Exports are down and economies everywhere are contracting as our global interconnectedness is proving both blessing and challenge. Amid the downturn companies are cutting marketing budgets, travel expenses, and, most importantly, people. One might reasonably ask whether this is the time to start or expand exporting. I suppose part of the answer may depend on your general view as to whether these are times to hunker down and hold on or to seek out new opportunities to replace the old ones that aren't there anymore.
If your market at home has slowed, and who's hasn't, you may have some capacity that you could cut -- or you could redeploy it elsewhere.
Despite some additional strength over the past 6 months, the dollar remains relatively weak against many foreign currencies down about 50% from it's peak against the Euro. This means that as against a few years ago, goods produced in dollars are still relatively cheap in many markets abroad.
Judging from dry bulk shipping rates, the cost of getting exports abroad is at an all time low.
As the power of business networking over the internet continues to expand, the ability of smaller companies to access resources for foreign trade has continued to increase and the cost of reaching out to for flung customers has decreased.
And even if the market opportunities abroad are not as robust as they were a year or two ago, they still exist -- and their relative value given the shrinking opportunities at home may be just as great. Plus, when things begin to turn around, there is much to be said for having the advantage of having gotten in early. You may have as good a shot now at gaining the interest of a potential top distributor or business partner abroad as at any time in the past few years -- after all, they're perhaps a little slow as well.
The biggest challenge may be whether you can get in fast enough to take advantage of the opportunities. One of the tough things about international business is that it takes time -- time to develop the kind of relationships you need to make sure you're working with the right partners abroad, time to get your product through the testing and certification requirements that may exist abroad, time to get your branding and marketing approach adapted to the different cultural sensitivities of a foreign market, time to get your people trained in export documentation and logistics.
Now is a good time. The key to success may be finding ways to accelerate your ability to make it happen without sacrificing the need to do it right. I have some ideas on that topic as well, but I'll get to that in a next post. In the meantime, opportunity awaits.