Exports are one of the lucrative business. It can be a part of your business or you are entirely prepared to sell your products/services to international market. It helps in mitigating the risk of economic crisis and cash flow. There are certain things you can do before commencing the legal procedures. There are two types of exporters viz merchant exporter and manufacturer exporter. Following are the chronological steps to get an export order for the merchant exporter. The manufacturer export will already have their product chosen. So, they can skip the step 1
Step 1: Choosing a product/service:
First of all, Choosing a product is obviously vital to export. The best strategy to choose a product is to do a STEEP analysis based on your SWOT analysis. You are more likely to get success if you choose a product you can emotionally get attached to or the product you love the most. There are various tools and formula to identify the most profitable product to try for exports. Developing your niche will increase your chance of dominating the international market. Value addition is another key to success to find a better market for your product. If you are keen to have list of items exported from India, choose from, http://dgft.gov.in/exim/2000/itchs2017/ITCHS2017.html
Step 2: Choosing the market:
Most of the exporters are keen about selling their products to developed countries like U.S.A, Europe, U.K., Australia, Canada. But there are perks in exporting to other countries. There are more than hundreds of countries actively importing products and goods from other countries. Choose your market using the 7 market analysis tools provided in legacy.intracen.org/marketanalysis/. Construct your ideal buyer persona before choosing the market. There are buyers of different ranges from small businesses to giant enterprises. The exporter should clearly understand whom can they sell to depending on their capacity. Start with small quantities to get enough experience to achieve big orders.
Step 3: Constructing a business plan:
Developing a business plan is skipped by most of the entrepreneurs. But this is fundamental if you are keen to grow and establish your business. Business planning helps you to set in the right direction based on factual and not on mere intuition. Intuitions can be tested and justified through your detailed business plan.
The most crucial part of business planning is financial projection and marketing strategy. But if you get these right, you can avoid major pitfalls and mistakes at the early stage. The entrepreneur need not be a business graduate to get it done but requires a common sense and logical understanding. There are free courses available online. The best one I would recommend is Startup India learning program.
Step 4: Learn about export market/Incoterms/FTP/export documents:
Once you have chosen your product and market, it is time to plan and prepare for your export business. The export market works slightly different from the domestic market. It’s important to study both the export trend of the product and import trend of the product to your chosen market. You are competing with 3 types of competitors. Exporters of your product from your country, Exporters of your product from other countries and Other importers/suppliers of the same product in the chosen market.
The market analysis tools are essential to be used in studying the trends. Highlights of FTP 2015-2020 can be accessed through http://dgft.gov.in/exim/2000/highlight2015.pdf. The exporters choose to become a member of various B2B portals. There are about 23 such portals. New portals are exhibited almost on daily basis. It is better to become a free member of these portals to gain some understanding. Knowing Incoterms is extremely important to do exports. The export documents are proforma invoice, packing list, commercial invoice, certificate of origin, shipping bill/bill of entry, ARE-1 form, Mate’s receipt, Exchange declaration form (GR/SDF form), Bill of exchange, sight draft, Inspection Certificate, Bill of Lading, Airway Bill, Insurance certificate, consular invoice,
Step 5: Developing a marketing strategy:
This is a crucial step next to constructing a business plan. The business plan is best suitable for your overall business operation. A detailed marketing strategy will help you get a better result in a comparatively shorter span of time. We are living in the era of Information technology. Almost the whole world is acquainted with the WORLDWIDEWEB. Inbound marketing strategy has taken its important seat in the assembly of marketing strategy. We get information at the snap of our fingertip. Having a solid marketing strategy is very important to earn your buyers trust and increase your visibility in the internet search.
Step 6: Getting your license:
This is the easiest step in the export business procedure. Those interested in EXIM business need to apply to the regional office of the Director General of Foreign Trade (DGFT) for getting Importer-Exporter Code (IEC) Number. IEC number is not mandatory in the case of imports for personal use. Now, IEC can be applied through online just by uploading the necessary documents. Check http://dgft.gov.in/exim/2000/iec_anf/ieconlnapplform.htm. This step is applicable in the case of first-time exporters. Under GST regime, changes are made to accept PAN card as the license to do exports.
Step 7: Get in touch with EPC/other government initiatives:
Export promotion councils, Federation of Indian Export Organisations are key government bodies to promote export activities from India. The exporters must be a member of these councils to avail the benefits to doing exports from India. http://www.indiantradeportal.in/vs.jsp?lang=1&id=0,31,223,225 lists the Export promotion councils in India. The exporter has to register with the concerned export promotion council. For example, in the case of garments, it is essential to obtain a registration-cum-membership Certificate (RCMC) from the Apparel Export Promotion Council (AEPC).
Step 8: Contacting CHA or freight forwarding agents:
Custom house agents/Freight forwarders help you with export documentation and freight procedures. The difference between them is very thin. Logistic is itself an ocean to discuss. The important thing is to have CHA/freight forwarder who will take care of your cargo needs to be shipped safely to your buyer doing the necessary documents.
Step 9: Pricing strategy:
Pricing has to be done properly to get profit from the sales. There should be a pricing strategy in place to be able to successfully obtain an export order. A merchant exporter should get product and package cost from the manufacturer/trader, freight and related costs from their CHA/freight forwarder. The exporter should also determine their minimum order quantity and product specification to have a good pricing practice.
Step 10: Listing the buyers:
By now, the exporter will have a list of potential importers through various sources such as social media profiles, inquiries through their own website, B2B portals, other government websites, trade opportunities from Indian government e-magazines, importers list from Indian embassies, buyers list from EPCs, importers contacts from trade shows and exhibitions.
Step 11: Contacting buyers:
The exporters now begin to contact their buyers through emails, Skype calls, WhatsApp, social media, and make your first impression best by providing necessary information. Importers/import agents are usually well-aware of the markets. Your in-depth homework and preparation will give enough confidence to gain their trust. The best practice is, to be honest, tell the truth or else the importer can find out through the missing links. Timely replies and responses will put you ahead of your competitors. Provide your best offer to your buyer on proforma invoice.
Step 12: Sending samples:
Sending samples is not a necessary step unless the buyer asks for one. The best practice is not to assume but be open to ask needed information or provide needed information before committing to sending the samples.
Step 13: Confirming the export order:
You have worked hard/smart enough to get to this point. You deserve a sweet and pat on your shoulder. But before, confirm your order by getting sales contract, purchase order depending on the mutual understanding. Therefore, both exporter and importer will have to agree to the terms and conditions of the contract such as pricing, documents, freight charges, currency and so on. Finally, the importer sends a purchase order.
Step 14: Executing the export order:
With the export order in hand, the exporter starts manufacturing goods or buying them from other manufacturers. The exporter makes arrangements for quality control and obtains from the inspector of quality control, a certificate confirming the quality of goods, depending upon the requirement. Exportable goods are then dispatched to ports/airports for transit. After the completion of these formalities, the exporter contacts the clearing and forwarding agent (C&F agent) for storing the goods in warehouses. The exporter can also store the goods personally. The forwarding agent presents a document called the Shipping Bill, which is required for allowing shipment by the Customs Authority.
Step 15: Receiving payment:
After loading the goods into the ship, the captain of the ship issues a receipt known as ‘Mate’s Receipt’ to the ship superintendent of the port. The superintendent calculates the port charges and gives it to the exporter/C&F agent. When the port payments are made, the C&F agent or exporter gets the Bills of Lading or Airway Bill from the official agent of the shipping company or the airline. The exporter applies to the relevant Chamber of Commerce for obtaining Certificates of Origin, stating that the goods originated from India. This is not a mandatory document in all cases.
The exporter also sends a set of documents to the importer, stating the date of shipment, the name of vessel, etc. Moreover, it is desirable to send certain documents like the Bills of Lading, Custom Invoice, and Packing List to their foreign counterparts.The exporter now presents all the important documents at his bank. This must be done within 21 days after the shipment.The exporter’s bank sends these documents to the importer’s bank. The importer’s bank should make the payment on or before the due date. In the case of advance payment, the exporter will receive the payment after receiving the purchase order.
Step 16: Follow up with the buyer:
It is essential to keep your buyer/importer informed at each stage. It will help you to build a rapport with the buyer and makes it easy for further orders. Once the buyer receives the goods, ask for the feedback to provide any after sales service if required.
These are only basic steps for doing export business. It is one among 7 segments of Exports and Imports business. If you are looking for a one to one mentoring on exports training, email us to email@example.com or WhatsApp +917550302005.