How to Choose the Right Product to Export

Finding the right product to sell is a key step in growing the export business. If you have a product that has a good demand and complies with regulatory requirements, everything else falls into place. It is the first and most crucial step in successful overseas expansion. And it is not very difficult to find the right one to export with the help of proper research and knowledge.

On the other hand, it is equally important to know what you cannot export. If you choose the wrong product, you will find it quite challenging to find buyers overseas or meet regulations. In this blog, we will guide you through the right approach to build a product strategy for exports, ensuring you navigate these challenges effectively and set your business on the path to success.

1. Analyze The Global Trade Data Of Your Country

The first and foremost step in deciding which product to export is to analyze the global trends currently shaping the market and then identify the right product for your company to export. Finding the right product is essential for successful exports. By analyzing your country's exports, and other countries’ imports, meaning import export data, you can gain insights into which products are currently in demand for exports.

You can obtain such insights with Trademo Intel. Trademo Intel is a global trade data intelligence platform that provides the most granular level of information on global trade, including trends in commodities and products across different countries.

It helps you identify which products are trending and in demand globally, and which markets are performing well under the current market conditions. This intelligence enables you to make informed decisions about what products to export.

Furthermore, exporting goods that are more reasonable and cost-effective to produce domestically is crucial. For instance, Europe and the US should focus on producing high-tech and capital-intensive goods, while labour-intensive goods are better manufactured in developing countries where production costs are lower. This strategic approach not only enhances the competitiveness of your exports but also ensures sustainability in the global market.

2. Create A List Of Product You Are Interested In

Now that you have an understanding of the current export trends in the country and have identified potential products for export, it's time to refine your list based on your target market.

When selecting products, it's advisable to choose those with which you have prior knowledge or experience, even if their profit margins are lower than other options. Familiarity with a product can lead to better quality control, more effective marketing, and stronger relationships with suppliers and customers, all of which can contribute to long-term success. To ensure that your chosen products align well with your business strategy and capabilities.

3. Analyze Competitors In Market

The product you offer in the market needs to be unique and should stand out among your competitor products, you might face stiff competition if you step into exporting products in which there are a lot of competitors in the market.

Your product needs to stand out in the market to avoid being overshadowed by tough competition. To achieve this, consider how differences in demand, culture, social norms, politics, and the characteristics of the people in your target markets can impact your product’s success. Understanding these factors will help you tailor your product to meet the specific needs and preferences of each market.

Additionally, pay attention to branding, packaging, and positioning to ensure your product appeals to local tastes and values. Conduct thorough market research to identify unique selling points that resonate with your audience, and be prepared to adapt your product and marketing strategy to stay ahead of competitors.

4. Check Resource Availability

After identifying the potential product for your export business it is necessary to ensure that the raw material can be sourced in the required quantity and within a desired time frame it is very essential to build a steady supply chain to meet the demand of the buyers.

Timely supply of the product is a key success factor in the export business. India is abundant in cotton, which is a crucial raw material for the textile and garment manufacturing industry. The country is one of the largest producers of cotton in the world, providing a steady and reliable supply for manufacturers.

This abundant availability of high-quality cotton allows Indian textile exporters to produce competitive and cost-effective products, enhancing their position in the global market. Additionally, you also need to check the pricing and quality of raw materials as it can affect your product competitiveness in the market.

5. Choose Profitability

As a business, it's crucial to select a product that ensures profitability. When making this decision, consider all associated costs, including taxes, shipping, insurance, export fees, and other expenses.

Additionally, evaluate the production costs and conduct a thorough cost-benefit analysis to ensure that the product not only covers all expenses but also provides a healthy profit margin. It also involves evaluating if prices are sensitive to seasonal or periodic trends. Understanding these financial aspects will help you set competitive pricing while maintaining profitability.

6. Leverage FTAs To Be More Competitive

Free Trade Agreements (FTAs) open up significant trade opportunities by reducing or eliminating tariffs between countries. By researching which countries have FTAs with your home country, you can gain a competitive edge over the competitors, as it provides you with greater price flexibility. India has an FTA with the ASEAN (Association of Southeast Asian Nations) countries, which includes nations like Singapore, Malaysia, and Thailand.

This agreement significantly reduces tariffs on a wide range of products, allowing Indian exporters to offer their goods at more competitive prices in these markets. Using FTA allows you to more efficiently serve the same market which your competitors are targeting.

7. Trade Restrictions

Every market is unique when it comes to compliance and trade regulations. Many countries impose restrictions on imports and exports via tariffs, quotas, embargoes, licensing requirements, standards, and subsidies, like in India, the export of iron ore is subject to significant restrictions. To ensure adequate domestic supply and to curb excessive mining, the Indian government has imposed export duties on iron ore.

Thoroughly check if there are any trade restrictions related to the export of your product in your target country. If your product attracts higher tariffs in the target market or country, the landed price goes up, and since price and demand are inversely related to each other the demand for those products decreases. Additionally, be aware of embargoes on certain types of goods entering or leaving the country.

8. Incentives Offered For Exports

Most countries provide a range of incentives to encourage the export of goods. When selecting a product for export, it is crucial to identify these incentives and facilities. For example, the Merchandise Exports from India Scheme (MEIS) was implemented by the government to promote the export of goods. Under MEIS Exporters of Agriculture can benefit from MEIS incentives. These incentives help offset the high cost associated with logistics and compliance, thus encouraging more farmers and agribusinesses to enter the export market.

Additionally, other common incentives include tax exemptions, subsidies, export financing, and technical assistance programs. Understanding these benefits can significantly impact the profitability and feasibility of exporting certain products.

Summing Up

If you’re mulling to start an export business and want to select the right product, consider this: Trademo Intel can help you with insights on various product trends. Find as much information as you can about the market, trade restrictions and the selling price of your product from different exporters. You will definitely be able to choose the right product to export and maximize your business profits.

Watch global trade data platform's video to understand how it works.

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