Laurel J. Delaney
Exporting
The Definitive Guide to Selling Abroad Profitably
2nd ed.
Laurel J. Delaney
Ste LL, Chicago, Illinois, USA
Any source code or other supplementary materials referenced by the author in this text is available to readers at www.apress.com . For detailed information about how to locate your book’s source code, go to www.apress.com/source-code/ .
ISBN 978-1-4842-2192-1
e-ISBN 978-1-4842-2193-8
DOI 10.1007/978-1-4842-2193-8
Library of Congress Control Number: 2016953347
© Laurel J. Delaney 2016
Exporting: The Definitive Guide to Selling Abroad Profitably, Second Edition
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To the center and sunshine of my life, Bob.
To my other loves, Stan, Margaret, Terry, Keith, the Marovich family, aunts and uncles, cousins, nieces and nephews, and precious friends. To all the other remarkable people in my life, whether named or unnamed in this book, all of whom I respect and appreciate. To all entrepreneurs and small business owners who are building enduring export enterprises that contribute to making our world a better place.
In loving memory of Lynn Kavanagh. A sister like no other.
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Notes
“Remarks by Ambassador Michael Froman to the National Foreign Trade Council Upon Receiving the World Trade Award,” Office of the United States trade Representative, October 15, 2015, https://ustr.gov/about-us/policy-offices/press-office/speechestranscripts/2015/october/remarks-ambassador-michael .
“Internet Users in the World by Regions,” Internet World Stats, June 2016, http://www.internetworldstats.com/stats.htm .
“Advocacy Welcomes Its Seventh Chief Council,” The Small Business Advocate, January 2016, https://www.sba.gov/sites/default/files/Jan_2016_newsletter.pdf .
“The State of World Trade 2014: The Outlook for American Jobs, Economic Growth, and Global Leadership,” U.S. Chamber of Commerce, May 16, 2014, https://www.uschamber.com/speech/state-world-trade-2014-outlook-american-jobs-economic-growth-and-global-leadership .
U.S. Census Bureau News, http://www.census.gov/foreign-trade/Press-Release/edb/2014/2014prelimprofile.pdf .
Ibid.
Commerce.gov, U.S. Exports Hit Record High for the Fifth Straight Year, Department of Commerce; https://www.commerce.gov/news/blog/2015/02/us-exports-hit-record-high-fifth-straight-year .
Ibid.
Ibid.
Ibid.
The Facts About EXIM Bank, Exim.gov; http://www.exim.gov/about/facts-about-ex-im-bank .
Export-Import Bank Chairman Fred Hochberg happy U.S. exporters can use agency to finance sales overseas, The Business Journals; http://www.bizjournals.com/bizjournals/washingtonbureau/2015/12/fred-hochberg-eager-to-let-world-know-export.html .
Author Note
Dear Readers, Friends, and Export Enthusiasts,
Welcome to the revised and expanded edition of Exporting: The Definitive Guide to Selling Abroad Profitably.
Exporting is the most dynamic force in producing a healthier business, and a more exciting one. It holds the promise of growth based on the individual business owner’s initiation, making possibilities virtually unlimited. To become truly competitive, one must create the conditions for superior results and have a strong global presence in our interconnected world.
Whether you are already an exporter or just setting sail on an export adventure, the wealth of information, ideas, insights, and practical advice in this book will enable you to become successful in the export marketplace.
What’s new and augmented in this edition?
Data and citation updates.
Updates on actual and prospective trade agreements (especially TPP and TTIP developments).
New CFR and EAR rules, and export controls.
A sample job description for an export manager.
New contributions and updates on specialist interviewees in Chapter 30 .
Substantive enhancements adapted from articles that I have written in the past several years.
Updated and augmented hyperlinks with new sites that have appeared since the book’s initial publication.
New export success tips in Chapter 31 .
As you delve in, you will see that each chapter represents what could be a standalone book. With that in mind, use each chapter as a springboard to further research on your own to grow your business.
Keep growing, exporting, evolving, and thriving. Share what you’ve learned. Make the world a better place within your company and your industry, and for your employees and family.
You may be small today, but through exports, you can grow faster, grow stronger, and soar globally to be large tomorrow. Achieving export greatness requires you envision your overseas market through the lens of alternative future possibilities.
I hope this book inspires you to reach outside your comfort zone and take on the exciting world of exporting. Strive to be creative. Be fearless. And have fun.
The world awaits.
Happy exporting,
Laurel Delaney
P.S. To keep up to date on export news, trends, and resources, visit Exporting Guide ( www.exportingguide.com ) and join our LinkedIn Exporting Guide Group MOOD ( www.linkedin.com/groups/6518842 ).
Introduction
Globalization is a reality that isn’t going away. That means we’re all in this together, and we’re going to have to fight for what we want and need .
—Michael Froman, United States Trade Representative, Executive Office of the President (2015) i
Welcome to the second edition of this book. There are more than seven billion potential customers in the world, and 3.4 billion of them are online. ii How many of those customers is your company reaching? In a world that is now hyperconnected by the Internet, being a successful businessperson means no longer confining your business by borders—whether those of the city, state, or country. Exporting—or sending goods and services out of a country—increases a company’s sales and profits, enhances its prestige, creates jobs, and offers a valuable way to level seasonal fluctuations. Exporting is also a powerful force that contributes to economic growth, development, and prosperity in our world.
The explosion of US entrepreneurs and small businesses—more than twenty-eight million combined iii —engaging in the world economy in the last few years is largely attributable to the Internet. This transition has taken place as businesses have sought new ways to grow and tap into the more than 95 percent of the world’s consumers and 80 percent of the world’s purchasing power that lie outside the United States. iv Surprisingly, though, less than 1 percent of these businesses and individuals operate in the US export marketplace, even though the number of exporters has grown faster than the number of nonexporters in terms of both goods sold and employment. Converting nonexporters to exporters is what this book is all about.
Tip
Start planning to sell abroad. The businesses of exporters grow faster, they employ more people, and their employees earn more than the businesses of nonexporters.
What This Book Can Do for You
Exporting: The Definitive Guide to Selling Abroad Profitably equips you with the knowledge you need to export and helps you create the enthusiasm to succeed, leading to greater revenues and profitability for your business. Exporting puts you in the driver’s seat, so you can sell more everywhere, get on the world stage, and grow. Other benefits to exporting include:
Improving your return on investments
Creating jobs
Overcoming low growth in your home market
Outmaneuvering competitors
Providing a competitive advantage
Becoming more productive
Spurring innovation
Developing a diversification strategy
Surviving a domestic recession
Spreading R&D costs across larger markets
Generating economies of scale in production
Exploring previously untapped markets
Making productive use of excess domestic capacity
Extending the product life cycle
Insulating your seasonal domestic sales by allowing you to find new foreign markets
Broadening your personal intellectual horizons
Enriching your country
Traveling to new countries
The Current State of Exporting
Export-driven entrepreneurs and small businesses play a significant role in the overall economic growth and prosperity of the United States and the world at large. They have the potential to improve productivity, achieve greater efficiencies, enhance world-class competitiveness, and create jobs. This is possible because:
Exporting lends itself to small business. More than 301,923 US companies exported goods in 2014 (latest available data). Small- and medium-sized enterprises (SMEs)—those with fewer than five hundred employees—accounted for 98 percent of all identified exporters in 2014. v
Exports generate revenue. The known export revenue of small- and medium-sized enterprises in the United States rose to $479,376 billion in 2014 (latest available data), up 2.7 percent from 2013. SMEs were responsible for 34 percent of goods exports in 2014. vi
Exports are growing. US exports of goods and services reached $2.35 trillion in 2014, hitting a record high for the fifth straight year. vii Service exports alone were at a record level of $710.3 billion. viii Goods export to the 20 economies that have trade agreements with the United States reached a record $765.1 billion—an increase of 4.3 percent from 2013. ix
Exporting helps you find new customers and develop new markets. The International Monetary Fund ( www.imf.org ) forecasts that nearly 87 percent of the world economic growth during the next five years will take place outside of the United States.
Exporting supports jobs. American jobs supported by total exports were 11.3 million in 2014 and contributed one-third of the United States’ annual growth between 2009 and 2013. x
Exporting using the Internet offers a new sales channel. Thanks to the Web, entrepreneurs and small business owners have a potent new way of doing business—one that leverages e-commerce, social media, and networking to find new business, no matter from where it comes. The Internet has become the ultimate platform by which businesses can innovate through personalization and export around the world.
Exporting is not a choice; it is an imperative. An export-or-die mentality is required by those individuals and business owners who don’t want to be beaten by their competitors—both local and global—in the world marketplace. More so, those who don’t export will become obsolete in a world where global connectivity is increasingly prevalent and easy.
The Future of Exporting
Exporting intends to help US companies become more competitive internationally through exporting and to bring thousands of new businesses into the world marketplace. As already mentioned, small- and medium-sized companies account for almost 98 percent of US exporters, but they represent only about 34 percent of the total export value of US goods. With 80 percent of global demand now outside of the United States, it is expected there will be $40 to $50 billion worth of export opportunity for the United States within five years. At the Export-Import Bank in 2015, for example, nearly 90 percent of transactions—more than 2,330—directly supported American small businesses. xi . Under new legislation, in 2016, small businesses must account for 25 percent of Ex-Im Bank’s financing dollars, up from a current mandate of 20 percent. xii Exporting is not just an option; it’s an absolute must for building and sustaining a successful future.
What will your business look like in a decade? Our world is in constant motion and growth. Whether researching, buying, or selling, can you imagine operating anything these days without crossing borders and riding the next wave of profitable growth? Don’t be scared if your answer is “Yes.” By the time you finish this book, you will be exporting successfully and be able to adapt so that you can succeed in untapped markets. Until then, don’t let fear immobilize you. Keep reading.
Remember
Exporting isn’t rocket science. You can do it. And your bottom line will soon show the results of your efforts.
Who This Book Is For
Exporting is for entrepreneurs and small business owners who are new to the practice and are ready to take their business to the next level of growth. It is for entrepreneurs and small business owners who currently export but are looking for new market insights and have a desire to expand into other countries. It is also for people who never expect to export, yet do, and become accidental exporters—individuals who export out of surprise rather than a business imperative.
Exporting will help you:
Develop a clear strategy on how to export
Find the right people for your enterprise
Export your product or service efficiently and profitably
Find customers, enter new markets, get paid, and ship
Discover your best territory through statistics and market research
Develop pricing and prepare documentation
Take advantage of trade agreements
Leverage the Internet—especially through tablets and mobile phones—to boost your online exports
Learn from others who have exported successfully
How to Use This Book
Exporting has been created and structured to make it as easy as possible to export. The book’s eight sections work together to achieve that goal by providing the following descriptions of the process:
Part I: Building Your Foundations for Exporting looks at whether you are ready to export; shows you how to write an export business plan that takes into consideration the positive impact of free trade agreements; explains how to prepare for exporting by describing the corporate, legal, and financial considerations; and describes how to manage the human side of your enterprise.
Part II: Creating and Using Online Platforms covers online fundamentals; shows how to create a social-networking and media presence; and demonstrates how to use e-commerce platforms (eBay, Alibaba, and Etsy) to export and sell globally.
Part III: Mapping Out Your Export Journey examines how to find a product and manufacturer for export, to draft an export-supplier agreement, to research an export market, to prepare a product or service for export, and to translate web and marketing material for a global audience.
Part IV: Developing Sales and Distribution Capabilities offers creative ways to find cross-border customers and describes several different methods of exporting.
Part V: Managing the Transaction explores transport options, pricing considerations, payment methods, cargo details, and documentation.
Part VI: Keep Building Your Business suggests ways to provide exceptional export service and analyze cross-border alliances and partnerships.
Part VII: The Export Journey delves into the importance of cross-cultural learning; suggests the rules of the export world for ethical conduct; offers a checklist of international-business travel tips; shows the impact of the operation of woman business owners in our new brave world; outlines the implications of big emerging markets for growing a small business; and lastly, describes the top ten emerging export business markets.
Part VIII: Export Mastery provides real-world experiences as told by successful export-business owners; offers sixteen essential keys to export success; and finally, introduces you to a MOOD—a massive open online dialogue—in the form of a LinkedIn Exporting Guide Group (MOOD). It will help keep you focused on exporting success.
Each chapter is written as a stand-alone topic with the intent that most people, especially busy executives, do not have time to read a book from cover to cover in one sitting. You can select a section that speaks immediately to your needs, delve into it, and find what you are looking for. Explore it at your convenience and come back to it as a reference source. A few sections in the book do warrant a reading before you get to the other chapters, such as Chapter 1 , covering whether you are ready to export, but reading it is not a prerequisite for success in exporting. Learning and growing by way of exports should take place on your own terms. Exporting is merely a facilitator that will enable you to perform better in the world marketplace.
First things first: You need to be ready to take on the world, because the future of exporting lies in your hands (and, as you will read in this book, in your pocket). As you turn the page to Chapter 1 , you are opening the gateway to selling globally. Let’s export!
Acknowledgments
Any book project involves more people than just the author, because writing and publishing a book is not a solitary effort. My list of people to acknowledge starts with the very accomplished Apress team: Robert Hutchinson, Acquisition Editor; Rita Fernando Kim, Coordinating Editor wizard; and the mighty Matthew Moodie, Senior Development Editor and copyedit king. Without Robert’s encouragement and direction, there would be no Exporting book 2 nd edition, and without the exceptional talents of Rita and Matt, it would not be nearly as great.
To Roy Paulson, Drew Greenblatt, Philip Pittsford, and Alison Larson for your insightful contributions. To Douglas Clark, Melissa Gillespie, Moji Eagan, and Becky Schilling for your special assistance.
I owe a special debt of gratitude to Brandon Reed, Special Advisor to Strategic Council, The Good to Great Project LLC, Office of Jim Collins for his patience in working with me to have Jim Collins endorse my book; and to Jim Collins, author of Good to Great and co-author of Beyond Entrepreneurship , for reading my book and endorsing it. You are both an inspiration to me.
To my family and dear friends for having to put up again with my disappearing act to update this book in my spare time in 2016. I look forward to seeing you at lunches and special occasions again. To Syd and Mellie, my precious cats, for their constant rollovers on their backs to give a flash of their bellies, which brought a smile to my face. To Bob Marovich, my husband, for his patience, support, and unconditional love throughout our life journey.
Finally, to you, dear reader: I am grateful for your desire to export. It is people like you who make the world of business far more exciting and a better place to hang out.
Rest assured that if you are not mentioned by name here and should be, the next time I connect with you online ( https://www.linkedin.com/groups/6518842 ) or see you in person, I will thank you.
Contents
- Part 1: Building Your Foundations for Exporting
- Part II: Creating and Using Online Marketing Platforms
- Chapter 5: Online Fundamentals
- Chapter 6: Creating a Social Media and Networking Presence
- Chapter 7: Using e-Commerce and Social Media Sites as Stepping Stones to Export Success
- Chapter 8: The e-Commerce Connectivity Craze
- Chapter 9: The Mobile World at Work
- Chapter 10: Marketing Your Business Worldwide
- Part III: Mapping Out Your Export Journey
- Part IV: Developing Sales and Distribution Capabilities
- Part V: Managing the Transaction
- Part VI: Keep Building Your Business
- Part VII: The Export Journey
- Part VIII: Export Mastery
- Index
About the Author
Laurel J. Delaney is founder and president of Chicago-based GlobeTrade.com, a management consulting company that helps entrepreneurs and small businesses go global. The United States Small Business Administration has recognized Ms. Delaney as a world-renowned global small business expert by naming her the Illinois Exporter of the Year. She is the author of Start and Run a Profitable Exporting Business and Exporting Essentials as well as numerous articles that have appeared in international and scholarly publications such as The Wall Street Journal and The Conference Board . She is the creator of The Global Small Business Blog ( www.globalsmallbusinessblog.com ), which is ranked No. 1 in the world for entrepreneurs and small businesses interested in going global; President of Women Entrepreneurs GROW Global ( www.WomenEntrepreneursGROWGlobal.org ); director of the Global Small Business Forum ( www.globalsmallbusinessforum.com ); and publisher of the Exporting Guide ( www.exportingguide.com ). She serves as the About.com Import & Export expert ( http://importexport.about.com/ ), is a charter member and a board member by appointment of the World Entrepreneurship Forum, and is a member of the International Council for Small Business. She also serves as the Chicago Chapter Chair for the Women Presidents’ Organization. Ms. Delaney’s passion for going global goes back to 1985, when she first started her business. Since then, she has devoted more than 60,000 hours of work in the area—from consulting to writing to teaching.
Ms. Delaney holds a Bachelor of Arts degree in Advertising from Columbia College Chicago and a Master in Business Administration from Lake Forest Graduate School of Management.