Are You Export Ready? Introduction to Exporting and the U.S. Commercial Service

1. Are You Export Ready? Introduction to Exporting and the U.S. Commercial Service Sara Moreno U.S. Commercial Service/Lexington 859.225.7001

2. The World is Open for Your Business. 95 percent of the world's consumers live outside the United States. Let the U.S. Commercial Service connect you to a world of opportunity.

3. International Trade Administration Export Promotion Services Protection against Unfair Imports

4. U.S. & Foreign Commercial Service

5. The U.S. Commercial Service. With offices throughout the United States and in U.S. Embassies and consulates in nearly 80 countries, the U.S. Commercial Service of the U.S. Department of Commerce’s International Trade Administration utilizes its global network of trade professionals to connect U.S. companies with international buyers worldwide. Our mission is to promote and protect U.S. commercial interests abroad and deliver customized solutions to ensure U.S. businesses compete and win in the global marketplace.

6. We Work with You to Connect Your Company with the Right Opportunities Abroad. Our experienced trade professionals help you enter international markets in the most efficient, targeted way. We assess your export potential, understand your needs, and provide the right mix of U.S. Commercial Service capabilities to achieve your exporting goals. Overcome Challenges U.S. Commercial Service Business Approach

7. Is Your Company Ready to Go Global? Assessing export readiness. • Success selling in the U.S. domestic market. • All levels of management committed to exporting. • Dedicated resources in place. • International marketing plan with defined goals and strategies. • Sufficient production capacity committed for export markets. • Financial resources in place to actively support the marketing in targeted overseas markets.

8. Is Your Company Ready to Go Global? Assessing export readiness. • Committed to providing same level of service given to domestic customers. • Ability to modify products to meet foreign regulations and cultural preferences if needed. • Understanding the logistics and shipping process. • Understanding export payment options: i.e. letters of credit; export credit insurance.

9. Challenges for Businesses Going Global. How to enter new markets quickly and profitably? • Obtaining appropriate market intelligence to determine best market potential. • Addressing legal & regulatory issues. • Locating qualified international buyers, distributors & agents. • Financing deals.

10. Market Intelligence. • Target the best trade opportunities. • Know the source of your market intelligence. • The internet is quick but is it correct? • Market dynamics can change quickly. Is your intelligence current? • Leverage trusted resources. • Our in-country experts are your eyes and ears on the ground.

11. Proven Expertise: Market Intelligence Target the best trade opportunities – http://Export.gov • Country Commercial Guides. • Leverage reports, prepared annually by U.S. Embassy staff, containing information on the business and economic situation of foreign countries and the political climate as it affects U.S. business and investments. • Industry Sector Analyses • In-depth analysis of specific industry sectors and sub-sectors. • International Market Insight. • Brief updates highlighting opportunities, trade events, or changes. • Customized Market Research. • Gain answers to your specific international business questions, as they pertain to your company.

12. The Export Process. Get the information and advice you need to succeed. • Planning and Strategy. • Create a comprehensive international business plan for entry or expansion into targeted markets. • Legal and Regulatory Issues. • Does my product require an export license? • Determine export licensing needs for shipping products. • Bureau of Industry and Security? • U.S. State Dept. – DDTC?

13. The Export Process. Get the information and advice you need to succeed. • Foreign Standards and Regulations. • Understand and comply with global product standards, certification requirements, electricity regulations, packaging laws, etc. • Intellectual Property Rights. • Avoid intellectual property issues and legal disputes. • Protect IPR in advance.

14. The Export Process. Get the information and advice you need to succeed. • Documentary Requirements. • Know what is required for the market you are exporting to: commercial invoices, bill of lading, packing lists, certificates of origin, AES filing, etc. • Duty Rates. • Verify tariff rates and import fees; determine your product’s Schedule B# (HS numbers). • Your buyer pays the tariff but it impacts their landed cost. • Price adjustment to be competitive?

15. Working With The Right Partner Overseas. Common Mistakes: • Chasing orders from around the world. (Be strategic!) • Taking insufficient care in selecting foreign partners. • Treating overseas distributors/agents with less respect than domestic counterparts. • Neglecting to build solid relationships. (Get a passport and use it. Five minutes in person is worth 10+ emails.)

16. Working With The Right Partner Overseas. The Right Partner. • Define the required skills, capabilities, knowledge, and experience that your distributor should possess. • Size of sales force. • Knowledge of the market. • Knowledge of importing & selling your type of product. • Defined geographic territory. • Technical capabilities.

17. Proven Expertise: Business Matchmaking Connect with the right partners and prospects. • Partner Search (International Partner Search). • Find pre-screened potential partners and get detailed company reports; determine the marketability of your product or service. • Personalized Business Matchmaking (Gold Key Service). • Meet with potential buyers, sales representatives, and business partners. • Leverage customized market briefings. • Trade Missions and Trade Shows • Participate in business development missions led by senior U.S. government officials. • International Buyer Program to meet with pre-screened buyers at major U.S. trade shows. • Exhibit in the U.S. Pavilion at Certified Trade Fairs.

18. Proven Expertise: Business Matchmaking Connect with the right partners and prospects. • Conduct Due Diligence. • Before you sign a contract, know who you are working with. • Understand in-country obligations when signing a distributor agreement as this varies greatly from market to market. • U.S. law does not always prevail. • Background Reports (International Company Profile). • Learn about potential partners from our trade professionals working in your target markets. • Get detailed credit reports covering sales, profit figures, potential, liabilities, and other financial information.

19. Proven Expertise: Commercial Diplomacy Level the international playing field for your company. • Overcome trade obstacles to successfully enter international markets. • Obtain support if your company’s exports or foreign bids are adversely affected by a trade barrier. • Access U.S. government trade advocacy for your foreign government procurement bids. • Visits to key foreign officials by high-ranking U.S. officials • Direct support from U.S. officials stationed overseas • Letters to foreign decision-makers

20. Connect With Trade Finance Partners • Link with trade finance partner agencies for extensive guidance on export credit insurance, working capital loan guarantees, etc. • Export Credit Insurance Programs - Mitigate risk of non-payment. • U.S. Export – Import Bank • Export Working Capital Loans • U.S. Small Business Administration • U.S. Export – Import Bank

21. Our Proven Expertise Makes Doing Business Internationally Easier. • Trade Counseling. Get the information and advice you need to succeed. • Market Intelligence. Target the best trade opportunities. • Business Matchmaking. Connect with the right partners and prospects. • Commercial Diplomacy. Ensure your products and services have the best possible prospects for success in international markets. Whether you are looking to make your first export sale or expand to additional international markets, we have the expertise you need to tap into lucrative opportunities and increase your bottom line.

22. Next: Introduction to Market Research

23. Introduction to Market Research Sara Moreno U.S. Department of Commerce

24. Why conduct market research? • Ready, fire, aim is an inefficient way to do business • Prioritize key target markets • Prepare for visits to key markets • Identify and compare costs/benefits of entering new markets • Understand obstacles/challenges • Set goals

25. Types of Market Research • Primary Research • Market visits • Commissioned studies • Expensive • Best choice for aggressive, short-term goals • Secondary Research • Readily available for many markets • Inexpensive • Inconsistent parameters make country-to-country comparisons difficult • Current data not always available for emerging markets • Good choice for modest, short- or medium-term goals

26. Methodical Approach to Market Research • STEP 1 = Determine your Key Indicators • These are the facts that most influence your decision making • Examples • Current consumption/use of your product • Population, GDP, Literacy rate • Number of hospital beds, Physicians per capita • Agricultural activity, Livestock populations • Hydro-power versus coal-fired power plants • Infrastructure (highways, railroads, telecomm, power, etc.) • Standards and Technical Requirements • Export license requirements, import controls, foreign currency restrictions • Choose 3-6 factors that fit your industry, product, and company

27. Method, Steps 2 and 3 • STEP 2 = Find the 6-digit Schedule B number for the product you are researching • http://www.census.gov/foreign-trade/schedules/b/ to verify a Schedule B number • https://uscensus.prod.3ceonline.com/ Schedule B search engine • STEP 3 = Use Schedule B to find trade statistics. Some sources: • UN CommTrade Data, http://comtrade.un.org/monthly/Main/Data.aspx • Trade Stats Express data, http://tse.export.gov/TSE/TSEhome.aspx • Global Trade Atlas, http://www.gtis.com/english/GTIS_revisit.html

28. Method, Steps 4 and 5 • STEP 4 = Use http://export.gov/logistics/eg_main_018130.asp resources to find tariffs and taxes for specific countries • STEP 5 = Use http://export.gov/fta/ftatarifftool/TariffSearch.aspx to determine if your product is eligible for favorable tariff under a Free Trade Agreement • http://export.customsinfo.com is a good source for tariff and tax info. Access it free through the Export.gov link above. • Limitation: you can view tariffs only on U.S.-made products

29. Additional Sources for Market Information • CIA World Fact Book, https://www.cia.gov/library/publications/the-world-factbook/ • U.S. Department of State, http://www.state.gov • Trade Associations in U.S. and in foreign markets • American Chambers of Commerce, http://www.uschamber.com/international/directory • Lexis-Nexis database • TheEconomist and other global news sources • Competitor and Complimentary Product Websites

30. http://www.fas.usda.gov/data

31. http://Export.gov

32. More Sources for Market Information • FAS • TheGlobalEntrepreneur:TakingYourBusinessInternational, 2nd Edition, by James F. Foley • globalEDGE™ – Mich. State U. • http://globaledge.msu.edu/index.asp • The World Bank “Doing Business” reports, http://doingbusiness.org/. The Doing Business Project provides objective measures of business regulations and their enforcement across 189 economies and selected cities at the subnational and regional level.

33. Research Results – Sample Spreadsheet

34. Contact us todayto connect with a world of opportunity. Sara.Moreno@trade.gov 859.225.7001 www.export.gov | www.trade.gov