Recommendations for the beginner exporter
Introduction
Currently, due to globalization, the majority of countries, including Mexico, have integrated into international trade, promoting the elimination of barriers and opening up a series of opportunities for entrepreneurs to expand their markets and venture into exports. In order to carry this out successfully, entrepreneurs who wish to start exporting must inform themselves and prepare in all aspects involved in marketing their products abroad, taking into consideration the aspects mentioned here.
What is exportation?
Exportation is the sale and transportation of national or naturalized goods for use or consumption abroad.
Mexican legislation provides for two types of exportation: definitive and temporary. The former implies the permanent exit of goods, while the latter involves the eventual return of goods to the country of origin.
Individuals and companies decide to export to take advantage of the conditions of the foreign market and the benefits it entails. As a result of a possible high demand for their products in the destination market, or because producers in the destination market are less competitive, or because consumers in the destination market seek a greater variety and quality of goods, the exporter can enter new markets and increase their income.
In this context, countries have become interdependent in the globalized economy, leaving behind the model of self-sufficient economies. Hence, our country has signed numerous free trade agreements, opening up a wide range of opportunities for exports, from which Mexican entrepreneurs can benefit.
Therefore, the main advantages of exportation are:
- Enhancement of the company’s competitiveness.
- Improvement of the company’s image.
- Optimization of production capacity utilization.
- Increase in income due to higher sales volumes.
- Access to and diversification of new markets.
Most common mistakes of the beginner exporter
Despite the significant facilities and support available today for foreign trade, export operations are not something to be taken lightly, without being properly informed and prepared, and without complying with all legal, customs, and commercial requirements.
However, many beginner exporters do not adequately gather the necessary information and do not prepare properly, leading to the common occurrence of some of the following errors:
- Entering the export business haphazardly, without strategic planning.
- Confusing the quality of samples with the actual quality of the products.
- Relying on assumptions rather than concrete data.
- Lack of knowledge about foreign business culture.
- Providing quotations without considering specific details.
- Ignoring potential setbacks that may affect the timeliness of deliveries.
- Not accounting for the time needed to adapt and learn.
- Neglecting written documentation and signed agreements with intermediaries or clients including approvals of specifications, samples, delivery dates, etc.
- Handling exclusivity in commercial agreements improperly.
- Failing to recognize that a quality system must be preventive, not just corrective.
- Partially fulfilling orders.
- Ignoring weather conditions during transportation.
- Lacking an export pricing strategy.
- Not clearly defining the boundaries between production and marketing activities in exportation.
- Failing to diversify the client portfolio abroad, overly relying on just one.
- Over-reliance on the client for product design and development.
- Not researching market trends.
- Failing to support quality inspections of both the product and the process.
- Lack of discipline in standardizing styles.
- Not adequately calculating the commitments made.
- Not verifying if the brands, denominations, and graphic representations used on the products are registered in the target countries.
Recommendations for the future exporter
In this context, it is important for the future exporter to consider the following essential aspects that are fundamental for any company seeking to establish lasting and profitable business relationships:
- Familiarize oneself with the production process.
- Understand the legal framework that applies to the product intended for export.
- Precisely comply with all agreed terms regarding price, quality, delivery times, documentation submission, and payment method, among other aspects.
- Ensure that samples are representative of the product to be exported (sending the best piece is not suitable if they do not accurately reflect the shipment).
- Demonstrate flexibility and agility in decision-making, maintain constant communication with the client, and offer after-sales services.
- Know the tariff and non-tariff regulations and restrictions of both the country of origin and the destination country to which the products to be exported are subject (for example, in the case of agricultural products, strict national and international phytosanitary regulations must be complied with, and specific certificates and permits must be obtained, such as the International Phytosanitary Certificate).
Conclusion
Initiating foreign trade operations undoubtedly presents companies with a new panorama, helping them discover their weaknesses and assert their strengths. The beginning of foreign trade practice raises new specific questions about the company’s commercial operation, which will require adjustments, preparation, and time. But there is no cause for concern; in business, guaranteed success lies not with those who arrive first, but with those who are best prepared. UPLAW Abogados | Attorneys-at-Law is here to assist you and provide legal guidance and support in this process, so that you can successfully export your products. To this end, we have prepared The Essential Legal Guide for Exporting Products from Mexico, which you can download for free by clicking here.
By Director Manuel Mansilla Moya
UPLAW Abogados | Attorneys-at-Law
www.uplaw.com.mx
