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The Importance of Having an Export Plan

1-10-2017

Bernadette Wiltz, SUSTA

In collaboration with World Perspectives, Inc.

Getting your product on the shelf of a retailer is always a challenge. Getting your product on the shelf of a foreign retailer has unique challenges of its own. Exporting is a great way to build your business, tap into additional growth potential, and lower business risk by expanding your customer network. However, successful exporters – like all successful businesses – come to the export market with a plan.

Assisting you in developing that plan, SUSTA maintains a network of foreign marketing consultants that help find opportunities for export promotion activities and provide feedback on the local export markets. One thing they have all shared is the costs of additional steps to get into the retail market. In India, product mark-up once your product has landed and cleared customs can be 70 percent. In Europe, with duties, mark-up and freight, a product can be expected to retail for about 110 percent of the wholesale price of the product delivered to the U.S. port. Even in Canada, listing fees, broker commissions, labelling changes, freight and currency exchange can double your product’s U.S. retail price.

Some products are unique enough and garner sufficient demand that consumers will pay higher prices. Most products, though, face stiffer competition – so planning is essential. One area where SUSTA’s 50% CostShare plan can help is in creating new foreign language labelling that is compliant with all local labeling laws and regulations. Both the Global Events and the 50% CostShare programs help reduce marketing costs as well.

These programs are put to the best use when they are incorporated into a well-structured export business plan. Things that small companies can do to build a plan include researching freight options. Containers move back and forth between countries; with some countries who ship products to the U.S. there is a backlog of empty containers that can have cheaper backhaul rates from the right ports. Some products from the SUSTA region can be sold for foodservice use, reducing the costs of labeling changes, listing fees, and other expenses associated with retail markets. Another approach for growing companies is to dedicate export products from a second production shift. As all production managers know, the operating costs from a second shift are lower since the first shift covers a company’s fixed costs, and thus there is more room to adjust pricing from a second shift and remain profitable.

In 2015, a total of 253 companies from the SUSTA region – many just like yours - sold more than $414 million worth of products to 65 global markets. For every one dollar invested by these companies into the Global Events and 50% CostShare programs, they saw a return of $49 in gross export revenue. One thing these successful companies all had in common was a solid business plan for exporting their products.