Expanding to overseas markets presents a whole new set of
challenges, but the reward can be enormous.Overseas markets presents the opportunity to reach
hundreds of millions more consumers for your products or
world economies are more connected than ever.It is a lot easier now than it was 30 years ago to
conduct business in other countries.Expanding your business overseas is a wise choice.You should take advantage of this unique opportunity.
There are many areas that you need to pay attention to when
expanding your business overseas.
wish to expand your small business internationaly you must
first determine which method to use.Chose one of the following ways to expand
Exporting to an overseas market can be done in one
of two ways, Direct or Indirect.
method you find overseas buyers and ship
your products to them.You conduct Direct Exporting by using
Sales Representatives or
Distributors.Sales Representatives will work for
you on a commission basis.They will do the work of locating
buyers for your products.Distributors will will buy the
product from you and turn around and sell it
at a higher price and pocket the difference.
uses an intermediary who will perform the
task of making the export arrangements.Intermediaries can be Commissioned
Agents or Export Management Companies (EMC)
(or Export Trading Companies (ETC)).Commissioned Agents will do all of
the work for you (on a commission basis)
such as find the specific foreign buyers for
your products and let you focus on
fulfilling the orders.EMCs/ETCs do the work of conducting
market research, promoting your product,
accessing distribution channels, etc.
Another way to expand into overseas markets is to
license your product to an overseas manufacturer or
distributor who will then offer that product in an
overseas market and pay you royalties.Learn more about
Ventures is another way to expand your business
overseas.Forming a partnership with another overseas
company that will sell your products in their
markets is a way to expand into a foreign market
without taking all of the responsibilities that come
with cross-border transactions.
foreign partner will utilize their resources to get
your products into the foreign market.
Setting up production off-shore is another way to
expand the business overseas.Off-shore production can be a way to benefit
from lower labor cost and avoid costly environmental
regulations.Your products can then be sold in foreign
markets or imported back to the U.S. and sold at
Company: Buying a company in an
overseas market is an expensive way to get into the
foreign market. But, it may be the only way
allowed by government rules. The advantage is
that you gain access to a business with an existing
customer base, market share, local licensing, ties
to local manufacturing base, etc.
Piggybacking: If you are
selling products to a domestic customer that also
sells overseas you can approach them with an offer
to include your products in their overseas
offerings. By getting your products sold
overseas by someone who is already doing business
there significantly reduces your cost.
Pricing the Product:Consider the
exchange rate when you price your products in overseas
may have to make some pricing adjustments based on the
You have to consider what the best price is for your product
in the overseas markets.
Corporate Income Taxes:Profits
made overseas and returned to the united states become part
of the company’s overall taxable income on which the company
has to pay taxes.The current corporate income tax rate is 35%.Hence, if profits made overseas are returned
(repatriated) to the U.S. it will be added to the overall
income of your business and you will have to pay taxes on
rule is that taxes are paid in the countries where the
profits were generated.The percentage of taxes paid in the country in which
the profits were made are subtracted from the 35% U.S. tax
example, if you paid 10% taxes in Country A and repatriated
profits to the U.S. you will have a remaining 25% to pay to
the U.S. government.
agreements sets new rules for commerce between countries.New agreements are constantly being crated.The United States have trade agreements with specific
countries and regional agreements.Visit the U.S. Trade Representative website to learn
trade agreements.The best way to navigate trade agreements is to not
try and do it your self.Enlist the assistance of the
U.S. International Trade Administration.They offer trade counseling, market intelligence,
business matchmaking and commercial diplomacy.
if there is a dispute between you and your overseas partners
or your overseas customers?.How will you handle legal disputes?It is a burden that most small businesses can do
with partners that are based in the U.S. so that you can
address legal issues in U.S. courts.Let your overseas partners worry about legal disputes
in the overseas locations.
Salary:If you hire
workers in a foreign country you have to pay them.You have to abide by the country’s wage laws.Avoid this headache by utilizing the international
expantion method (such as Joint Venture) that shifts that
burden onto someone else.
Culture:Moving into a
new market with a different language and culture is a
is a huge learning curve to become familiar with a culture
in a short period of time.The best way to overcome this obstacle is to find a
partner who is already familiar with the culture.
and test your product name in the language of a new culture.
International Customer Base:
In order to grow the internationall customer base you need
to market internationally to reach the international
The three(3) most effective ways to reach an international
customer base are as follows:
Internet marketing is using resources on the
Internet to promote your business.These includes online advertising, website
ranking, email marketing, blogging, link exchange,
The Internet has no borders.Hundreds of millions of people from all over
the world can learn about your business with a
Social networking marketing refers to the use of
social networking media to promote your business.
Social media, encompasses many Internet-based tools
that make it easier for people to listen, interact,
engage and collaborate with each other.
These tools allow you to promote your business by
building communities based on common interest, share
videos and share your experiences.
Release is a message that goes out to Journalists
and Editors of magazines, newspapers, TV show
producers, etc. that notifies them of a potential
newsworthy story that they may want to write or talk
about on their TV shows, magazines, newspapers,
etc. A press release can reach a national as well as
an international audience.People from around the world pay attention to
what is shown on American media and their own media
increasingly covers what is happening in the United