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A Basic Guide to Exporting

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A Basic Guide to Exporting A BASIC GUIDE TO EXPORTING The Official U.S. Government Resource for Small and Medium-Sized Businesses U.S. Department of Commerce | International Trade Administration | U.S. Commercial Service A Basic Guide to Exporting 11th Edition Doug Barry, Editor U.S. Commercial Service U.S. Commercial Service—Connecting you to global markets. A Publication by the U.S. Department of Commerce • Washington, DC export.gov/basicguide Library of Congress Cataloging-in-Publication Data A basic guide to exporting / Doug Barry, editor. -- 11th edition. pages cm “A publication by the U.S. Department of Commerce.” Includes bibliographical references and index. ISBN 978-0-16-092095-0 (alk. paper) 1. Export marketing--United States. 2. Exports--United States. I. Barry, Doug (Business editor) II. United States. Department of Commerce. HF1416.5.B37 2015 658.8’40973--dc23 2015010057 Interviews, success story photos (excluding stock images), and other third-party content provided by and copyright their respective owners; used with permission. Under U.S. copyright law, may not be reproduced, in whole or in part, without written permission from their respective owners. Stock images acquired from Thinkstock by Getty Images; used with permission. Under U.S. copyright law, may not be reproduced, in whole or in part, without written permission from Getty Images, Inc. Selected forms in Appendix D appear courtesy of Unz & Co., a division of WTS Corporation. All type is set in the Myriad Pro family, with the exception of the main cover and spine titles, which are set in variations of Grotesque MT, and the above Catalogue-in-Publication data, which is set in Share TechMono. This edition was created using Adobe Creative Cloud 2014 software, including InDesign, Photoshop, and Illustrator. Work was performed on an Apple iMac 2009 and a Microsoft Surface Pro. Published by the U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230. First printing, 2015. Federal Recycling Program. Printed on recycled paper. Printed in the United States of America. This book is intended to provide general guidance for businesses and practitioners in better understanding the basic concepts of international trade. It is distributed with the understanding that the authors, editors, and publisher are not engaged in rendering legal, accounting, or other professional services. Where legal or other expert assistance is required, the services of a competent professional should be sought. This book contains information on exporting that was current as of the date of publication. While every effort has been made to make it as complete and accurate as possible, readers should be aware that all information that is contained herein is subject to change without notice. Exporting for the first time? Exported before, but things have changed? Need answers, but not sure how or where to get them? This is the book you need. For more than 70 years, A Basic Guide to Exporting has given companies the information they need to establish and grow their business in international markets. Whether you’re new to exporting or just want to learn the latest ideas and techniques, and whether your product is a good or a service, this new 11th Edition—completely rewritten, revised, and updated—will give you the nuts-and-bolts information you need. Here are just some of the topics we’ll cover: • How to identify markets for your company’s products (Chapters 3 and 6) • How to create an export plan (Chapter 2) • How to finance your export transactions (Chapter 15) • The best methods of handling orders and shipments (Chapters 12 and 13) • Sources of free or low-cost export counseling (Chapter 4) In addition, this book also includes: • Real-life success stories from companies we’ve counseled on exporting • Sample forms and letters • Details on how to get free or low-cost U.S. government export support Turn the page, and let’s begin . iii Acknowledgments None of the people responsible for this newest 11th Credit for the look and feel of the book goes to our Edition of A Basic Guide to Exporting was alive when the designer Jason Scheiner. It was no small feat to integrate first one came off the printing press in 1936. At that time all the photos, charts, samples, stories, text pullouts, and for years after, exporting was dominated by very and changes. He also made sure that the print shop was large companies. That may be why over the next 73 years faithful to the design. there were only nine editions—the audience was limited. This book contains many new facts, figures, and analyses. Not anymore. More than 40,000 copies of the 10th Dozens of experts from different government trade Edition and 10th Revised Edition have been printed promotion agencies reviewed sections of the book and since 2011. But since then, much has changed on the suggested changes. Special thanks to Jamie Rose of the world economic scene, including a record 300,000 U.S. U.S. Department of the Treasury for coordinating input exporting companies in 2013. on the export controls section and to Yuki Fujiyama from the U.S. Department of Commerce’s Office of Financial This completely updated and rewritten 11th Edition is and Insurance Industries for expanding the Trade dedicated to and a practical reference for the thousands Finance section. of additional companies, mostly small and medium-size, that, in the coming years, will export for the first time or Our colleague April Miller served as business manager for expand into additional export markets. the project, and her knowledge of how our system works ensured that the book appeared while topics and trends A new generation of export enablers is responsible for are fresh. the book you are holding, or are viewing on your mobile device—a technology that wasn’t even science fiction Lastly, thanks to Progressive Publishing Services who in 1936! Among the many contributors to this book are provided text editing services and the index. Our friends Anand Basu and Antwaun Griffin of the senior leadership at the Government Printing Office helped us find them, team of the U.S. Commercial Service, who early on then later selected the print shop and arranged for book supported the need for a new edition. Budget analyst distribution through their commercial sales program. Carolyn McNeill made sure commitments were kept. To you, the reader, we hope this book challenges Making important editorial contributions were Curt your assumptions about engaging in the world of Cultice and Roza Pace, a whiz at explaining free trade international business and gives you the confidence to agreements. Student interns Brian Gerrard and Sara become an even greater success. Like the businesspeople Abu-Odeh kept track of hundreds of text changes and featured in the pages that follow, we hope you will not crunched innumerable bits of data for the charts. only sell to the world—we hope you’ll help make it a better place. Doug Barry, Editor Washington, D.C. • 2015 iv Table of Contents Chapter 1: Introduction Chapter 11 The World Is Open for Your Business ......... 1 Going Online: E-Exporting Tools for Success Story: DeFeet International .................................8 Small Businesses .................................121 Success Story: NuStep .....................................................132 Chapter 2 Developing an Export Strategy .............. 11 Chapter 12 Sample Outline of an Export Plan .................................. 22 Shipping Your Product .........................135 Sample Elements of an Export Plan .............................. 23 Success Story: Bassetts Ice Cream Company ............144 Success Story: Urban Planet Mobile .............................. 28 Chapter 13 Chapter 3 Pricing, Quotations, and Terms .............147 Developing a Marketing Plan ................ 31 Success Story: Alignment Simple Solutions .............154 Success Story: Zeigler Brothers ....................................... 42 Chapter 14 Chapter 4 Methods of Payment ............................157 Export Advice ....................................... 45 Success Story: Giant Loop ..............................................166 Success Story: Advanced Superabrasives .................... 56 Chapter 15 Chapter 5 Financing Export Transactions ..............169 Methods and Channels .......................... 59 Success Story: Patton Electronics Company .............180 Choosing a Foreign Representative or Distributor ... 70 Success Story: Infinity Air .................................................. 72 Chapter 16 Business Travel Abroad .........................183 Chapter 6 Business Culture Tips........................................................187 Finding Qualified Buyers ....................... 75 Success Story: Lightning Eliminators ..........................190 Who Is the “Ideal” International Buyer? ........................ 83 Chapter 17 Chapter 7 Selling Overseas and After-Sales Service ..193 Tech Licensing and Joint Ventures .......... 85 Success Story: Spancrete Machinery Corporation .... 88 Chapter 18 Rules of Origin for FTAs ........................201 Chapter 8 Example Rules of Origin ..................................................207 Preparing Your Product for Export ......... 91 Success Story: Jet Incorporated ....................................214 Success Story: Avazzia ....................................................... 96 Chapter 19 Chapter 9 Conclusion ..........................................217 Exporting Services ................................ 99 Success Story: Home Instead Senior Care .................104
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