Exporting can be a great option for tapping into bigger markets. It can be an exciting endeavour and incredibly rewarding – but it can also be frustrating and financially risky. You can reduce the financial risk and uncertainty by doing adequate market research and pre-planning before leaping in.
If you’re thinking of tackling the international market, you’ll need to have some experience growing your business in the domestic market. This means having refined business practices that deliver your products or services to market as efficiently as possible.
Ideally, you’ll also have a good grasp of your target market and what marketing strategies work best for your business type. You should also have a healthy cash flow, which you’ll need to rely on until your overseas venture becomes profitable.
Before you start devising your export plan, you should do as much research as possible. New Zealand Trade and Enterprise (NZTE) has an excellent website for information on exporting and importing, as well as country-specific information. Foreign government or country-specific business sites could also be valuable.
Your local Chamber of Commerce is another useful source of information. Not only do they provide information and seminars to members at little or no cost, but their networking with Chambers of Commerce all around the world makes them a useful source of contacts.
Investigate the competition in your targeted foreign market. Visit the sites of competitors to identify any adaptations you might need to make to your product or service, and to see how they market and price their product or service.
There are also a large number of regulations in foreign markets that must be adhered to; the New Zealand Customs Service and freight forwarders can tell you about the requirements for different countries. Your local Chamber of Commerce can also help you with export documentation.
Cultural research and sensitivity to local customs can make the difference between winning a contract or not. Before you begin exporting, you need to have devised strategies to overcome any cultural or language barriers. For example, in some cultures, taking a business card without first studying it is considered disrespectful. Educate yourself on both the cultural and business dos and don’ts in your target country.
Export assistance (external link) — New Zealand Trade and Enterprise
Export Essentials Workshop (external link) — New Zealand Trade and Enterprise
On the basis of your industry knowledge, you’re likely to know where your core markets are, be aware of trends in the market likely to shape demand, and have a gut feeling about which markets hold the greatest potential for you.
Personal considerations will also play a part in making the decision – after all, you'll be required to visit the country frequently. But this shouldn't be the main driver behind your decision. Thorough market research should tell you where your best exporting opportunities lay.
Australia is the logical first choice for many New Zealand exporters because it’s close, English-speaking, politically stable, easy to reach and culturally similar. For many, Australia offers a test market before heading further abroad. Additionally, under Closer Economic Relations (CER), New Zealand-made goods are duty-free and highly competitive.
Distribution in the foreign market is greatly influenced by market size, the type of good or service, the desired amount of control and the wider export strategy. The different options to consider are:
Also worth considering:
Have a fresh look at the export potential of your business. If you’d like to explore the possibilities, remember these key points apply to most businesses.
Contact us (external link) — New Zealand Trade and Enterprise
If you export goods and services, you may face hurdles doing business with overseas customers, eg cancelling contracts or defaulting on payments, along with day-to-day issues, like managing working capital, securing bank guarantees or funding growth.
The New Zealand Export Credit Office (NZECO) provides a range of trade credit insurance and financial guarantees backed by the New Zealand Government to help businesses secure export sales, manage payment risk and access finance via your bank.
Find out more about available products on the NZECO website.