Is Now the Time to Begin Exporting?

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.

Comments

[Jim]

I agree, at this moment many companies have anourmous problems, and many do not have the flexibility to grasp the opportunities which present themselve. I am myself in China running an export company. Export has dropped >50% in 2009 and now is about 70% of what it was in 2008. But companies start ordering again. and it feels like a empty playing field here now. And the best thing, it is still in my normal business line. For me, the time to export from China is good. When I would be living in Europe, I would definately export to China.

[International Business]

I believe that the export market is always available and should be pursued with vigor whether the economy is poor or good, globalization is here to stay and your company should start now or be left behind.

[Craig Maginness]

Thanks for the comment. I agree completely with your position. This post was prompted in part by a pull back from international expansion that I began to see from some of the people in my international business development classes in response to the global financial crisis and its ramifications. As in many cases (such as buying stocks when the market has been red hot and is overpriced and dumping stocks at the bottom of a correction) people's natural reaction to changes in the business environment is not always the most rational.

Craig