Small businesses are often the heartbeat of local economies. But could some of your best customers be waiting overseas? Outside of governments and multinational corporations, international trade was, until recently, a discipline that most small businesses didn’t dare attempt. Paperwork, fees, regulations, tariffs, language barriers: keeping a business afloat is hard enough without piling on all of these concerns (and added costs).
But ecommerce and globalization have radically changed the landscape, according to Michael Lee, the director of global marketing for the massive, international B2B ecommerce platform Alibaba.com. He told Small Business Computing that engaging in the international marketplace online “is a good opportunity for small businesses to expand their footprint globally at low or minimal cost.”
The Small Business Administration (SBA) notes that nearly 96 percent of the world’s consumers live beyond U.S. shores. If you’re looking to expand into other markets, keep in mind that foreign countries hold two-thirds of the world’s purchasing power.
That’s a lot of new customers — not to mention a bunch of potential revenues. Use these five tips to help get started and to prosper once the goods start flowing.
5 Small Business Tips for World Domination
1. Think Globally
This should come naturally to entrepreneurs: Stop thinking small!
The global marketplace can seem overwhelming, but if you want to see your product in other markets, you have to start somewhere. The SBA, as always, offers guides that can point you in the right direction.
Start with the Explore Exporting resources at SBA.gov. Not only will they give you the lay of the land and show you where to find professional help and guidance, but they do something else that’s invaluable: they get you into the mindset of an exporter.
2. Perform Your Market Research and Due Diligence
The SBA suggests, “Use market research to learn your product’s potential in a given market, where the best prospects exist for success, and common business practices.”
Check out The Market Research Library and Trade Stats Express to see whether entering a particular market is even worth considering. The government sits on a treasure trove of trade statistics, use them.
When you get to the stage where you’re ready to consider partnering up, Alibaba’s Lee says, “we strongly suggest that users to do their due diligence.” Just because the Internet makes it easier to conduct global trade, “it doesn’t remove the requirement to do the due diligence,” he adds.
Gobble up each scrap of information on a partner that you can, including the company structure and reports conducted by third parties for insight on how they conduct themselves. When looking for suppliers, check that their manufacturing and shipping capabilities match their claims.
3. Form Relationships
When you order a gadget on Amazon, chances are that you won’t get chummy with Jeff Bezos. While B2B ecommerce platforms like Alibaba.com make it relatively easy to find new suppliers, you’ll want to put in the extra effort of establishing deeper ties.
“At the end of the day, finding a partner is about building a relationship,” says Lee. Simply put, take the time to know your trading partner and to establish a rapport.
4. Trust Your Gut
One good way to weed out wastes of time is to trust your gut, advises Lee.
Your first impression of an online supplier can be a good indicator of how they conduct their affairs. If they’re cagey about their capabilities, present “fragmented information” or skimp on “information about who they are,” walk away.
Their websites can also tip you off, says Lee.
If a supplier is serious about conducting business online, its website or storefront should be up to snuff. It may not be the picture of perfection, but it should at least be informative and appear professional.
5. Don’t Skimp on Communication
“There’s no such thing as over-communication in global trading,” says Lee.
Expect to “encounter language barriers and cultural differences,” adds Lee. When it comes to your livelihood and that of your employees, there’s no room for interpretation. “Everything should be black and white,” he suggests.
Finally, set clear expectations and terms. “Suppliers may not want to say no,” which can lead to delays and complications because they overpromise and under deliver, says Lee.
Pedro Hernandez is a contributing editor at Small Business Computing and InternetNews.com. Follow him on Twitter @ecoINSITE.
Pedro Hernandez is a contributor to the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the Internet.com network of IT-related websites and as the Green IT curator for GigaOM Pro. Follow him on Twitter @ecoINSITE
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