Thinking of exporting? Here are 9 reasons to get started!
Have you been approached by international customers interested in your product or service? Or perhaps your company has performed well in the domestic market, but you know there is limited opportunity for growth. Maybe you’re looking for a new revenue stream to improve business. Is it time to start thinking of exporting? From reaching more customers and increasing your turnover to enhancing your ability to innovate, here are nine reasons to begin exporting!
1. Access more customers
Exporting means more customers wanting more of your products – and that’s good news! Australia is a small domestic market with a limited number of customers. Exporting to neighbouring New Zealand and Indonesia can provide you with access to millions of new clients and if you factor in the Indian and Chinese markets, that number rises into the billions. Even if your product or service is already popular with the domestic market and you are turning over a profit, you can still benefit from exporting overseas if demand is strong.
2. Increase your turnover
On average, businesses that export are more profitable than those which do not export, according to Austrade. This is largely because foreign markets are more diverse, and consumer habits and needs differ in each country, thereby offering increased opportunities for certain products or services that don’t currently elicit any demand at home.
3. Australian products and services are in demand
Australia is known for being a “green” country which produces safe, high-quality products. Simply by being Australian, your products or services are in demand in traditional, established export markets like Europe and the US, as well as in the high-growth economies of China, India, Russia and Brazil.
This has been the case for Super Sprout, an Australian company which produces high-grade fruit and vegetable powders. Super Sprout began exporting to the UAE, where it experienced strong demand for its product among a population with high disposable income and an appetite for high-quality specialty products.
4. Give your products a new lease of life
You may be reaching a saturation point with your products or services here in Australia, but if you take them abroad you could extend their lifespan with new audiences.
Dun & Bradstreet cites the example of the Australian wine market, which is flooded with different types and brands at various price points, making it difficult for a wine company to stand out or gain traction locally. By contrast, in China, there is a strong demand for imported wine driven by improved living standards and increased disposable incomes. Wine is also increasingly seen as a ‘status symbol’, and in 2011, China was Australia’s fastest-growing wine export market with sales rising 23 per cent by value. This point is reinforced by personal experience – one of my colleagues exported about 100,000 bottles of Barossa Shiraz to China just a fortnight ago!
5. Improve your business profile
Talk about how your product or service is sold in Europe, the US, China or the Middle East, etc and you’ll find that your credibility and reputation significantly improves.
6. Enhance your innovation
Different markets invariably have different and often new ideas, management practices, marketing techniques and ways of competing that companies will not have experienced in the domestic market. These differences can fuel innovation by prompting exporters to imagine and implement new ways of doing things.
Melinda Richards from Super Sprout says that “export has helped Super Sprout to innovate”. Super Sprout’s products did not fit easily within the Australian health food distribution market which is limited in size and “a bit tired” in its approach to brand development. In contrast, Melinda says that “overseas markets have people who are early adopters and are interested in new trends” and that the company’s international markets are hungry to develop brands and open to new ideas. This has had on impact on the way in which Super Sprout has presented its products abroad.
7. Spread your risk
As Dun & Bradstreet point out with most of the world’s consumers living outside of Australia, the world can become your oyster if you are able to identify a gap in the overseas market and reduce your dependence locally.
Given the competitive domestic market in Australia, moving your business away from complete domestic dependence could be a good move. With additional revenue streams potentially coming in from international markets, you can spread your risk across a wider range of customers.
Moreover, if one market suffers from a recession, lowered demand or changed preferences- your investment, sales and profits won’t be as significantly impacted.
In fact, exporting is a good way of balancing your growth as you can target new markets when there is low demand at home due to seasonal fluctuations. For instance, summer in Australia is generally winter in the Northern hemisphere, meaning that if your company produces seasonal goods such as swimwear, sunglasses and certain fruits that are popular only during summer, they can still be sold overseas when the temperature dips.
8. It’s easier than you think
Although exporting may seem daunting, it’s easier than you might imagine and there is a wealth of support and expert help that’s widely available through banks, Austrade, the Export Council of Australia, chambers of commerce, trade organisations and industry associations.
9. It’s not just for big business
The internet has thrown open exporting to small businesses, thousands of which already successfully trade with both traditional markets like Europe and the US and lucrative, high-growth economies.
If you think all this makes sense, but aren’t sure how to get started, make sure you read next week’s blog. Or visit the Dearin & Associates website at www.dearinassociates.com.