4 Rookie Mistakes of First-Time Exporters
New to the world of exporting? Come take a look at our article for four common mistakes that inexperienced exporters tend to make that you should avoid.
When it comes to exporting, there is a lot to learn, and there is definitely a learning curve. If you are new to exporting, you are bound to make some mistakes. But Export Portal can help you avoid the big ones. Here are four common mistakes first-time exporters tend to make:
1. Not Getting Insurance
Accidents are unavoidable in any type of exporting work. A ship can sink, collide, or even catch on fire, while the goods may also be stolen or damaged. Such accidents will likely result in financial losses as well as product damage. Thus, to reduce or eliminate losses, exporters must have adequate insurance coverage for all the goods being shipped.
2. Not Knowing the Difference Between FOB and CIF
Free on Board (FOB) and Cost, Insurance, and Freight (CIF) are two terms you are going to need to know when exporting since they define where liability between buyers and sellers starts and ends. Under a CIF agreement, the seller is obliged to transport the goods to the nearest port, load them on a ship, and pay for the insurance and freight. Exporters should also charge more because they have liability for all the costs associated with transit until the goods are received by the buyer. Under a FOB contract, the seller is only responsible for the goods until the ship’s journey begins, at which point the buyer assumes responsibility.
3. Overlooking Potentially Lucrative Foreign Markets
You want to sell to markets where your products are in high demand and the business environment is favorable. But determining which markets have these qualities is not always easy. Rookie exporters tend to target traditional markets because they are a “safe bet." However, these markets are often oversaturated, and you may be missing out on significant revenue in another market. Instead of catering to a wide range of countries at once, exporters can find more success by focusing on a few specific ideal markets at a time. Just as streamlining is beneficial in other aspects of business, it is also beneficial when it comes to the selection of new markets.
4. Jumping Into a New Market With Insufficient Research
If you fail to localize your product, you could suffer. If you enter a new, foreign market without conducting extensive market research beforehand, you are likely to run into problems. Maybe foreign customers won’t accept your product as it is, or maybe you will select the wrong distribution channels. Always take plenty of time to research new markets before exporting your goods to them.
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