Importing and exporting can seem complex. International trade comes with rules and policies that completely differ from domestic trade. It’s easy to get confused when choosing your International Commercial Terms (incoterms) or misunderstand the different customs procedures in foreign ports.
Just one-third of the 30 million US small businesses export, according to the US Chamber of Commerce. These small businesses are often intimidated by the intricacies of cross-border trade. In our recent Alibaba.com US B2B Small and Medium Business (SMB) Survey, we asked 5,015 US B2B SMBs what their primary barriers are for going global. Lack of market knowledge, lack of international customers, and the high cost of exports were the key reasons these businesses avoided cross-border trade. But exporting is an essential way to grow your business.
If you’re only selling domestically, you’re limiting your total potential profits. Approximately 95% of the world’s consumers live outside of the US. Only selling in the US means only tapping into a small share of customers. It also means relying on one market. Focusing on just the domestic market makes your business vulnerable to economic downturns, seasonal demand, and competitive pressures. Exporting allows you to diversify your risk. When one market begins to falter, you still have growth opportunities in other markets.
In fact, to emphasize this point, we asked the B2B SMBs participating in our survey how optimistic they feel about their own business. We found that the B2B SMBs who have gone global have a significantly more positive outlook: 88% of the SMBs who export are somewhat or very confident about their business compared to 77% of the SMBs who do not export. We also asked how optimistic they feel about the US economy and found similar results. 76% of the businesses who export are somewhat or very confident about the economy compared to 54% of the businesses who do not export.
Despite a rocky year full of supply chain disruptions, global small businesses remain resilient and optimistic — as they should. The initial exporting dip in early 2020 due to the COVID-19 pandemic continues to recover. Trading Economics reports that “Exports from the United States increased by [US] $4 billion to [US] $182 billion in October 2020, the highest level since March.” HSBC projects US exports to grow 6% a year through 2030. They also forecast exports to both China and India will average 9% annual growth over that same time period.
Much of this growth is thanks to ecommerce and developments in technology. Cross-border trade was once dominated by large or multinational companies who had the funds and flexibility to export. These days, it’s a level playing field. Businesses of any size have access to global B2B ecommerce marketplaces, sophisticated shipping and logistics services, advanced financing options, real-time translation tools, and more. Any business serious about growth now has the tools to export, whether you’re a global company with thousands of employees or a small business with a team of one.
Daniel Rosenfield founded Totally Products, a Florida-based vitamin and supplements company, with a focus on domestic markets. International orders only accounted for 1% of his sales. He began selling on Alibaba.com to penetrate international markets and build brand awareness on a global scale. Daniel’s Alibaba.com digital storefront helped him transform Totally Products into a private label, wholesale business with 35% of its sales coming from international buyers.
No small business is too small to export. International trade can seem complex, but it’s never been easier for SMBs to go global. Take advantage of ecommerce and breakthrough technologies to take your business to the next level.
This week's #B2BTuesday Tip:
When deciding on a product to export, do your research. Make sure no policies or customs regulations prevent you from exporting to your destination countries.