Stories abound of ambitious and diligent persons that suffered huge financial losses in the course of venturing into export business. There are many factors responsible for this. The most basic of which is that many potential exporters do not adequately gauge their level of readiness for the complexities inherent in cross border trading, before entry into it. Below are eight barometer to measure your readiness for export:
1. Registrations
Company must first be registered with Corporate Affairs Commission (CAC) to have the legal identity to operate. It also has to register with Nigeria Export Promotion Council (NEPC) to obtain a valid certificate, qualifying it to Export.
2. The Market
Take time to research extensively, to know and to understand the target market. It is essential to know the export potential of your product in international markets, to identify a specific market for your product, to know how to enter the preferred market and to be sure the product will be accepted in the market in its current form.
3. Export Plan
The maxim “Failing to plan is planning to fail” applies here too. A definite and concrete export plan must be available before beginning an export transaction. Export plan include best market selection and segment, definition of your unique value proposition, selection of best distribution channels, selection of promotional instruments (websites, social media presence, brochure, catalogues, trade fairs, etc.), selection of competitive pricing mechanism, having skillful and knowledgeable human resources and obtaining promotional materials for foreign markets.
4. Export Documents and Procedures
Export requires prescribed and vital documentations and procedures before, during and after export. These include export registration documentations, export contract documentation, Quality assurance, and commercial and packing list, Export financial documents and shipping documents and procedures.
5. Logistics and Freights
It is good to understand terms of shipping (including pricing and documentations), identify the best freight options available to you, offered by freight forwarders.
6. Export Pricing
Proper and feasible pricing method must be known and adopted. Pricing must cover total cost of product and margin allowance. Costs may consist of packaging, warehousing, transportation, sourcing cost, and forwarding cost.
7. Export Financing
Pre-determine your export financing options. Understand the available government incentives, bank loans, factoring etc.
8. Legal Issues
There are legal instruments regulating Export in every country. It is important to be aware of this legal framework of your country and of the destination country of trade.
Also necessary to be acquainted with the dispute resolution and arbitration mechanism before plugging into Exporting.