Are you considering trading overseas in 2023?

International business involves exchanging goods and services between different countries. It’s a good option for businesses that are reaching their capacity in the UK market. 

 

For some businesses, the upsurge in ecommerce during the pandemic meant they started selling overseas without a specific plan. If you were amongst them and want to make sure your international success continues, here are some things to consider. 

 

Broadening your marketplace can increase revenue and cashflow and currency exchange rates could be beneficial too. By trading in new markets, you can access new distribution partners and suppliers and qualify for export financing options. 

 

You could also increase productivity. Government statistics show businesses involved in the international trade of goods can be up to 70% more productive than those who don’t. You will significantly increase your potential customers, but you will also need to be ready to meet demand. 

 

By undertaking a risk assessment, you can gain a clearer view of whether continuing to rely on the UK market will limit your opportunities for growth versus the potential for sales in other countries. With different market growth trends and economic performance, selling in other countries could help spread your risks. 

 

Exchange rates can work in your favour, although there are also risks associated with currency fluctuations, so a realistic view for the short- and medium-term will be needed. 

 

By trading internationally, you will increase the complexity of your business. This might include your logistics and goods handling requirements, local laws and tax regulations. 

 

You will also need to research your market carefully. It’s unwise to assume you can simply translate your product offer into another language and sell successfully in another country. Factors to consider include the local economy, market trends, consumer behaviour and preferences, and any policies and laws that could affect your business. 

 

Local knowledge can help you avoid the potential pitfalls of selling overseas. There are a number of organisations that can help, including: 

 

Before starting to trade overseas you should obtain accurate and verified information about your trading partners including their organisation’s structure and financial status. However, many databases of international businesses are updated periodically, even monthly or quarterly, so don’t be in a rush. 

 

You will want to confirm that they are legitimate and financially stable and take care when extending credit arrangements in the first instance as cross-border debt collection is complex. Credit worthiness is determined differently around the world, ranging from percentages to points systems, so it’s important to understand what your reports are telling you. 

 

As part of your due diligence process you can access company and credit information online for many of the UK’s common trading partner countries. This will speed up the process of confirming that overseas companies are suitable partners. 

 

Please get in touch if you would like our help to collect information about overseas markets.