Exporter’s Toolkit

1:Readiness     2:Planning     3:Markets      4:Marketing       5:Products

6:Pricing     7:Payments     8:Financing     9:Freight      10:Shipping

This page is no longer being maintained, though most of the material linked and listed here continues to be relevant.  If you are interested in exporting, please contact the Washington Small Business Development Center or the Washington State Department of Agriculture.


AGRICULTURAL EXPORT QUICK START TOOLKIT

The Export Assistance Program at the WSU Impact Center is part of a statewide export initiative sponsored through a grant from the Washington State Community Economic Revitalization Board, which is administrated by the Washington Department of Commerce. The WSU Impact Center performs research and outreach in association with the Washington Small Business Development Center to assist with agricultural research and the International Trade Alliance to offer export workshops across the state.

Step-by-step instructions for agriculture exporting.


Step 1: Assessing Readiness

The first step is perhaps the most important: assessing readiness to export. There are certain characteristics that are common (but not necessarily essential) to export-ready and successful exporters. For example, successful exporters typically are already successful domestic sellers, and are large enough to have staff, time, and resources to devote to international travel, marketing, and sales. Typical successful exporters also are able to sustain themselves for a year or more for international sales to become profitable.

Action: Take a few online assessments


Step 2: Planning

The next step is to develop an individualized, customizable, and somewhat flexible export plan. The export plan integrates resources allocation, market research, product characteristics and pricing, and goals. The export plan is dynamically developed. The initial plan is simple and short. This plan is modified and revised as more information and data are available to exporters. This process generates a complete and detailed export plan.

Action:


Step 3: Researching Markets

Once you begin planning, you must decide which foreign countries to target. Market research is specific both to that country and your industry. A few variables to consider in addition to those for sales in the U.S. are government regulations (both foreign and U.S.), tariffs and nontariff barriers, language, growth potential, distribution channels in the foreign country, and the competition in the foreign country (is it state supported or have lax labor and environmental regulations, for example).

Action:


Step 4: Marketing Channel

Now that a target country is identified, you must choose a method to distribute your product abroad. If you are not able to distribute it abroad directly (and most are not initially), then there are intermediaries available to assist you. The flavors of these intermediaries are export management companies, international distributors, and export agents.

Action: Explore export intermediaries


Step 5: Marketing Products

With the help of your marketing intermediary, you must decide if you will have potential customers contact you through advertisements, directories, foreign language websites, or agent services, or if you will contact potential customers that you have identified by attending foreign trade shows, contacting foreign agent services, or in-person demonstrations.

Action:

  • Consult with your marketing intermediary, but generally, use what you do for domestic marketing while acknowledging cultural differences.
  • See these information sources.


Step 6: Pricing Products

Typically, international pricing is more “negotiable” than may be the case domestically. To set a price, most successful exporters work backwards by first setting an attractive price in the foreign market. Then you consider shipping costs, including insurance, and costs associated with international inspections and regulations. An important feature in quoting a price or writing a pro forma invoice is determining where geographically you have responsibility for the shipment and where that responsibility is transferred to the importer. Another feature to consider is the exchange rate and that the exchange rate may fluctuate between the time of your quote and the payment. If there is no way this can be done such that the remaining price at your production center is high enough to be profitable, then that market should not be considered.

Action:

  • Know costs of shipping before quoting a price. Shipping rates may vary greatly, depending on the season.
  • Follow these steps.


Step 7: Receiving Payments

The common methods of payment are cash in advance (wire transfer or foreign check), letter of credit, documentary collection, and open account. With cash in advance payment method, you ship only after being paid. At the other end, open account means you get paid only when the shipment has arrived. In practice, most international payments are letter of credit and documentary account, both of which involve your bank and the importers foreign bank.  It is important to use one of these mechanisms to protect yourself against nonpayment, as there is no equivalent of the Better Business Bureau for international transactions.

Action:

  • See these pricing guides and samples
  • Remember to consider exchange rate fluctuations in the timing of receiving payments.  A 5% change in exchange rate could mean the difference between a profitable and unprofitable international sale.


Step 8: Financing Exports

There can be large time spans between when you commit to international sales and when you get paid for sales. This is true for all exporters, but particularly so for new exporters or new markets. Because of the increased risk, some U.S. banks that support domestic business will not finance loans backed by oversees receivables. Fortunately, there are a number of government-sponsored loan programs, insurance, and grants to help small business export. An example is the USDA Export Credit Guarantee Program (GSM-102). An example of a Non-USDA Program is Working Capital Guarantee Program at Export-Import Bank and U.S. Small Business Administration.

Action:


Step 9: Forwarding Freight

Many first-time exporters use a freight forwarder to help them with international inspections and export documentation. Freight forwarders are experienced in rules and regulations of importing countries, methods of shipping, export regulations, and completing documents in a timely manner. It is the responsibility of the exporter to hire a freight forwarder; importers rarely (if ever) do this. The freight service starts from coordinating shipments at place of production to completing trade documents.

Action:


Step 10: Shipping Products

The final step is logistically sophisticated. To physically move products overseas sometimes involves 40 steps and 10 parties. If you do not choose a freight forwarder, you must complete all shipping documents, including those for international inspections. These occur at both the U.S. port of exit and the importing country’s port. The most common documents are commercial invoice, packing list, product and sanitation certificate, and various bills of lading.

Action:


Evaluation

In order to measure the success of the program, please download and complete our exporter’s toolkit evaluation form.

 


 

Disclaimer: This manual’s steps are based on interviews of successful exporters. Each individual case is specific and optimal strategy may differ from those discussed here. References to sources and documents outside of WSU Extension and the IMPACT Center are for reader convenience. WSU does not review, control, or take responsibility for their content, nor does WSU or any person therein explicitly or implicitly endorse the positions or policies of these sources.

 


Some WSU Extension web sites provide links to external sites for the convenience of users. These external sites are not managed by the WSU Extension. Furthermore, WSU Extension does not review, control or take responsibility for the content of these sites, nor do these sites implicitly or explicitly represent official positions and policies of WSU Extension.

 

 

Created December 8, 2011

Washington State University