What Retailers Need to Know Shop Talk:
About Expanding Internationally
Since goods that are commonplace in one country are often exotic and
highly desired in another, access to the international market can present
real advantages for gourmet retailers. According to the Small Business
Administration (SBA), 96 percent of the world’s customers live outside
the United States, and two-thirds of the world’s purchasing power is in
foreign countries. Whether a gourmet retailer hopes to market products
to customers overseas, establish relationships with international partners
or distributors, or simply wants to source goods directly, the international market holds plenty of opportunities.
But before tackling overseas markets, small-business owners need to
make sure they’re prepared. Below are tips that will help businesses
understand what to consider before doing business abroad.
Make a Plan
Starting a business overseas requires a solid business plan, just as it
does in the United States. In fact, with unfamiliar markets and new
concerns that come with doing business internationally, an international
business plan is even more critical. Businesses should start with questions
about the decision to go overseas: how important is it, what are the
goals, and how committed is the company? Other important considerations include understanding cultural and aesthetic differences in the
market that could affect your plans. It’s also important to focus on the
most promising markets and customers, as well as plan for market-entry tactics.
Two places business owners can turn to for help with planning are
Small Business Development Centers and the SBA’s resources.
rates by paying vendors in foreign currency. Also, wiring foreign currencies to destinations abroad may be less expensive than wiring U.S.
dollars, depending on the available exchange rate and applicable transaction fees. Transactions in foreign currencies, however, also come with
risks. In 2010, for example, the euro’s value fluctuated as much as 16
percent. And dealing with regions where political and economic situations
are less stable can mean even greater volatility. These fluctuations
make it necessary to monitor exchange rates closely and work with an
experienced foreign currency transaction partner.
Of course, techniques and tools also exist to help keep risks in balance.
Some businesses may qualify for a better foreign exchange rate by
aggregating multiple payments in the same foreign currency. Some
services that allow businesses to send and receive payments overseas,
such as FX International Payments by American Express, make these
techniques available to small businesses and help them make the most
of foreign currency transactions.
Prepare for International Payments
Whether buying or selling overseas, being prepared to deal in foreign
currencies is essential. Even small businesses now have access to foreign
currency transactions, which can bring real advantages. Businesses
may, for example, be able to take advantage of favorable exchange
Know Before You Go
Just as with foreign travel, nothing beats proper preparation. Every
business will encounter growing pains and the unexpected, but research
can simplify the process. To minimize surprises, businesses should
thoroughly research the target market in advance. One place to start
is www.export.gov, which culls information from a variety of government agencies. In addition to basics for an export plan, the site offers
many resources, such as country guides for businesses and market
research tools by industry. It also provides resources on related legal
issues and more. Businesses can also look to U.S. Customs and
Border Protection for more information. There are various licenses
that may be required, for example, as well as U.S. and foreign
regulations, certifications and tariffs to be aware of.
Don’t Go It Alone
Doing business abroad will require a variety of vendors and partners,