Asia Desk Blog

Many companies are thinking about importing today as the overseas commodities look much cheaper. Before you move further, however, you might want to make sure the goods are indeed cheap enough to make business sense for your company. When you think about cost, it has to be the total cost, instead of just the manufacturing cost, FOB cost, or CIF cost. It should be the overall cost that will occur with your importing business, which includes all the overhead expenses. Plus, you have to make sure you have an achievable profit margin. If not for short-term, then you may need to define the long-term objectives and make sure you have a solid plan to get there. Some businesses may also need to consider opportunity cost. What are you going to lose because of the importing business? After you finish all the number exercises you might find the opportunity is not as profitable as it initially appeared.

In most cases the cost test is not the end of the exercise. International trade is much more risky than the familiar domestic business. Background checks are much more difficult, as data is hard to collect and the sources may be less trustworthy. Communication becomes less convenient because of the language and culture barriers, as well as time zone differences. Business culture is different and overseas vendors might not have the same integrity level as an average United States firm. In the U.S., we celebrate when we sign a contract with a vendor or distributor because we have a better legal system. In many other countries, where legal enforcement systems are weak, a contract might be the starting point for many troubles. The shipment you receive might be much different from the sample that the vendor sent to you earlier. The delivery might be a little later than the one upon which you both agreed. This is not to intimidate you from importing. The point is that one should think beyond usual costs for international business.

Today, there are some excellent b2b sites which provide matchmaking services and information for importers. Two of the more popular sites are alibaba.com and globalsourcing.com. As informative as they are, there is no way that modern information technology could replace the human factors in the business world. At the end of the day, it still comes to the point of whether or not you can trust the company, and it takes time to get there. For starters, just be cautious and patient.

There are also many rules and regulations of both the U.S. and exporting countries that one needs be aware. The Importing Guide in this web site is an excellent starting point. Competent freight forwarding firms can be very helpful as well. Of course, all businesses are always welcome to contact WTCSD for assistance.

From time to time, we receive phone calls and inquiries from business owners and entrepreneurs on how to start exporting. While there is neither an easy answer to the question nor a recipe for a successful export program, a good export plan can dramatically increase the chance of success.

The first and most important area you should look at is your products and/or services. A good product for the domestic market doesn’t necessarily mean a good market prospect in a foreign country. We often hear people talking about great market potential in Asia, but it might not be the case for a specific product. It is crucial to make sure you have a viable market before you invest you time, money and energy.

The second step is a comprehensive study of the target market. You want to understand the context of the market – target customers/clients, distribution, logistics infrastructure, business culture, history, political environment… It is often challenging to collect the necessary data and information about a foreign country, especially where the native language is not English. The Internet and powerful search engines can be very helpful. You can also find valuable information from World Trade Centers. The Trade Information Packet (TIP) developed by World Trade Center San Diego could be an excellent starting point. You can also find information about hundreds of foreign markets at our Trade by Region section.

If you are still optimistic after the first two steps and if the upper management is committed, you can start to work on your export plan. You need to define objectives, formulate strategies for market entry, marketing, distribution, identifying potential partners, and generate a budget that can address short-term needs and long-term development. You should also set up milestones and timelines for implementation. Last but not least, you always need to keep your plan flexible and resilient enough to cope with the new and changing business environment in a foreign destination.

Please check our Exporting Guide section for detailed information which might assist you in your planning process. You can always post your comments and questions here to receive our response and opinion quickly.

After sampling catered Asian cuisine, attendees of the ABDS sat down to hear speaker Jane Booth with High Street Partners, address the topic of How to do Business in Japan.  Following the presentation Nicole Sahin answered any questions or concerns the audience expressed with regards to the presentation.  Afterwards, attendees took advantage of a full room by further networking with fellow attendees.

 

Comments on useful information from attendees:

In general, great information on Business in Japan, Alejandro Osuna, Osuna Gonzalez y Asociados, S.C

Perspective on the importance of cultural traditions when doing business in Japan, John Tucker, Southern States Univ.

General tips applicable to expansion to other states and countries, Robert Tepper, Southern States Univ.

 

  

                                                                                 Speaker Jane Booth

  

                      Nicole Sahin

Seventeen business delegates, representing 14 companies, and one government official participated on the Mission and in the 2009 China International Fair for Investment and Trade (CIFIT) in Xiamen. The mission was organized by the WTC in partnership with Team California, the San Diego Regional and the Imperial Valley Economic Development Corporations.

The goal of the WTC CleanTech Trade Mission was to provide a forum where San Diego’s economic development stakeholders and international community’s market representatives could facilitate collaboration and identify potential environmental economic development opportunities for “sustainable” business development in the 21st century. Other objectives included identifying the need for specific projects, products and services that can strengthen economic development and expansion of trade in fields ranging from foreign trade zone development to agriculture, automotive manufacturing, and accounting and real estate services. These goals were achieved!

The mission’s first stop was Hong Kong where delegates were briefed by Hutchison Port Holdings on activities at the second largest port in the world. The next meeting was hosted by the Hong Kong Trade Development Council, the global marketing arm and service hub for Hong Kong-based manufacturers, traders and service exporters, with more than 40 offices around the world. The U.S. Foreign Commercial Service in partnership with the Hong Kong Special Administrative Region Environment Bureau shared information on clean tech and sustainable energy developments in China. “China’s rapidly emerging clean technology sector is why it’s vital we bring the San Diego region to their attention. With its abundant natural resources such as wind, solar and water, San Diego provides the perfect climate for advancements in technology,” said Bella Heule, WTC President and CEO.

The delegates also traveled to Shenzhen in Guangdong province for an on-site tour of BYD Company Limited, which is China’s leading IT and Auto manufacturer specialized in rechargeable batteries, and employing 130,000. “I was excited to share information on why the CaliBaja Bi-National Mega-Region concept might provide a solution for BYD in their search to establish a U.S. operations base,” stated Christina Anne Luhn, Ph.D., Director Mega-Region Initiative, San Diego Regional Economic Development Corporation.

Companies participating on the mission included the California Center for Sustainable Energy; ITC Diligence, Inc.; Hutchinson and Bloodgood, LLP; McMillin Realty, Inc.; International Environmental Solutions; DDH Enterprise; San Diego Regional EDC; Imperial Valley EDC; and the Imperial Valley Joint Chamber of Commerce.