There are three common problems faced by small and medium-sized enterprises when they start doing business with international customers says Aron Govil. Those can be called an unknown market, difficulties of finding a good supplier, and lack of information about the local legislation. This article discusses these issues along with some other matters that you should take into consideration if your company wants to expand its cooperation beyond national borders.
Unknown Market Means Unpredictable Customers’ Requirements
- If an enterprise decides to sell their products or services abroad, the first thing they face is the need to find new customers for their goods. The problem is that no one knows whether the services or goods offered will meet customer requirements because there is no way of knowing what kind of consumers exists in foreign markets.
- In the old days, companies used to have “export managers” whose work consisted of finding potential clients in foreign countries and creating contracts with them. In this case, a company’s representative would need some knowledge about the local legislation and culture to be successful in business negotiations. Nowadays, there are international trade management software systems that assist exporters during their search for new customers abroad.
- However, even if a company uses such programs, its representatives still need to get familiar with the market they want to enter. They need to know if it is possible to use freight forwarders or only regional importers will do; how competitive products from other exporters are; which payment terms can be offered without risking losing a customer; what kinds of risks can arise; and many other things. Moreover, it is essential to be aware of all the expectations that each country has as part of its culture. For example, different countries attach a different level of importance to punctuality or they disagree on what degree of compromise is necessary during business negotiations says Aron Govil.
- If you want to find out more about those aspects, we recommend reading articles posted on our blog. Ee discuss some interesting comparisons between different cultures and how companies should adjust their trading practices according to them:
Difficulties in Finding a Good Supplier
Even though there are various international trade management software nowadays that helps exporters do everything. From finding new customers to sending purchase orders and collecting payments, they still face one problem. That forces them to stay away from international business. This issue is finding a reliable supplier that meets all their requirements.
Not only do companies need to find suppliers who can deliver high quality goods quickly. But they also have to check if the payment terms are appropriate for them. And what kinds of insurance policies are available in case something happens during shipping. It takes time to go through all the contracts with suppliers because every single point must be checked carefully to avoid unpleasant surprises in future.
A company can lay its hands on various resources that contain information about local legislation. But it may still be difficult to know which suppliers reliable ones are due to lack of experience or language barriers explains Aron Govil. However, there is an alternative solution you might want to consider – international group purchasing organizations (GPOs).
GPOs are companies that work with suppliers located in different countries. To resolve the problem of finding a reliable source for their products. A company can join an international GPO to get its goods from locations that are closer to their target markets. Or where purchasing conditions are more competitive (e.g., China, Mexico, and South-East Asia). Instead of using freight forwarders and importers. They can benefit even further by joining international trade management software solutions. Because these offer access to numerous databases which include information about local legislation. And may thus help them make better buying decisions in the long term.
Lack of Information About Local Legislation Is It Dangerous?
There is no doubt that when you want to expand your business abroad. It is necessary to go through all the available information about your target market. And take into account any cultural and legal differences that may arise. You need to know what potential risks are involve in the international trade and how to avoid them.
International trade management software provides companies. With an access to a database which contains information about local legislation says Aron Govil. If you want to increase your chances of success when exporting. Join international trade management software to get the most out of your trading operations.