitive factors like quality, after sale services and taste of consumers may supersede price. Also prices of a product may not be relatively high in countries with a strong currency, as in the European Union.
If the product is popular in domestic market it’s good but on the other hand if it is not popular still it can be exported in international market. Because unpopularity of a product in domestic market is not indicates that the product will not be accepted in foreign market.
Fact: In the business world, if your target market includes different language speakers, there are many ways to tackle that language gap. For instance, a grocer could hire a firm to make flash cards with the same message in multiple languages accompanied by images. That way, even if you don’t speak a language, you can keep them at the register or customer service desk to direct customers to the right aisle or product. In export business when companies do business with companies in other countries they will usually have someone in staff who can serve as a translator.
Fact: If your domestic market is strong it is a positive point for you. Your overseas-based competition is almost certainly looking at you and will give a global competitive advantage.
Fact: Every business contains risk either domestic or international. But proper export documentation may protect you from the risk of non-payment. First of all you have to collect all the information available online about a particular market. For the surety that you will get paid use Letters of Credit. A letter of credit (L/C) is a document from a buyer’s or importer’s bank guaranteeing that a seller or exporter will receive payment in full as long as certain delivery conditions have been met. In the event that the buyer is unable to make payment on the purchase, the bank will cover the remaining amount.
Fact: Each product does not require an export license. Export licenses are only required for items listed in the Schedule 2 of ITC (HS) Classifications of Export and Import items. Exporters simply write "NLR" for "no license required" on the Shipper’s Export Declaration.
Fact: The reverse is true. Because of this misconception, your business could lose a big opportunity of selling their products in international market. There is lots of information available on internet that helps you in exporting business. Government of India and other various agencies for e.g. Commodity Boards and Export Promotion Councils also helps exporters.
Fact: It is not true. Services are also exportable as products. Ministry of Commerce and Industry, Government of India, with a view to give proper direction, guidance and encouragement to the Services Sector, has set up an exclusive Export Promotion Council for Services in the name of Services Export Promotion Council (SEPC).