I'm interested in overseas export business, but how should I take the first step?
The first step to starting an overseas export business is to do thorough research on the products and markets you want to export.
The basic steps are listed and explained below.
However, this is general information and may vary depending on regulations, market conditions, and type of business in each country.
1. Selection of products and services:
– Research market needs to identify which products and services are in demand overseas.
2. Target market selection:
– Identify the countries and regions where potential customers are located, and understand the market characteristics, laws and regulations, culture, consumer preferences, etc.
3. Create an export plan:
– Develop a business plan and include export goals, strategy, budget, resources, risk management plan, etc.
4. Review regulations and requirements:
– You need to understand the legal requirements of your target country, such as customs duties, taxes, and import regulations.
5. Logistics and Shipping:
– Find international logistics partners and establish shipping methods, costs, insurance, tracking systems, etc.
6. Obtaining documents and permits necessary for export:
– We prepare necessary documents such as permits, health certificates, and certificates of origin depending on the products to be exported.
7. Build sales channels:
– Build sales channels through overseas agents, distributors, wholesalers or online platforms.
8. Marketing and Promotion:
– Introducing products to the market and developing marketing strategies tailored to the target market.
9. Payment methods and financial management:
– Set up safe and reliable payment methods for international transactions, including managing currency risks.
10. Continuous market research and quality control:
– Constantly monitor market trends to maintain product quality and service with high customer satisfaction.
The basis for these steps is derived from successful export rules of thumb, international business education programs, export guidelines from commercial institutions and governments, and export business best practices.
Market research, planning, the right partnerships, and execution are key to success.
Since it is important to gain practical experience, one way is to start small, learn how the business works, and gradually expand.
Continuous learning and market adaptation are an integral part of international business.
How much capital does an export business need and what are the ways to raise it?
The funds required to start an export business vary greatly depending on the scale of the business, items, market selection, logistics costs, etc.
Generally speaking, there may be initial costs such as:
1. Product purchasing and manufacturing costs
2. International transportation costs (shipping, air transportation, etc.)
3. Insurance costs
4. Import/export-related documentation and fees
5. Export/import taxes/duties
6. Warehousing/storage costs
7. Market research and marketing expenses
8. Compliance costs to adapt to each country's regulations
9. General and administrative expenses for business operations (office, staff salaries, etc.)
There are the following types of financing methods:
1. Own funds: Use the funds you have on hand, such as personal savings or profits from existing businesses, to fund your startup.
2. Bank loan: This is a method of obtaining a loan from a financial institution based on your business plan.
Your repayment ability will be examined.
3. Crowdfunding: A method of introducing a project or business plan on the Internet and collecting funds from an unspecified number of people.
4. Venture Capital: You may be able to secure significant funding by investing in startup companies that are expected to grow.
5. Angel investors: This is a method of raising funds from individual investors, and angel investors may be actively involved in the business.
6. Government support programs: Many countries have subsidy and loan schemes to help small and medium-sized enterprises export.
7. Product forward sales (presale): This is a method in which sales begin before a product is completed, and the proceeds are used for production and transportation.
The specific amount of funding varies greatly depending on the industry and business plan, and may require funds ranging from hundreds of thousands of yen to tens of millions of yen.
Regarding actual financing, it is necessary to consider the business plan and the conditions of the financing source.
The rationale is to provide convincing materials to investors and financial institutions, demonstrating the profitability, scale, and growth potential of the business through business plans and financial plans.
Another attractive point for investors is that we conduct sufficient market research and industry analysis to minimize risk.
How should we understand and prepare for laws and regulations and export procedures?
When starting an overseas export business, you need to pay attention to various laws and regulations and export procedures.
Below are the basic steps to understand and prepare for them.
1. Product and market research:
First, decide which products to export to which markets and research the import regulations and consumer preferences in those markets.
2. Check export regulations:
Check your country's export regulations.
This includes checking that the products you are exporting do not require specific permits or licenses or are on any prohibited export lists.
3. Understanding international trade law:
Become familiar with the laws related to international trade, especially WTO (World Trade Organization) rules, regional trade agreements, bilateral trade agreements, etc.
4. Understand the laws and regulations of the destination country:
Understand the laws and regulations of the destination country.
This includes import duties, taxes, import restrictions and standards for specific products, and any required labeling and packaging requirements.
5. Trade Compliance:
Consult with an attorney or trade consultant to establish an appropriate trade compliance program to comply with the laws and regulations of your home country and the importing country.
6. Preparation for export procedures:
Prepare necessary export documents.
This includes commercial invoices, waybills (B/L or AWB), certificates of origin, export licenses, packing lists, etc.
7. Selection of logistics and transportation companies:
Select reliable transportation companies and forwarders to manage logistics and transportation for exporting products.
8. Setting financing and payment conditions: We
determine the payment conditions for import and export (letter of credit (L/C), purchase guarantee, advance payment, etc.) and secure financing methods for export.
9. Product Quality Control:
Establish a product quality control process to ensure that the product meets safety and quality standards in the destination country.
10. Risk management:
Evaluate foreign exchange risks and trade risks (political risks, credit risks, etc.) and perform risk management by covering them with insurance.
Please refer to the materials and websites of the following organizations as evidence:
– Your country’s government agencies, such as the National Tax Agency, the Ministry of Finance, and the Ministry of Economy, Trade and Industry
– Your destination country’s customs and government-related websites
– International organizations, such as the WTO and the International Chamber of Commerce (ICC)
It is important to pay attention to official guidelines and updates provided by these organizations to stay informed.
It is also effective to utilize networks such as local trade organizations and chambers of commerce to gather information and receive support.
What sales channels should I use for my export business?
When building a sales channel for your export business, you need to consider the following points when creating a strategy.
1. Market research:
First, research the overseas markets where your products and services are in demand.
It is necessary to carefully analyze the target countries and regions, consumer needs and preferences, local laws and regulations, and the competitive situation.
This information forms the basis for market selection.
2. Trade agreements and regulations:
Research trade agreements, tariffs, and import/export regulations between your country and the countries you are exporting to.
This allows you to understand export costs and choose cost-effective sales channels.
3. Choice of distribution channel:
There are various distribution channels such as direct export, indirect export through agents, and joint ventures.
Understand the advantages and disadvantages of each, and consider whether it fits the characteristics of the product and your business model.
4. Utilize e-commerce:
Online sales are suitable for startups because they can sell to a wide range with a small initial investment.
You can consider using major marketplaces like Amazon or starting your own online shop.
5. Take advantage of exhibitions and trade shows:
By exhibiting at industry exhibitions and trade shows, you can directly contact many buyers and agents.
Here you have a chance to promote your products and expand your sales channels.
6. Networking:
Gather information and develop sales channels by participating in industry organizations and building business networks.
It may also be beneficial to seek advice from international trade experts or experienced business mentors.
7. Social media and digital marketing:
Leverage social media platforms and search engine advertising to reach your target market and customer base.
Increasing your online visibility increases brand awareness.
8. Understand local culture and customs:
Understanding the language, culture, and social customs of the country you are exporting to is essential to building successful business relationships.
The rationale for each point is based on examples of successful export businesses and best practices derived from trade research.
Market research and consensus data are solid sources of information and should be used to inform decisions.
Choosing the best sales channels for your products and services requires a comprehensive analysis of this information and strategic planning.
Steady networking and building partnerships are also important for developing sales channels.
