New U.S. - China Tariffs (May 2019)

Exeuctive Order Limits Foreign Telecom Equipment Use (May 2019)

Tariffs with Canada and Mexico Removed (May 2019)

What is Experiential Marketing and How Can it Benefit Your Small Business?

A look under the hood of profitable e-commerce websites

Do You Need a Home Office or Separate Office for your Small Business?

 States With No Corporate Income Tax Rate
South Dakota
States With No Personal Income Tax
South Dakota
States With No Corporate or Personal Income Tax Rate
South Dakota
Key Economic Indicators 
Item  Rate 
CPI: 0.1% (May 2019) 
GDP Growth:   3.1% (1st QTR 2019)
Bank Prime Interest Rate:   5.5%
Consumer Confidence:  134.1% (May 2019) 
Small Biz Confidence:  105.0% (May 2019) 
Avg Gas Price:  $2.68 













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 services.  The 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.  


Methods:  If you wish to expand your small business internationaly you must first determine which method to use.  Chose one of the following ways to expand internationally.



Exporting to an overseas market can be done in one of two ways, Direct or Indirect.


Direct Exporting:  With this method you find overseas buyers and ship your products to them.  You conduct Direct Exporting by using foreign 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. 


Indirect Exporting:  This method 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. 


Licensing:  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 Licensing.    


Joint Ventures:  Joint 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.   Your foreign partner will utilize their resources to get your products into the foreign market.


Off-Shore Production:  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 competitive rates.

Buy a 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 markets.  You may have to make some pricing adjustments based on the exchange rate.  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 it.  The general 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 rate.  For 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.


Trade Agreements:  Trade 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 about specific 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. 


Legal:  What happens 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 without.  Work 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 challenge.  It 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.  Translate and test your product name in the language of a new culture.


Grow the International Customer Base:

In order to grow the internationall customer base you need to market internationally to reach the international consumer base.  The three(3) most effective ways to reach an international customer base are as follows:


Internet:  Internet marketing is using resources on the Internet to promote your business.  These includes online advertising, website ranking, email marketing, blogging, link exchange, etc.  The Internet has no borders.  Hundreds of millions of people from all over the world can learn about your business with a click.


Social Media:  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.


Press Release:  A Press 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 States.













SBZ Home

News Home

Extra News Home





                  Report broken links               Contact us              About us           Become a Contributor to this site            Link Exchange 

© 2012-2015 The Small Business Zone, Inc.  All rights reserved.