If you have recently started a business that operates predominantly online, your mind will no doubt be filled with enthusiasm and you will be eager to seek out new opportunities. If your product is something that can be shipped out or delivered digitally, then you should ask yourself if you are casting your net into too narrow waters. Sometimes it seems safe and easy to channel your business directly towards a domestic market. But you may be selling yourself extremely short.
There are obvious complications when it comes to trading to an overseas market, and you should consider these things before you start.
Understand The Market
You will need to have a good handle on the market that you are entering. Do some research into other companies that have a similar offering that already trades in that country. Find out some information about their successes and failures and try to understand the challenges. Something that may be popular where you are may not be so overseas. There may also be cultural barriers to overcome. You may need to alter your company branding or tweak your products or services to fit in with the demands of society. If your business sees seasonal fluctuations, you may find that these differ in an overseas market where there may be less focus on Christmas, or that have different weather.
Handling Money From Overseas
One of the major concerns that you need to work through is the ability to trade in foreign currency. This will have an impact on your companies accounting and you may need to open up a usd bank account. Exchange rates will obviously fluctuate and you should try to develop a good understanding of the exchange rate mechanism.
Dealing With Import And Export Duties
A big area that you will need to research will be the import and export aspects of the business. If you plan on shipping overseas from your own country, then you may find that there are restrictions, barriers, and duties that will apply to your trade. These may alter over time, and arrangements will vary from country-to-country- although the European Union, for example, has trade agreements that cover any of the member states within the union.
When it comes to selling your products overseas it is vital that you understand the taxation system. This will include any value-added taxes on products and services, but you may also need to account for business taxes. Find out as much information as possible from the embassy of the country in question, as they will have departments set up for dealing with overseas trade.
The other option that you may have is to set up a distribution centre within that country. This may make some of the import and export problems easier, however, you will need to recruit, train, and manage an overseas division to your company, which has a different set of problems surrounding it, such as ensuring you work to that countries employment regulations, as well as working within their taxation parameters.