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How to select a product for export business
Finding a perfect product is the foundation in fabricating and expanding any export business. To select a right product that appeals to consumers’ necessities can be tough, especially when one is dealing with costumers at a global level. Here are various criteria that should be taken into consideration in order to select a product for export business:
- Be different: It is important to be as unique and innovative as you can. Study the previous trends of various markets and global statistics in order to find a fresh product that can be as universal as possible. The wider the horizon, more are the chances of your success.
An important thing to consider is the availability of the selected product in your nation. The raw materials should be abundant, cheap and easily accessible in order to ensure adequate and affordable production of the goods. A steady supply base which can deliver products within stipulated time frame is essential to suffice the demands of consumer nation and maintain a long-lasting trade relation.
Know your market:
Every venture must begin with a detailed research regarding the demand and supply of your product in the global market. Every nation has a variety of cultural factors, tastes, levels of skill, economy, etc. After a thorough research, select the countries with the best market for your product. Study the map, find the geographies where the demand exists, find whether the production can suffice the demand, how frequent is the demand, how the nation’s climatic, political and economic conditions and variations affect the demand, study the transport and telecommunications infrastructure, the distribution and delivery time and its associated market trends.
Trade relations and license:
In order to select the product, it is necessary to study the trade relations of your country and the country you wish to export the product to. This helps you to know whether that product is allowed to be exported to that country from yours. For example, the government of India has a list of prohibited items that you cannot export from India. You can find that list on DGFT’s website. (DGFT: The Directorate General of Foreign Trade)
One must also study the license requirements regarding the export of the product. Most of them would not require a license, but it is preferable to enquire beforehand in order to avoid any future complications.
The profit margin:
A good profit margin is necessary to sustain any business. Hence, the selected product needs to be economically rewarding. Study the source and availability of the raw materials, the resources needed and the overall production cost. It is also advisable follow the time trend and learn the seasonal vulnerability of your product in a particular country where you wish to establish an export business as the profits are susceptible to these factors.
Affordability with respect to currency:
Make sure the product you sell is affordable for the people in that country. In other words, choose the product whose price is good enough in accordance with the currency of that nation. A successful entrepreneur knows how to ensure affordability of a product, keeping in mind the safety, durability and overall product quality.
Analyse whether your product has the potential to create future expansion opportunities. The potential of a product in the foreign market can be evaluated from the point of view of acceptance and need of the product in the foreign market. Having stagnant sales might harm the business. Knowing the growth prospects of your business is necessary to ensure that there will be justice provided to the time, money and energy invested to build the business.
Know your competition:
A unique product will help you escape the cut throat competition and stand out in the market. However, no matter how unique your product is, there will be competitors around. Studying your competitors gives you an extra edge over them. This also helps to avoid disappointments and damages done due to rival companies in an ever-changing society.
This is an unusual suggestion but an important one. You need to have a passion for the product. In order to sell the product overseas, you need to keep updating yourself about the trends and changes in the market that affect your product and for that, you need to have the passion to learn new things about the product regularly. Find the optimum product that excites your entrepreneurial-exporter spirit!
Selecting the product is the deciding factor about your organization’s success. While choosing the product, one should also take into account the incentives or facilities provided by exporting country to promote the exports. A right product with proper amount of dedication and discipline can help one go from rags to riches. Exporting the perfect product with required connections could be the business breakthrough of a lifetime.