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| Year
2005 |
How
to Export - Part 3
Identifying Products for Export |
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What to export ?
What sells well in international market ? How to select
products for export ? These are questions uppermost
in the mind of every budding exporter. Let us examine
various options and a practical way of selecting a product
basket.
There are products that sell more than others in international
market and it's not very dificult to find them from
various market research tools. However, such products
will invariably have more sellers and consequently more
competition and less margin. On the other hand - a niche
product may have less competition and higher margin
- but there will be far less buyers.
A Practical
Approach in Product Selection
Fact of the matter is - all
products sell, though in varying degrees and there are
positive as well as flip sides in whatever decision
you take - popular or niche product.
So, instead of approaching the product selection process
from demand side - it is far more practical to look
at supply side. Ask yourself - what can you supply.
What are your strengths ? How close are you to supply
sources. Once you take a stock of your capabilities
- evaluate and prioritize available options.
Key Factors
in Product Selection
- The product should be manufactured
or sourced with consistent standard quality, comparable
to your competitors. ISO or equivalent certification
helps
- It should be available in sufficient
quantity. If possible, avoid products which are monopoly
of one or few suppliers. If you are the manufacturer
- make sure sufficient capacity is available in-house
or you have the wherewithal to outsource it at short
notice. Timely supply is a key success factor in export
business
- It is competitively priced. The price
should not fluctuate often - threatening profitability
of your export venture.
- Regulatory aspect of export. Check
Govt poilicy - if there is any restriction in its
export. Though there are very few restrictions in
export - it is better to check regulatory status of
your selected product. Please visit VANIK.COM
for Export Import Policy and handbook of
Procedures.
- Status of various Govt incentives -
Duty Drawback, DEPB etc. Again, please visit VANIK.COM
- Import regulation in overseas markets,
specially tariff and non-tariff barriers. Though a
major non-tariff barrier (textile quota) has been
abolished - there are still other tariff and non-tariff
barriers. If your product attracts higher duty in
target country - demand obviously falls.
- Registration/Special provision for
your products in importing country. This is specially
applicable for processed food and beverages, drugs
and chemicals.
- Seasonal vagaries of selected products.
Some products sell in Summar, others in Winter. Some
products may sell only during Christmas. Keep in mind
seasonal aspect of your product, if there is any,
and lead time required to reach target market.
- After Sales Service. If exported product
needs after-sales service, you should open service
centre beforehand or arrange distributor/agent who
can provide servicing facility. It is not advisable
to export a product that requires after sales service,
in case you lack the technical and financial ability
to provide it.
- Packaging and labeling requirements.
Keep in mind special requirements of perishable products
like processed food
- Mode of transport, logistics requirements.
Special care is required for certain products which
may be bulky or fragile or hazardous or perishable
or of some such feature
Happy and Productive Surfing
Dr. Amit K Chatterjee
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