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OVERCOMING A MAJOR CHALLENGE FACING NEW EXPORTERS When Dealing in International Trade, You Must Prove That You Bring Value to Each Transaction.
If you want to become an international trader, what is likely to be your biggest challenge?
In the international trade business, it usually boils down to locating buyers and sellers and knowing which order to do it.
If you're serious about becoming an exporter, your first major task is identifying a supplier. The "fax jockeys" out there who hunt around for buyers and then start looking for a supplier of that product never seem to last very long. And for good reason.
They don't ADD VALUE. And adding value is the commodity you're selling. You're not really selling steak sauce or phone cords or garden tools. That's what your supplier is selling. Instead, you're selling your ability to solve problems, find buyers and sellers, ease concerns and pull the deal together so everyone is happy.
The new trader has a few obstacles to overcome to be successful. One of the biggest challenges is establishing credibility, which is a topic I'll address in a future article.
But the other big challenge faced by all intermediaries--new and old--is avoiding the "middleman" stigma. I've discussed this before but I just want to reinforce a few important points on the subject, since I receive so many questions about it.
Buyers and suppliers sometimes feel that your role as a middleman just raises the final cost of the product and serves no other real purpose. When buyers and suppliers decide to cut the intermediary out of a trade transaction (it's called "circumvention," and although it doesn't happen much, it DOES happen), this is usually the reason they give, lame though it may be.
If you're doing your job right, of course, this is a false perception. The value you add to the transaction almost always outweighs the modest commission you collect when the sale is completed. If this issue comes up in your discussion with a potential supplier, simply point out how much cheaper it is to hire you than for the company to start and operate its own export department.
Not only do you bring expertise and enthusiasm, the company doesn't need to find you office space, pay health and retirement benefits and you receive no money unless you're successful. How many other company employees (you might ask) get paid only when they bring in cash through the front door?
One of the most successful strategies for avoiding the middleman stigma is to present yourself as much as possible as the supplier's own export manager and NOT an intermediary. One way that many successful intermediaries "assume the cloak" of the supplier is to use supplier letterhead on all correspondence, faxes and even emails. It works and reinforces your role as someone looking after the best interests of the supplier.
When you request permission to do this, the supplier is often more inclined toward hiring you in the first place. This is just one of the reason you should look to identify a supplier BEFORE you start hunting for buyers.
Of course, using company letterhead is the least of your concerns if the supplier doesn't believe you have the expertise to do the job. You must convince him you will add value. What are some ways you can do that?
Take advantage of your "edge" before making export contacts. Identify an industry with which you are familiar or target a country where you have contacts.
These are just a few of the ways (others include being prepared with questions about funding, translations, shipping, currency transfers) you can show you are more than a middleman. You are finding buyers. You are solving problems. You are adding value.
And in the end, it's proving that you are adding value--and bringing money in the front door for your supplier--that will guarantee your success and profits in the global marketplace.
Dennis Hessler is an international trade consultant and publisher who runs his own home-based trade and information company, Spyglass Point Productions. You can learn more about Dennis' international trade information products, including how-to-books, videos, software, newsletter and consulting services by contacting him directly of visiting his website.
Spyglass Point Productions PO Box 13141 Pensacola, FL 32591 Phone: 850-438-5527 http://www.spyglasspoint.com Dennis@spyglasspoint.com
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