| A
key success factor in any export business is clear understanding
and detail knowledge of products to be exported. Before
starting marketing effort and contacting prospective
buyers, one must be ready with a detail sourcing guide
that documents all necessary information about your
product basket. We shall identify key elements of a
sourcing plan and how to document them in this article.
Whether you are exporting first time or been in export
trade for a long time - it pays to be methodical and
systematic in your approach. Its not enough to have
all necessary data 'in your head' - but equally important
is to put everything on paper in a structured manner.
Once you have done that - it becomes easier to find
the gaps in your knowledgebase and take necessary corrective
actions.
Preparing
Product Portfolio
Once you have zeroed in to
a set of products - next step is to prepare a profile
or dossier for each selected product. The dossier should
contain all information about the product - its sourcing,
packaging, pricing, selling etc. Together, these dossiers
will comprise your product portfolio.
I have prepared a sample checklist for preparing product
dossier. Please add and subtract to arrive at your own.
- Product Name
- Availability : Where available at competitive
price
- Description : Short and snappy
- Image/photographs - Specially for handicraft/beauty
products
- Specifications - size, volume, weight,
materials
- Quality standards
- Packaging - unit pack, carton pack,
packaging materials
- Market Price
- Suppliers - names and addresses of
most suppliers
- Competitors
- Target Countries - Some Market research
required
- Various overhead costs like packaging,
labeling, transportation, logistics, port charge etc.
- Your profit margin
- Selling price (FOB and CIF)
- Minimum Order quantity
- Discount scheme for volume buyers
- Agency/distribution commission
It is strongly advised that you complete
above homework before starting your marketing effort.
Even if you are an experienced hand and know all these
well - there is no harm in putting this knowledge on a
piece of paper. You can improve a lot by introspecting
and re-writing your thoughts. Remember, God is in detail
- success of your plan depends a great deal on how much
care you take on small details.
Do not be
a Jumping Joe
I have seen many new entrants
who either completely overlooked these preparations
or planned to do so after securing first order and jumped
headlong into marketing only to suffer later. What they
do not understand is that even for negotiation - you
need detail product knowledge. If your buyer asks for
a smaller volume what will be your price ? Your negotiation
is bound to fail if your buyer does not get precise
and fast response and gets dissatisfied with your answer.
Be Nearest
to your Supplier
Success depends a great deal
on what price you can offer to your buyer. As your selling
price depends on sourcing price, try to avoid unnecessary
middlemen who only add cost but no value. By avoiding
middlemen and sourcing directly from supplier - you
not only cut transaction cost but also get greater control
over product quality and timely shipment.
Identify Competitive
Sources
One can source almost everything
from major cities like Delhi or Mumbai. However, in
most cases, these products reach cities from hinterland
through layers of middlemen, each of whom add a transaction
cost.
To be competitive - one should identify direct sources
rather than middlemen. Keep in mind geographical pockets
that have excelled in producing low cost products. For
example, if you are trading in glass beads you should
be as close to two major bead producing pockets in India
- Purdalpur, a village near Agra, Uttar Pradesh for
North India and Papanaidupet, a village in Andhra Pradesh
for South India.
We shall identify key sourcing pockets in next issue
Happy and Productive Surfing
Dr. Amit K Chatterjee
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