Finding an Export Product

  • Introduction
  • Key Factors in Products Selection

Introduction

A clear understanding and detailed knowledge of the products to be exported is a critical factor in any export business. The product chosen must be in high demand in the countries to which it will be exported. Before making a decision, take into account the various government policies associated with the export of a specific product.


Whether a company is exporting for the first time or has been in the export trade for a long time, it is preferable for both groups to be methodical and systematic in identifying a suitable product. It is not enough to have all necessary data 'in your head,' but it is also necessary to put everything on paper and in a structured manner. Once this task is completed, it will be much easier to identify gaps in the collected data and take the necessary corrective actions.


In the international market, some products sell more frequently than others. It is not difficult to locate them using various market research tools. However, such products will invariably have more sellers, resulting in increased competition and lower margins. A niche product, on the other hand, may have less competition and a higher margin, but it will have far fewer buyers.

The truth is that all products sell, albeit to varying degrees, and there are advantages and disadvantages to both popular and niche products.



Key Factors in Product Selection



  • The product should be manufactured or sourced to be of comparable quality to your competitors. ISO or equivalent certification aids in the sale of a product on the global market.
  • Avoid products that have a monopoly of one or a few suppliers if at all possible. If you are the manufacturer, ensure that sufficient capacity is available in-house or that you have the resources to outsource it quickly. In the export business, timely supply is critical to success.
  • The price of the exported product should not fluctuate frequently, as this could jeopardize the export business's profitability.
  • Strictly check the government policies related to the export of a particular product. Though there are very few restrictions in export - it is better to check regulatory status of your selected product.
  • Carefully study the various government incentive schemes and tax exemption like duty drawback and DEPB.
  • Import regulation in overseas markets, specially tariff and non-tariff barriers. Though a major non-tariff barrier (textile quota) has been abolished - there are still other tariff and non-tariff barriers. If your product attracts higher duty in target country - demand obviously falls.
  • Registration/Special provision for your products in importing country. This is specially applicable for processed food and beverages, drugs and chemicals.
  • Seasonal vagaries of selected products as some products sell in summer, while others in winter. Festive season is also important factor, for example certain products are more sellable only during Christmas.
  • Keep in mind special packaging and labeling requirements of perishable products like processed food and dairy products.
  • Special measures are required for transportation of certain products, which may be bulky or fragile or hazardous or perishable.