1. Is my company "export-ready"? What factors should I consider when making the decision to export? 

2. Where can I go to get help relating to financing my export activities?

3. How can I determine the country or markets that are best for me?

4. How do I conduct market research that will provide me with information on a specific country and/or industry?

5. What is the difference between indirect and direct exporting?

6. How can I determine if I should export on my own or use an export intermediary to help me?

7. What documents do I need to export my goods?

8. How do I minimize the risk of not getting paid by a foreign buyer?

9. How much will exporting cost?

10. What duty, tariff, or quota, will be applied to my product in a specific country?

11. Can I insure my patent or trademark will protect me in an international market or markets?

12. Will I have to adapt my product or packaging if I am going to sell it in a foreign market?

13. Where do I find information on foreign regulations, standards or certification requirements for my product?

14. Do my products require an export license?

15. How do I determine the Harmonized Tariff System (HTS) number for my products and why is it necessary?

16. How can I find information on US and foreign trade statistics?

17. Where can I find information on trade sanctions?

18. Where can I find information on Freight Forwarders and Export Management Companies servicing this region?

19. How can I obtain information on a specific business in a foreign country?

20. How can I find out more about legal issues in a particular country?

21. Do I need an export market plan?

22. How do I reduce the chance of my business losing money due to currency fluctuations?

23. Where can I find information relating to importing goods into the US?

24. Are there any special programs available that help exporters my industry?

25. Should I participate in international trade shows and trade missions?

26. How do I maximize trade leads to increase my exporting business?

27. How can I locate and qualify potential distributors in overseas markets?

28. What are INCOTERMS and why do I need to understand them?

29. Is signing an exclusive representation and distribution agreement the same in a foreign country as the US?

30. Where can I get translations?

31. How do I decide on the price for my products in overseas markets?

32. What is "Grey Marketing"?

33. How do I determine the costs of shipping to a foreign country?

1. Is my company export ready? What factors should I consider when making the decision to export?
To help determine if your company is ready to export, RMB has developed an export readiness assessment tool that will take approximately 15 minutes to complete. It will ask questions that have been designed to help you consider how well you understand fundamental factors associated with exporting. If you are already exporting, it will help to identify resources and provide information  that may help you to export more effectively.  You will receive a score and feedback upon completing  the questionnaire, which will help to assess export readiness, as well as identify areas that your business needs to strengthen to improve its export activities.

It is important to note that many businesses jump into the global arena without really taking the time to consider whether or not it makes sense to do so. Although exporting has become a lucrative activity for many companies, you need to begin by making a number of critical decisions that will be necessary in order to successfully expand your market outside the USA. Exporting requires a significant investment in order to understand different legal systems and ways of doing business, as well as identify and qualify potential buyers, make the necessary product or packaging modifications, or change elements of the marketing mix.

In addition to the export-readiness assessment tool,  the Basic Guide to Exporting which has been modified for use by RMB clients can be found under the International Business Guides section of the RMB site.  Developing an Export Strategy and Management Issues Involved in the Export Decision sections of this guide provide a good overview of some the factors that need to be considered when making the decision to export.  In addition,  The Small Business Administration (SBA) publication, "Breaking Into The Trade Game" is recommended for new-to-export businesses. It offers a step-by-step guide to the exporting process from developing an export strategy and doing market research to identifying buyers and financing. RMB also links to specific guidelines for Agricultural Exporters and Importers through the Foreign Agricultural Service Website. 

2. Where can I go to get help relating to financing my export activities?
The first source you should approach to discuss export financing should be your regional or local bank.  They may not have specific programs directed at financing exports.  However, as long as you have a good export plan, they may be able to fund you in the similar way to any other business expansion or business development activity.  Our partners, Wells Fargo Bank and Montana Business Capital, may also be able to provide you with loans. There are also several federally funded programs that help finance export activities. Details of these programs can be found at RMB™s Financing Exports Solution Center.

3. How can I determine the country or markets that are best for me?
Most companies don't have the resources to focus on the whole world at once and therefore need to decide on the countries or regions that will give the greatest potential for success.  The A Step by Step Approach to Market Research section of the Basic Guide to Exporting illustrates one way of screening potential markets, assessing target markets and drawing conclusions. The RMB Country/Industry Specific Solution Center also contains a large number of resources that RMB has identified that will help local businesses learn about the business environment and industries in other countries.  It is important to remember that while secondary sources of information such as those described in the Solution Center will provide important background information on a industry and country, you will also need to conduct, or contract someone else to conduct primary research to assess price and competitive levels, identify and qualify distributors or buyers and develop a marketing mix.  Primary research is usually costly in terms of both time and other resources. Some companies choose to hand over the management of this process to a reputable Export Management Company. 

4. How do I conduct market research that will provide me with information on a specific country and/or industry?
RMB™s Country/Industry Specify Solution Center offers a wealth of product-and country-specific research. Country Commercial Guides provide a comprehensive view of a selected country's commercial environment, while Industry Sector Research reports offer in-depth profiles of selected industry subsectors. Top Targets for Trade and Best Prospects for US Agri-Food Exports quickly pinpoint high potential markets for selected U.S. industries. Our Country/Industry Specify Solution Center also provides links to many other useful websites including The Economist Country Briefings, Ex-Im Bank Country Fact Sheets and Ernst and Young Country Passports. In addition, many countries maintain their own web pages with business information specific to that country. Our Foreign Embassies in the United States Solution Center will help link you into some of these resources.

5. What is the difference between indirect and direct exporting?
When you export indirectly, you engage the services of an intermediary firm such as an Export Management Company, Export Trade Company, or International Trade Consultant that is capable of finding markets and buyers for your products.  These partners will have well established expertise and trade contacts, but will still allow you to retain high levels of control over your international marketing mix.  When exporting directly, the exporter personally handles every aspect of the exporting process from market research and planning to foreign distribution and collections.  This approach is the most difficult and ambitious and therefore takes a significant commitment of management time and other resources (See Question 9).  For larger companies, and over the longer term,, direct exporting may, however, be the best way to maximize profits and long-term growth potential.

6.  How can I determine if I should export on my own or use an export intermediary to help me?
For new or small exporters it is often wise to work with an export intermediary such as an Export Management Company (EMC) who will assume responsibility for finding and qualifying overseas buyers, shipping products, getting paid and many other elements of your export strategy. Many companies with little export experience and expertise who do not have a detailed understanding of business conditions in overseas markets find that the cost of working with an appropriate EMC, is lower than the cost of exporting directly. EMC™s will often charge a retainer for the services they provide, as well as add a margin to any goods they sell on your behalf. 

7. What documents do I need to export my goods?
When preparing to ship a product overseas, you need to be aware of packing, labeling, documentation, and insurance requirements.  Documentation must be precise because slight discrepancies or omissions may prevent payment or customs from clearing the goods.

Even experienced exporters should seriously consider having a Freight Forwarder or Export Management Company handle the formidable amount of documentation that exporting requires; as they are specialists in this process. More information on export documentation can be found in the Basic Guide to Exporting.

8. How do I minimize the risk of not getting paid by a foreign buyer?
An exporter should always evaluate new international customers with care as well as continuously monitor older accounts. A small business exporter's principal concern should be to ensure that he or she will be paid in full and on time. Foreign buyers may have concerns as well, including uncertainty that the goods ordered will meet the necessary specifications and arrive in a timely manner. As a result, it is imperative that the terms of payment be agreed upon in advance and in a manner satisfactory to both parties.

The payment method used can significantly affect the financial risk an exporter faces. In general, the more generous the sales terms are to a foreign buyer, the greater the risk to the exporter. The primary methods of payment for international transactions, ranked in order of most secure to the exporter to least secure, include:

• payment in advance
• letters of credit
• documentary collections (drafts)
• consignment
• open account

9. How much will exporting cost?
Exporting is like any other business expansion decision and needs to be thought of as an investment rather than a quick way to increase profits.  Many companies begin export activities haphazardly, and don't develop an international business plan or budget that outlines export the costs (in terms of both time and money) and potential sales.  While these companies may or may not have a measure of success, they may overlook successful export opportunities and find that the investment necessary to be successful exporters is considerably higher than was expected.

10. What duty, tariff, or quota, will be applied to my product in a specific country?
In order to determine a specific tariff, you must first classify your product according to its Harmonized System Number, also known as Harmonized Tariff Schedule or H.S. Schedule (if you don™t know how to do this please go to question 15).  You can than use Internet websites to find out more about import tariff, tax and other customs information.  RMB™s tariff and tax information business tool will link you to US Department of Commerce Tariff and Tax information portal which can be used to link directly onto the tariff websites of individual countries. You can also call 1-800-USA-TRADE for country-specific duty rates based on known HTS numbers.  For official rates, it is always best to contact the country's Customs Authority directly.

11. Can I ensure my patent or trademark will protect me in an international market or markets?
A US patent or trademark, does not automatically protect you in other countries.  No international treaty completely defines patents; trademarks, copyright law or other forms of intellectual property, because the laws of various countries often differ from one another significantly.  There is, therefore, no such thing as a truly international trademark, patent or copyright.  To secure rights in another country you usually have to apply for a patent register or trade mark in each country you plan to enter.  More information on international patents and trademarks can be found in “Intellectual Property Considerations” section of the Basic Guide to Export.  Several other useful resources relating to patents and trademarks can be found in RMB™s legal solution section. These include links to the United States Patent and Trademark Office, the World Intellectual Property Organization, the European Patent Office, and the European Office for Harmonization in the Internal Market (Trade Marks and Designs).  It is always wise to work with a reputable patent attorney with international experience to protect your patent and trademarks in international markets. Be sure to contact one before embarking on the exporting process, and preferably in conjunction with new product development. 

12. Will I have to adapt my product or packaging if I am going to sell it in a foreign market?
A US company that manufacturers branded products is likely to have to modify its product or packaging to conform to government regulations, differences in engineering and design standards, geographic and climatic conditions, different buyer preferences or to facilitate shipping.  More information on various types of product changes that may be required such as labeling, packaging, or warranty and service requirements can be found in the Preparing your Product for Export section of the Basic Guide to Exporting.

13. Where do I find information on foreign regulations, standards or certification requirements for my product?
There are numerous sources of information on foreign regulations, standards and certification requirements for products. Many of these can be found in RMB™s Country/Industry Specific Solutions Center where the Commercial Service's Country Commercial Guides and Industry Sector Research reports are particularly useful.  FAIRS (Food and Agricultural Import Regulations and Standards) reports published by the FAS are equally helpful. 

14. Do my products require an export license?
Most goods do not need a license and can be cleared by entering "NLR" (no license required) on the Shipper's Export Declaration. Licenses are generally required for high tech or strategic goods or goods shipped to certain countries where national security or foreign policy controls are important. It is important to note that three main considerations are taken into account by BIS in determining the need for a license: 1. Product 2. country of destination 3. buyer and/or end user. Just because a product many not require licensing for a shipment to one county or buyer does not mean that licensing in unnecessary for all countries or buyers. Also be aware of the fact that some items which seem innocuous such as some types of computer software, may actually require licensing. It is the responsibility of the exporter to ensure compliance with U.S. exporting regulations. Proper care should also be taken to thoroughly investigate the legitimacy of buyers.  Their on-line Simplified Network Application Process (SNAP) allows you to submit export and re-export applications, high performance computer notices, and commodity classification requests via the Internet in a secure environment. 

15. How do I determine the Harmonized Tariff System (HTS) number for my products and why is it necessary?
The Harmonized System Classification is a standardized numerical method of classifying traded products. This 10 digit identifying number is assigned to each product and used by customs officials in most countries around the world to determine the duties, taxes and regulations that apply to the product. The first six digits are harmonized throughout the world. The last four digits vary by country.

16. How can I find information on US and foreign trade statistics?
The Trade Statistics Solution Center has been developed specifically to provide you with access to the links and resources that will help answer this question.  Knowledge of trade flows and export trends to various markets will help you determine the levels of demand for imports of the types of products you are considering selling internationally, as well as the levels of competition from other exporters in a specific market.

17. Where can I find information on trade sanctions?
The Office of Foreign Assets Control of the U.S. Department of the Treasury administers and enforces economic and trade sanctions against targeted foreign countries, terrorism sponsoring organizations and international narcotics traffickers based on U.S. foreign policy and national security goals. OFAC acts under Presidential wartime and national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze foreign assets under U.S. jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.  More information on current trade sanctions can be found in our legal solution center US Trade Sanctions as well as by referring to our Export Controls and Licensing business tool.

18. Where can I find information on Freight Forwarders and Export Management Companies (EMC's) servicing this region?
RMB™s Freight Forwarder Solution Center has a listing of several freight forwarders servicing this region who can facilitate international shipments. Some are also Customs House Brokers, allowing them to handle importation of merchandise into the US and inbound customs clearance as well. It is highly recommended that a relationship with a freight forwarder be established in advance of trying to arrange for any one shipment.  (For more information on freight forwarders including fees please also see the answer to Question 33: How do I determine shipping costs to a foreign country?)

Export Management Companies (EMCs) servicing the RMB region are relatively sparse. While not surprising given the small number of export ready companies existing in the region, it is unfortunate that so little help exists where so much is needed.  Indeed, many companies begin and maintain their international sales and marketing initiatives by outsourcing these functions to qualified EMCs.  In an honest assessment of core competencies weighed against overall corporate goals, many companies determine that their goals for international expansion would be best achieved by partnering with an EMC whose function is to pursue international business on behalf of its clients.  A portion of, or potentially all international sales and marketing functions from strategic entrance in new markets to management and expansion of existing markets can be achieved by partnering with the right EMC.  As in initiating a relationship with any new business partner, a careful assessment of value that each party brings to the table will aid in structuring reasonable expectations for both parties and in determining fair compensation for activities performed. 

In general, EMCs take ownership of products and resell them overseas, although some may take a commission on sales in certain instances. Some charge retainers for their services, while others do not. The amount of up-front work required to develop new markets may be the determining factor for the retainer. Finally, EMCs generally work with more than one (usually several) suppliers. It is in your best interest as a manufacturer/supplier to make sure that your EMC is keenly aware of your business strategy, existing products, and future lines so that they may offer feedback about the impact of international variables in your corporate equation and so that they may market your products most effectively overseas.  

19. How can I find information on a specific business in a foreign country?
There are many ways for you to research a foreign company before conducting formal business.  These methods include:

International Business Directories and Credit Reports such as those offered by  D&B, Hoovers and Thomas Register that can be found in RMB™s  International Company Search Solution Center.

International Banks.  Bankers have access to vast amounts of information on foreign firms and usually very willing to assist corporate customers.

Businesses References.  Ask the company you are dealing with for a list of business references including companies they are already doing business with in the US and follow up on these references yourself.

US Department of Commerce International Company Profile (ICP).  This program is only available for some countries, and provides information needed to assess the reliability of prospective trading partners. Information typically includes type of organization, year established, size, general reputation, territory covered, sales, product lines, principal owners, financial information, and trade references, with recommendations from on-site U.S.-commercial officers as to suitability as a trading partner. The results of your request will take 30-45 days and costs $500 per report. You can place an order for this service through your local Export Assistance Center (EAC).

20. How can I find out more about legal issues in a particular country?
In addition to complying with US export regulations, an exporters must understand how differences in legal systems and regulations will influence them in specific markets.  For new exporters, working closely with a reputable Export Management Company and Freight Forwarder will significantly reduce confusion in trying to understand all of the legal issues you will face when entering a new international market. 

RMB™s Legal Solution Center has links to a large number of resources that will help you find out more about international legal issues. The Export Legal Assistance Network (ELAN), is a nationwide group of volunteer attorneys with experience in international trade who provide free initial legal consultations (generally ý hour) to small businesses on export-related law matters. In addition, RMB™s Country/Industry Specific Solution Center contains a large number of resources that provide an overview of the legal frameworks and legal requirements that relate to exporting to specific countries.

21. Do I need an export market plan? 
Yes.  An Export Market Plan provides a structure and step-by-step roadmap for your export operations. If you don™t have a plan, you might not make the most of any opportunities that exist, or worse still, make costly mistakes. Remember that you will need a different plan for most markets or countries because not all markets can be approached in the same way.

An export plan should be thought of as your "Recipe For Export Success." It is a well-thought-out strategy for preparing your company, your product, and your marketing efforts to succeed in the export business.  As with good recipes, an export plan needs to include a specific, clear set of directions and to identify every step of the process. You may also need to modify your "recipe" a little, as you gain experience and examine your results.

In general, it can be said that an effective export plan:

• Is brief, to the point, and simple.
• Has specific goals and objectives.
• Is based on facts, not assumptions.
• Is developed systematically.
• Considers all options at each decision-making point.
• Has honestly described limitations, as well as strengths, in your business, your product, and your target market.

More information can be found in the Developing an Export Plan Section of the Basic Guide to Exporting.  Another excellent resource is the US Foreign Agricultural Services Guide to Creating an Export Plan which is one of our on-line business guides.  RMB experts can provide you with help in developing an export market plan.

22. How do I reduce the chance of my business losing money due to currency fluctuations?
The easiest way to minimize foreign exchange risk is to quote prices and insist on payment in $US. The burden of exchanging currency and risk are then placed on the foreign buyer. If the buyer insists on payment in a foreign currency, you should work with a banker before negotiating the sales contract. If your banker is unable to help you hedge against foreign exchange risk by agreeing to purchase the foreign currency at a fixed price in dollars, regardless of the currencies value at the time of the sale, consider contacting RMB™s partner, Wells Fargo Bank for assistance. Remember that banks will charge a fee for this service. You may want to add this fee to your price quotation.

23. Where can I find information relating to importing goods into the US?
The U.S. Government does not offer import promotion programs such as those available to U.S. exporters. However, there are alternative sources of information: For information on the procedures to import products, the US Customs Service publication Importing into the United States can found in RMB™s International Business Guides.  The guidebook provides lots of valuable information about factors such as import duties, and country of origin labeling. U.S. duties or taxes cannot be prepaid in a foreign country before exportation to the United States.

24. Are there any special programs available that help exporters in my industry?
Yes. The TIC or Trade Information Center provides a list of export assistant providers categorized by country and industry. In addition to these sites you may also find information on local programs for exporting on this page in the International Service Providers section. Your local or national trade industry association may also be able to provide you with industry specific information relating to exporting, importing, or the international marketplace.

The U.S. Department of Agriculture Foreign Agriculture Service (FAS) is the first point of contact for agricultural export advice and information on USDA export and marketing programs, foreign market research, trade data by country and commodity, trade policy and regulations, export sales, and trade leads. The Food Market Reports contain detailed analyses of various countries' agricultural markets. AgWorld Attach… Reports contain market research on a wide-range of commodities in many different countries. Finally, WUSATA, Western U.S. Agricultural Trade Association, funded by the USDA, has several programs designed to promote U.S. agricultural exports.  The World Agriculture Reports provide a world market analysis of various agricultural commodities.

25.  Should I participate in international trade shows and trade missions?
Yes, selectively. IF AND ONLY IF your company has the resources to:

1)      Promote your attendance in advance to potential and existing foreign partners;

2)      Spend on the actual cost of the trip/show and meetings associated with it;

3)      Follow up on the leads that are generated from the trade mission or trade show.

The cost of international travel, such as that required in a trade mission, is undeniably expensive, yet it should be considered a necessary investment for the future when the timing is right. When the timing is not right, or if you cannot address the three points above, then you are wasting your money and perhaps tarnishing your reputation with would-be foreign business partners by being unprepared.  There is little point to exhibiting in a trade show if you fail to capitalize on the tremendous opportunity that exists to solidify your relationships with existing buyers and to promote your business and products to new buyers at a trade show.  Likewise, if your company does not have the infrastructure or personnel to pursue the potential business opportunities that may be generated at a trade show or from meetings during a trade mission, then your money would be better spent elsewhere.

International business endeavors are time consuming investments. Yes, they can and should have tremendous pay offs, but those who think sales will be routinely consummated at initial meetings, whether at shows or during trade missions, will be sorely disappointed. Also, when selecting the trade shows or trade missions to attend, be sure that they are providing a value-for-money opportunity to reach your target market, whatever that may be.

The cost of trade shows is a strange reality in and of itself. Plainly, the best known shows (those typically attracting international attendees) are extremely expensive. Shipping materials to the show, getting them to your booth, carpeting, furnishing, building, wiring, cleaning your booth, feeding your captive employees at the show, etcăeverything, at trade shows is substantially more costly than it is in other real world environments. Do your best to fully investigate and anticipate the total costs of a show so that they may be realistically weighed against the benefit gained from attending. Consider “walking” a trade show (attending as a non-exhibiting observer) prior to exhibiting at a show. You will gain a better feel for the quality of show participants (other exhibitors, potential buyers, and media exposure) and for the overall value the show will bring to your company.  Also remember that even for small companies with modest booths, preparing for trade shows can be a full time endeavor for months prior to a show. This is a real and substantial cost that should be recognized. 

26. How do I maximize trade leads to increase my exporting business?
There are many programs and websites that are available where exporters can search for or post trade leads. Some of the most popular can be found at RMB™S Trade Lead Solution Center.In addition, many exporters or potential exporters receive a great deal of international interest through their website.