Last updated on August 26th, 2022 at 02:58 pm
The movement of products across the border isn’t the same as inter-state trade. The seller can personally deliver an order from Ibadan to Lagos where his customers are based, it isn’t like that in international trade. Because of this, an exporter has to understand the export market before diving in.
Risk is inevitable in any business, yet you need a thorough assessment of the market to minimise your loss, maximise profit, and reduce damage among others.
What is Export Market?
The export market is the process of selling products whether raw materials or finished goods to foreign buyers.
You can’t wake up in the middle of the night and start exporting pork to Saudi Arabia. You need to ask yourself: Does Saudi’s law, cultural and religious behaviour allow the importation of pork? You need to plan and strategise to operate a successful exportation business.
You must know the following to become a successful non-oil exporter in the international market:
Quality Of The Product
You might have tried your best to make sure that the product to be exported is of quality. But your effort might be below the prescribed quality of product of the receiving country.
For instance, if you’re exporting to countries like the United States, the United Kingdom, you need to have enough information about the agencies that monitor the quality of products that come into their country. What are the requirements?
Here is the point:
If your products do not meet the standard required by the destination country and you decide to export because you already sent a manipulated video to your prospective seller, your products would be rejected because they have the technology to test and know the quality of the things they consume. Make sure that your products are not being infected.
You can’t dive into exporting business without due diligence or without market research.
To export non-oil products like agricultural products from Nigeria to another country, you need to carry out a market survey.
The internet is your friend where you can gain insight into demand, spending, and consumption statistics to guide
For instance, you would get more buyers for your cocoa in countries where the consumption of chocolates is high.
Don’t export the wrong product to a country where demand is low or extremely poor. For instance, get data about the highest importer of sesame seeds (if you’re a sesame farmer or supplier).
With a few searches we did, China, Japan, India, South Korea, and Israel are the highest importers of sesame between 2013 to 2020, an import stats by tridge.com says.
Export business is driven by data, not just because of your interest and passion.
What is the cultural behaviour of the country you’re planning to export your products to? For instance, it’ll be unwise to even think of searching for pork buyers in Saudi Arabia or planning to target pork consumers in an Islamic country guided by Sharia principles and laws.
Many of the Islamic countries ban the importation of pork into their country because it’s against their religious beliefs
Identify Your Most Promising Market
The import value of sesame seeds in Greece for the year 2020 was $51.76M, Germany had $78.78M, in the United States, it was $80.29M; it was $111.49M in South Korea.
What does this mean?
From the aforementioned stats, South Korea should be your number one promising market followed by the United States and Germany and finally Greece in that order.
If there are more companies that need your raw materials, the country should be your promising market.
Which distribution channel is most suitable for your export products: land, air, or sea? You also need to work with reliable freight forwarding companies (https://infomediang.com/freight-forwarders-nigeria) from the originating country to the final destination to meet the needs of your customers.
In the distribution channel, you need to ask yourself the following questions:
- Am I selling directly?
- Am I using a distributor?
- Would a sales agent get the job done?
Experience Of Professionals
One of the ways to understand the trends in the export market is by attending seminars on the exportation of agricultural produce.
Export events are organised by stakeholders like business tycoons, NGO’s and government agencies.
Apart from gaining access to first-hand information from those who have been in the business, it also gives you an avenue to ask questions from professionals in the field.
Seek practical advice from experienced exporters, attend market-specific seminars, and develop direct contacts with potential buyers. You can make use of verified online directories.
Know Your Competitors
You must first identify the kind of country and industry which needs your products. Research on your competitor’s market to know what they are doing right and know how to improve on it.
For instance, the production of chocolate is high in the United States and European countries, you need to know:
- where they currently source their raw materials, this would give you an idea on how to compete,
- the quantity they need, this would guide you on how to up your local source and supply
- the quality they require, this would guide you if NAFDAC standards and other quality checks in Nigeria is acceptable in your country of target.
Minimize Risks And Maximize Prospects
One of the ways to minimise risks in international trade is by knowing the duration of the product you want to export and the quality checks in the destination country.
If your products are rejected in the importing country, it’s a loss for you. If the products get spoiled before it arrives the destination country, it’s a huge loss.
As such, conduct the right checks and arm yourself with the information of the products to be exported.
Product Specific Market Research
Don’t overload yourself with market data. Having gathered and analyzed the specific basic market information, it’s advisable to narrow your findings to the specific product or service.
You can make an offer and be ready to make sacrifices like sending samples to buyers and wait for feedback.
Trade Statistics And Trends
Some of the trade statistics are available on agricultural Business to Business (B2B platforms and other online market analysis tools to help you make rewarding and profitable decisions in your export business.
International Buyer Directories
There are international buyer directories that provide information that would help you to understand the export market. Some of the buyer and supplier directories include tradeweel, tradeling among others (more is coming on this).
Have a plan, conduct a risk assessment, don’t ultimately focus on the profit. You can’t always win in a business. How prepared are you when you experience delays in the delivery of your products? If such unforeseen challenges come, do you have a pool of funds to continue with your business?
You need to plan how to package the products, you need to know the acceptable packaging standard by your buyer, ask him if you don’t know.
You also need to know the rate you would be charged by freight, the length of travel, and the condition on arrival.
You should know the overall cost of the product you want to export before giving a sale price to your buyer, to eliminate loss.
The first mistake you can make in international trade is to stock prohibited export or import products.
Even if the product is allowed in your country, you also need to find out if the product isn’t on the prohibited list of the destination country.
Here are the 15 ways to understand and plan a successful export business:
- Quality of the product
- Market Survey
- Business culture
- Identify your most promising market
- Distribution channels
- Experience of professionals
- Know your competitors
- Minimize risks and maximize prospects
- Product-specific market research
- Trade statistics and trends
- International buyer directories
- Risk assessment
- Packaging requirements
- B2B Platform Trend
- Prohibition Products
The export market sounds complicated, but you can really do well in it if you can abide by the rules that guide international trade and know the required documents by customs in your country.
Even if you already have an order from your foreign buyers, it’s also very important to keep in regular contact with your customers and get feedback on how to improve your offer after delivery.
Deliver on time by working with a trusted freight forwarder and don’t keep customers waiting. In a situation whereby delays cannot be avoided, ensure to update your customers ahead.