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Export Expenses - What to Expect When You Sell Internationally

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Export Expenses - What to Expect When You Sell Internationally

By NicoleD
Published: July 14, 2010 Updated: March 3, 2014

Exporting can allow your business to tap into new markets and increase sales. However, there are important financial factors to consider before you make the leap. An honest assessment of expected exporting costs can save you time, effort, and money to ensure that your business export-ready.

 

The most obvious exporting expenses are the costs associated with moving your goods to your international customers. Research the costs and schedule associated with each method of transport (air, sea, land), taking into consideration the physical characteristics of your goods (size, weight, packaging) and the frequency or deadlines that you require.

 

Aside from your actual shipping expenses, there are other important costs to consider:

 

Market research expenses;

In the early stages of your planning, you will need to determine if it is financially feasible to enter a new international market. Luckily, the government provides several free resources to help small businesses identify and research international markets. Business.usa.gov/export recommends that new exporters use the U.S. Commercial Service Market Research Library (MRL) for detailed analysis of a selected country's commercial environment, including, market, economic, and political conditions, best export sectors, trade regulations, investment incentives, finance techniques, upcoming trade events, marketing strategies, services for exporters, and business travel tips. Additionally, the 2009 Edition of the Export Program Guide provides detailed information on market research programs, export finance, insurance, performance quality including health and safety certifications, licensing, and trade promotion events.

 

Travel and communications expenses -

Conducting business abroad may require international travel to visit prospective business partners or clients. Business.go-s Business Travel Guide provides resources that help you find the paperwork you countries will need for traveling. Even if you do not travel overseas, you may need to establish international calling plans or acquire the services of translations specialists.

 

Expert advice and assistance expenses-

Consider whether you will hire experts like freight forwarders, exporting consultants, or foreign representatives to ease your transition as a global seller. I's also common for exporters to seek legal guidance from an attorney specializing in international trade. Knowledge comes with a price tag though, so account for the costs associated with expert advice in your planning.

 

Export insurance expenses -

According to business.usa.gov/export, international export shipments are usually insured against loss, damage, and delay in transit by cargo insurance. Arrangements for insurance may be made by either the buyer or the seller, in accordance with the terms of sale. Exporters are advised to consult with international insurance carriers or freight forwarders for more information.

 

Licenses, paperwork and documentation expenses -

Do't forget about the costs associated with preparing common export-related documents, such as your certificates of origin, and other certificates for shipments of specific goods. If you are required to obtain export licenses and temporary shipment documents, you may incur additional costs.

 

Tariffs and taxes -

A tariff, also known as a duty, is a tax levied by governments on the value of imported products. Sales tax, state taxes, and customs fees are other expenses you may encounter depending on where and what you are selling. Before you export to any country, you need to determine what the tariff rate is on your product(s) as well as any import fees for that country. Business.usa.gov/export provides detailed guidance on calculating tariff rates.

 

 

Help is available

Selling your products overseas may seem overwhelming at first, however, there are a number of government programs that offer training, counseling, and financial assistance to small businesses wanting to export their products and services. Visit Business.go's Small Business Export Guide for tips and guidelines on for selling your products overseas.

 

If you plan to start your own shipping business, read this Business.gov article for more tips and information: Get Started in Shipping - Regulations for Importers and Exporters

 

 

 

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Comments:

Thanks for the post. It's a basic list to check before making any decision in international business.
hey thanks for sharing that post about export selling and purchase info. Finger Lakes Region
hey dude...cool post...sharing is good way to expose the subjects and give to the world..! Gaming Marketing Solutions
Do the measures remain same..when we are selling Nationally..? Online Hacking
Nicole, this is the second post by you that I am browsing through...! thanks for those useful links...!
hey thanks for your tips and suggestions.. they are really helpful Poker News
I have only done importing, but exporting is something we are looking at doing and this website is the place for us to get good advice. Blackberry case ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
My family used to export tires to south america, it was a difficult experience since over there many customes employees expected to receive bribes to do their job, and when bribes were denied, they would 'lose' paperwork, get difficult and so on.   They finally found honest people but it was not easy.
I think for exporting it's important to first achieve a critical mass, without which a business might just loose more than it ought to.
There are custom duty, which has to be taken care by the exporter when people do International business.

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