The Benefits of Exporting – For You!
Posted on September 10, 2012 BY Food Export Staff
- Increase Sales and Profits:¬†If your firm is succeeding domestically, expanding overseas will likely improve overall profitability as well. Average orders from international customers are often larger than they are domestically, since importers overseas stock by the container rather than by the pallet. Furthermore, increased sales tend to increase productivity by lowering per unit fixed costs.
- Short-Term Security:¬†By expanding into international markets and spreading your risk over a wider customer base, companies become less dependent upon the ups and downs of the domestic economy and the likes/dislikes of the American consumer.
- Long-Term Security:¬†The U.S. is a large market with a wealth of opportunity, but it is also a mature market with intense competition from domestic and increasingly foreign competitors. (The U.S. National Foreign Trade Council estimated that abut 80% of all U.S. industry now faces international competition – many of it right here in our own backyard!) We are approaching the day when we will be doing business in a single “global market” instead of foreign and domestic markets. For most food and agricultural companies, therefore, exporting isn’t just a way to maximize profits today. It also represents the future of their businesses tomorrow.
- Enhance Competitiveness:¬†Repeated studies have shown that exporting improves companies’ competitive advantage. Establishing your company overseas will provide a new global perspective and can facilitate improvements with existing and new products. Oftentimes companies discover an innovative product developed for an overseas market that turns out to be a success domestically, too. In addition, exporting can help you compete more effectively against foreign competitors here in the U.S.
- Economies of Scale:¬†Exporting is an excellent way to enjoy pure economies of scale with products that are more “global” in scope and have a wider range of acceptance around the world. This is in contrast to products that must be adapted for each market, which is expensive and time consuming and requires more of an investment. The newer the product, the wider range of acceptance in the world, especially to younger “customers,” often referred to as the “global consumer”.
CATEGORIES: Why to Export