Smart manufacturers across America are growing profits and revenues through Export. Exporting is the process whereby a good produced in one country is sold and shipped into another country. Historically US exports grow when the US Dollar is weak. In September 2020 the US Dollar was near its lowest level in over two years driving strong international demand for US manufactured goods.
Four big reasons why growing into international markets through exporting is the smart move for your manufacturing business.
- Access a larger market – The United States represents approximately 5% of the world’s consumers. So expanding your market to the world can increase your potential customers by 20 times.
- Grow sales and profits – Your sales and profits will grow as you sell more products to your now larger market. Companies that export have higher EBITDA than those who don’t.
- Diversity geographically – Developing export markets allows your profits to become less dependant on the US business cycle
- Add to your exit strategy – Increasing the value of your company through larger yearly profits and cash flows added to the value growth of being an established international exporter (ie the value of another core competency) directly translates to higher enterprise value for ownership.
Learning to Export successfully is like any other education. You can learn through mistakes or you can learn from qualified professional resources. And, in the case of exporting, learning from the professionals is by far the most effective and efficient because the federal government as well as most States offer high-quality, low-cost (or even no-cost) education, training, and assistance to manufacturers who want to grow their businesses through export.
Export Resource – US Customs Service and International Trade Administration
The best federal resource can be found through the International Trade Administration and accessed at www.trade.gov
A quick look at this site and you will be able to see short, educational videos that tackle:
- Learn How to Export includes 3 videos that walk you through an overview of the export process, an assessment of your export readiness, and creating an export plan.
- Research Foreign Markets includes 3 videos about Researching global markets, planning to enter a foreign market, and Basics of Free Trade Agreements.
- Negotiate and Export Sale will educate you about using a pro-forma invoice to negotiate a sale, methods of payment, and determining total export price with foreign tariffs and taxes.
- Navigate Shipping & Logistics covers the basics of product preparation, shipping, and shipping documents for export.
- And more…
To really do it right; use your State’s ExporTech program
Wisconsin’s ExporTech program is a “best-in-class” example of a State program assisting manufacturers to grow internationally. ExporTech’s program participants:
- Learn successful exporting strategies
- Develop an effective exporting plan
- Get expert feedback and coaching from a panel of experienced exporters
“Graduates of Wisconsin’s ExporTech program average sales increases of $900,000 in six to nine months” (per ExporTech marketing)
With a cost to participate in ExporTech starting at $4,500 to $7,500 the risk-return ratio for manufacturers to learn to export through these programs is obvious.
Exportech is a collaboration between the Manufacturing Extension Partnership Centers and the US Commercial Service of the US Department of Commerce and a variety of other regional partners.
Growing your manufacturing business through exporting doesn’t have to be intimidating. With the right help from both federal and state programs you can successfully understand how exporting can grow your business, make a plan to expand effectively into an export market, and benefit from the experience of other manufacturers who have done it already.
Customodal provides international freight forwarding services for US manufacturers exporting by air or ocean to the entire world (except where prohibited by law!). Call Mike at 800-445-6577 (Ext 111) today to learn how to make the transportation and logistics portion of your export plan work smoothly and cost effectively.
Further Reading About Exporting:
Air Freight or Sea Freight Cost
The Difference Between CIF and CIP