In 2007, small businesses made up 97.3 percent of all known exporters in the U.S. and produced 30.2 percent of the known export value in 2007, according to the U.S. Small Business Administration. There are three types of export business models that can be developed through an online interface: an export management company (EMC), which identifies domestic companies and finds export destinations; an export trading company (ETC), which identifies foreign buyers and finds domestic sources willing to export; and the more flexible general export merchant, the entrepreneur with no specialized client base, industry or product line.
Things You'll Need:
- Computer
- Printer
- Fax Machine
- Phone
- Modem
- Step 1
Obtain startup funds. Depending on whether it is a home-based sole proprietorship, costs can range from $5,000 to $25,000. Most of the startup cost will go toward office equipment and furniture, as well as market research. Basic business needs will be a computer, printer, fax machine, phone and modem.
- Step 2
Price the exporter services. Unless the exporter is taking title to the merchandise, exporter services are typically commission or retainer based. The ETC either takes title to goods or works on a commission basis. EMC's can be paid by commission, salary or retainer plus commission. Commissions are typically 10 percent of product cost from the manufacturer. Retainer fees are for products that cannot be easily discounted by the manufacturer at 10 percent or are more difficult to sell and require intensive market research.
- Step 3
Find customers among artisans, craftsmen, exporters, importers, manufacturers, retailers and suppliers. Export specializations are typically by product, foreign market or both. Specializing in an area where the exporter has prior experience in a particular field will mean a higher level of comfort with the language and procedure when developing sales pitches. Prior contacts in the industry may also be sources for future clients.
- Step 4
Perform market research. This will include developing a detailed level of understanding of the product to be sold, its end user, the destination market and the trade channels. Trade channels include commission representatives, dealers, direct sales, and distributors.
- Step 5
Handle payment arrangements for the export goods. First, generate pro forma invoices that provide the foreign market importer a negotiable quote on the export merchandise. Second, secure the bank letter of credit (LC) from the buyer. The standard LC is an irrevocable promise to pay from the international trade buyer that is issued by a bank and can be redeemed from the bank once the terms of the LC have been satisfied. Satisfaction of these terms includes the exporter overseeing the labeling/marking, packaging, shipping and insurance arrangements for delivery of the merchandise. The exporter can then present the shipping documents to the bank for payment on the LC.
- Step 6
Develop a professional website as a means of advertising, marketing and promoting the export business. The marketing goal is to convince U.S. producers that they can increase profits by exporting to specific target countries. The export company's website interface must be designed to attract domestic merchandisers and foreign importers. The website should include search engine optimized (SEO) articles and/or blogs on both U.S. domestic exporting and importing U.S. goods. Google for advertisers can be used for content-focused, online advertising of the export company. This should be coupled with old-fashioned direct mail campaigns, cold calls and business-to-business networking
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