EXPORTING GUIDE - PowerPoint PPT Presentation

1 / 47
About This Presentation



US Commercial Service Resources. Market Research ... Required when shipping goods valued over $2500 through the US Postal Service ... – PowerPoint PPT presentation

Number of Views:128
Avg rating:3.0/5.0
Slides: 48
Provided by: markp5


Transcript and Presenter's Notes


  • US Export Assistance Center
  • Southern Ohio District Export Council
  • Compiled by Mark P. Evans
  • August 2004

Exporting Overview
  • Market Potential
  • Company Resources
  • Marketing Plan
  • Distribution Methods
  • International Standards
  • International Legal Considerations
  • Shipping
  • Quotation
  • Pricing
  • Payment Terms
  • Customer Service

Market Potential
  • US Product Life Cycle vis a vis International
    Product Life Cycle
  • Uniqueness of your product
  • Competitive Position Outside the US
  • Ease of Substitution
  • Cultural Acceptance of your Brand/Product Name

Company Resources
  • Top Management Support
  • Relative Ease in Supporting Export Sales Activity
    by Sales, Marketing, Finance and Manufacturing
  • Will the personnel view exporting as a thorn or a
  • Management Decision Making Style Centralized or
    Decentralized and Impact Upon Negotiations

Marketing Plan
  • Select countries of interest
  • Research US export statistics of common
    commodities (NTDB)
  • Determine fastest growing markets for US
  • Assess which of your US competitors are exporting
    and where
  • Internet research for competitive local products

Marketing Plan (continued)
  • Are product modifications needed?
  • What import technical barriers exist CE mark,
    CCC, etc.
  • What price levels exist? Remember price in
    international markets is usually lower than US
    markets as price is more important than features,
    quality, service, etc. Your specific product may
    not require the lowest price if it has a distinct
    competitive advantage.

Sources of Market Information
  • US Government Export Portal www.export.gov
  • National Trade Data Bank (NTDB) www.stat-usa.gov
  • TRADESTAT www.ita.doc.gov/td/industry/otea/
  • UN Statistics Yearbook http//unstats.un.org/unsd/
  • World Fact Book www.cia.gov/cia/publications/factb

General Industry Information
  • Culturgram www.culturegrams.com/
  • Country Commercial Guides www.export.gov/OneStopCo
  • Trade Information Center www.ita.doc.gov/td/tic

US Government Resources
  • Trade Information Center (TIC) www.ita.doc.gov/td/
  • Export Assistance Center Cincinnati
  • Gold Key Service locate potential distribution
    and arrange local introductory appointments
  • Platinum Key Service long term sustained
    assistance from overseas Commercial Service posts

Distribution Methods
  • Direct Sales
  • Highly engineered products
  • OEM sales
  • Key account sales
  • Currency fluctuations do not impact sales because
    of competitive advantage
  • Few competitors or highly concentrated industry

Distribution Methods (Continued)
  • Distributor Network
  • More important to have local representation where
    engineered competitive advantage does not exist
  • Local connections sell the product when barriers
    exist to direct selling

Distribution Methods (Continued)
  • Distributor Criteria
  • Must be sales people, not order takers.
  • Must be marketing/selling to your target
    market/customer now.
  • Must possess the capital base to advertise,
    promote, hold inventory and support their
    customers credit terms.
  • Must possess the infrastructure to run the
    business and have the experience to handle all
    import administration.

Distribution Methods (Continued)
  • Joint Venture
  • Local connections very important
  • Cost disadvantage to pure export
  • Retains some marketing and price/profit control
  • Extremely difficult to maintain fair
  • Legal systems and conventions operate differently
    compared with the USA

Distribution Methods (Continued)
  • Foreign Direct Investment
  • Buy a company and the existing customers
  • Useful to buy a competitor or fend off additional
  • Allows fragmentation/differentiation of markets
    to reduce risk of attack by competitors
  • Provides greater control of market, products,
    sales and profits
  • Does not eliminate management culture issues

Distribution Methods (Continued)
  • License
  • Useful when capital and management resources are
  • Increases risk of creating a competitor as the
    licensee is out of sight and out of mind
  • May be important to include royalty and cross
    licensing provisions for any improvements

Distribution Methods 4 Criteria EMPHASIZED
  • Must have sales people, not order takers.
  • Must have access to your target market/customer
    base immediately.
  • Must possess the capital base to advertise,
    promote, hold inventory and support your
    customers credit terms.
  • Must invest in the infrastructure to run the
    business and have the experience to handle all
    import administration.

Department of Commerce US Commercial Service
  • Market Research
  • Trade Information Center (TIC) www.ita.doc.gov/td/
  • Country Commercial Guides market conditions,
    best export prospects, financing, finding
    distributors, legal and cultural issues
  • International Market Insights analyze conditions
    in specific markets
  • Industry Sector Analysis details about an
    industry to estimate market potential, market
    size and foreign competitors
  • Video Market Briefings discuss market
    conditions, regulations, key players and
  • Export Assistance Centers 111 offices throughout
    the 50 US States

Department of Commerce US Commercial Service
Resources (continued)
  • Trade Events
  • Trade Missions arrange personal meetings with
    pre-screened business partners
  • Intl Buyer Program brings foreign buyers to US
    Trade shows
  • Certified Trade Fairs place you in the best
    international trade shows with targeted matching
  • Catalog Exhibitions showcase your product and
    service and have leads sent back to you.
  • Single Company Promotions provide meeting space
    and pre-screened invitations to help you
    successfully present product or service seminars

Department of Commerce US Commercial Service
Resources (continued)
  • International Partners
  • Export Assistance Center Cincinnati
  • Platinum Key Service long term sustained
    assistance from overseas Commercial Service Posts
  • Gold Key Service arrange personal appointments
    with pre-screened business contacts at the US
    embassy of your designated country
  • BuyUSA.com matches international buyers with US
    suppliers online
  • Virtual Trade Missions let you explore promising
    markets via video conferencing
  • Intl Partner Searches deliver details on
    potential partners that have expressed interest
    in your product or service
  • Commercial News USA promotes your product or
    service to more than 40,000 international buyers
    trough a free monthly catalog

Department of Commerce US Commercial Service
Resources (continued)
  • International Partners (continued)
  • Intl Company Profiles offers low cost quick
    credit checks and due diligence reports on buyers
    and distributors
  • The Trade Opportunity Program provides daily
    trade leads from foreign buyers

Department of Commerce US Commercial Service
Resources (continued)
  • Consulting and Advocacy
  • Counseling assists in the development of an
    export strategy and obtaining financing
  • Consulting helps resolve regulatory hurdles and
    recover payment
  • Platinum Key Service provides customized,
    long-term support to achieve your business goals
  • ShowTime offers in-depth counseling at major
    trade shows from market and industry specialists
  • Multilateral Development Bank (MDB)
    representatives provide access to project
    opportunities funded by MDBs worldwide
  • Advocacy through US Diplomats and other
    officials to give you the edge.

Department of Commerce US Commercial Service
Resources (continued)
  • Where to start?
  • 1-800-USA-TRADE to find your local export
    assistance center
  • www.export.gov
  • www.buyUSA.com

International Standards
  • Product Adaptation to meet foreign government
    regulations, buyer preferences, technological
  • Engineering and Redesign
  • voltage differences 120 vac vs 230 vac 1 phase,
  • 480 vac vs 400 vac 3 phase,
  • soft metric vs hard metric dimensions
  • sae vs metric fasteners
  • Branding, Labeling and Packaging
  • are local or international brand names important
    to the customers and do you need trademark
  • does the name translate well in the foreign
  • are OSHA warning labels sufficient or do you need
    international warning labels
  • does the package need US or metric weights and

International Standards (continued)
  • Safety Standards what local or country safety
    standards are required for the product to pass
    through customs
  • United States UL label is required on electrical
    products, toys, medical devices, etc.
  • European Union CE Mark is required an any
    product which can be used as is, otherwise a
    Declaration of Incorporation (DOI) is required so
    the buyer of the product can place the CE Mark on
    the final product.
  • CE Mark is a safety analysis and documentation
    requirement (placed on the product by the
    manufacturer), unlike the UL label which is a
    performance specific regulation. The CE Mark is
    required for end use products, see the CE

International Legal Considerations
  • Export Administration Regulations
  • Small percentage of exports require a license or
    are prohibited for export to certain countries
  • First check the web site www.ustreas.gov/ofac
    which details prohibited countries based upon the
    type of product or service
  • Second, verify your product or service is not a
    dual use (military and commercial) which would
    require an export license. If the end use of the
    product is in a military or nuclear application,
    and export license is required
  • Review the restricted product list at the USDOC
    Bureau of Industry and Security

International Legal Considerations (continued)
  • Export Administration Regulations
  • Third, it is the exporters responsibility to
    ensure the product is not diverted to prohibited
    countries. Severe penalties apply
  • Fourth, Foreign corporations which are more than
    50 owned by a US company or are substantially
    directed in their daily activities by the US
    company, are subject to similar trade
    restrictions as the US parent
  • Get legal advice before allowing a foreign
    subsidiary to sell in a way that could not be
    done by a US parent

International Legal Considerations (continued)
  • Foreign Government Regulations
  • Consular Invoices
  • Certificates of Inspection
  • Health Certification
  • Certificates of Origin
  • Chamber of Commerce Verification
  • Safety Certification

International Legal Considerations (continued)
  • Customs Benefits for Exporters
  • Duty Drawback
  • NAFTA Reduced Local Import Duties Canada/Mexico
  • FTAs Reduced Local Import Duties
  • Completed Israel, Jordan, NAFTA, Chile,
  • Pending Australia, CAFTA, Morocco, Dominican
  • Foreign Sales Corporation (FSC) Exemption from
    Income Tax (Banned by WTO - to be modified by

International Legal Considerations (continued)
  • Intellectual Property Considerations
  • Patents
  • US Patents based upon first to invent
  • International patents based upon first to file
    for a patent.
  • After initial filing you have one year to file in
    Paris treaty countries
  • In US you have one year to file after disclosure
    or sale of the product
  • International patents must apply before
    disclosure or sale of the technology otherwise
    the technology becomes part of the public domain,
    or within 1 year of the US patent application

International Legal Considerations (continued)
  • Intellectual Property Considerations
  • Trademarks
  • US trademark or service mark based upon first to
    use or apply for foreign trademark/service mark
  • International trademark or service mark based
    upon first to apply
  • Some countries do not allow registration of
    service marks
  • MADRID PROTOCOL allows common application with
    individual country examinations

  • General Requirements
  • Packed so it arrives in good condition
  • Labeled correctly to ensure the goods are handled
    properly, arrive on time and at the right place
  • Documented to meet US and foreign govt
    requirements and collection standards
  • Insured against damage, loss, pilferage and delay
  • Freight Forwarders role is to supply above

Shipping (continued)
  • Packing LCL and CL
  • Pack in strong containers adequately sealed and
  • Provide proper bracing and weight distribution
  • Goods should be palletized
  • Packing material moisture resistant
  • Wooden boxes for LCL shipments properly treated
    for insects

Shipping (continued)
  • Labeling
  • Shippers Mark
  • Country of Origin
  • Weight in pounds and kilograms
  • Number of cases and dimension of cases in inches
    and centimeters
  • Special handling marks (fragile, this side up, no
  • Port of Entry
  • Labels for hazardous materials

Shipping (continued)
  • Common Documentation
  • Airfreight shipments require non-negotiable air
  • Bill of Lading contract between owner of goods
    and carrier
  • Commercial Invoice used by importing country
    customs officers (caution many customers will ask
    this value be reduced to reduce duties)
  • Consular Invoice used by customs officials in
    some countries

Shipping (continued)
  • Common Documentation (continued)
  • Certificate of Origin some countries require
    plus a stamp from the local chamber of commerce
  • NAFTA Certificate of Origin required for trade
    between the NAFTA countries if a US shipper wants
    to claim 0 duty. (Ex. US company re-sell goods
    in Canada made in Japan 6 months earlier)
  • Inspection Certification usually a third party
    inspection required by importing customer or
    government (Philippines)

Shipping (continued)
  • Common Documentation (continued)
  • Shippers Export Declaration (SED)
  • Required when shipping goods valued over 2500
    through the US Postal Service
  • Required when shipping goods valued over 2500
    under Schedule B
  • Prepared by freight forwarder and electronically
    filed with US Customs
  • Not required for exports to Canada unless export
    license required

Shipping (continued)
  • Common Documentation (continued)
  • Export License for controlled goods
  • Export Packing List is more detailed than a
    domestic packing list and requires
  • Itemizes material in each package
  • Lists individual gross and net weights in English
    and Metric
  • Shippers and buyers references
  • Insurance Certificate to assure the consignee the
    goods are insured

  • State the Seller and Buyer
  • Detail Price and Currency
  • Validity Period
  • Terms and Conditions Sheet
  • Warranty Period
  • Shipment terms per INCOTERMS 2000 (Ex-Works and
    CIF most common)
  • Ex-Works shipment schedules and estimated arrival
  • Payment Banking Details Account , Sort Code,
    Swift Code
  • Pro Forma Invoice typically required with
    quotation as a means for the customer to assure
    what they are buying

  • Market Based Pricing
  • Requires accurate survey of market prices at your
    level in the value chain
  • Cost Based Pricing
  • Requires Calculation of direct costs through the
    value chain
  • Example

Payment Terms
  • Terms must be evaluated according to company and
    country credit risk. The Asian banking crisis of
    1997 is a prime example of country risk.
  • Typical payment terms
  • Cash in advance check, telegraphic transfer or
    credit card
  • Irrevocable confirmed letter of credit at sight
    or x days after ocean bill of lading. A confirmed
    L/C is a guarantee by the exporters bank it
    will pay the exporter even if the buyers bank
    does not pay the exporters bank.

Payment Terms (continued)
  • Irrevocable confirmed letter of credit mechanics
  • Buyer opens L/C at buyers bank including
    language for documents required from exporter to
    effect payment (we recommend sending preferred
    L/C language to buyer before the L/C is opened).
  • Buyers bank sends L/C via SWIFT to the
    advising/confirming bank in exporters country.
    SWIFT requires 3 days.
  • Exporters banks sends letter of confirmation and
    L/C to exporter.
  • Exporter reviews L/C carefully as all
    instructions must be carried out to the letter
    and all documentation must be provided without
    errors, or discrepancy fees will apply and
    payment may not occur.

Payment Terms (continued)
  • Irrevocable confirmed letter of credit mechanics
  • Exporter contacts freight forwarder who schedules
    the ocean or air shipment, and prepares all
  • Once the goods are loaded, the ocean or air bill
    of lading is completed by the freight forwarder.
  • Freight forwarder then sends bill of lading,
    commercial invoice, packing list, etc. to the
    advising/confirming bank in exporters country
  • Exporters bank reviews all documents for
    discrepancies, send the documents to the buyers
    bank, who sends documents to the buyer.
  • Buyer collects the goods.
  • Exporter collects payment according to payment
    terms at sight or time draft.

Payment Terms (continued)
  • Sight Draft Mechanics
  • Ocean bill of lading endorsed by exporter
  • Exporters banks sends OBoL, sight draft, and
    other documents (packing list, commercial
    invoice, inspection certificate, insurance
    certificate) to buyers bank
  • Buyers bank notifies buyer of document arrival.
  • Buyer pays draft and buyers bank turns over
    ocean bill of lading to allow buyer to collect
    the goods.
  • Note Do not ship via air under sight draft as
    goods can be collected without an airway bill of
  • Open Account is the most risky transaction, but
    is least expensive for both sides.
  • L/C is the most expensive as banking fees are
    incurred by both the exporter and the buyer.

Customer Service
  • Perhaps the most unanticipated and most important
    factor to succeeding in the international market.
  • Customer service can be described as the manner,
    procedure and timeliness with which communication
    is conducted. Some examples
  • Send wrap up meeting notes within one business
    day of your return from abroad.
  • Meet all deadlines
  • Establish a communication policy for all
    personnel who will communicate with the customer,
    such as
  • Send an answer to all inquiries and questions
    within 24 hours.
  • If an answer is not possible within 24 hours,
    send a schedule for answering the question within
    24 hours.
  • Ensure the final answer is not delayed longer
    than 6 business days.

Customer Service (continued)
  • Why? Fast communication ensures you are easy to
    do business with, and helps ensure you become the
    preferred supplier.

Summary Global Market Cycle
  • US Export Assistance Center
  • www.buyusa.gov/greatlakes
  • Dao Le - Director
  • Phone 513-684-2944
  • Southern Ohio District Export Council
  • www.exportsouthernohio.org
  • Dao Le Executive Secretary
  • Phone 513-684-2944
Write a Comment
User Comments (0)
About PowerShow.com