Top tips for conducting export market research
In this guide:
- Researching export markets
- Advantages and disadvantages of researching export markets
- Researching export markets online
- Researching customers and markets abroad
- Conducting in-market export research
- Research product and packaging changes for export
- Top tips for conducting export market research
- Carrying out and commissioning research on overseas markets
- Researching export markets – Genie Insights
Advantages and disadvantages of researching export markets
The benefits and potential drawbacks of researching export markets before selling to them.
Researching potential export markets before you commit to entering them is a logical step but there are things to consider before you start.
Advantages of export market research
There are a number of benefits to undertaking market research before you enter new overseas markets, these include:
- spotting trends
- minimising risk
- identifying threats and opportunities
Disadvantages of export market research
There can be potential drawbacks to conducting market research, these may include:
- the expense of accessing expert information
- outdated information leading to bad decision-making
- it can be time-consuming
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Source URL
/content/advantages-and-disadvantages-researching-export-markets
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Researching export markets online
Ways of conducting online research on export markets.
Conducting thorough online research can help you pull together valuable information which can be crucial to your export planning. It will help inform your decision making in a timely and cost-effective way.
Researching potential overseas markets online can help you:
- assess market potential
- find customers
- analyse your competition
- assess market barriers and risks
- find the best routes to market
Read more about the things you should consider when trading with the EU and when trading with GB and countries outside the EU.
Business risk reports
Read the Overseas Business Risk reports for information on political instability, terrorism, crime, corruption, human rights issues and intellectual property risks.
EU Market Access Database
You can check the EU Market Access Database to research a country's duty rates and licensing rules.
Check whether EU wide technical rules or national rules apply if you're sending goods within the EU. If technical rules or national rules apply, you can get advice from the product contact point for that country.
Invest NI Business Information Centre
The Invest NI Business Information Centre provides free access to market research, company databases, and other business information to help local companies develop their markets, identify export opportunities and find new customers.
The Centre is located at Invest NI's office in Belfast. The wide range of business information includes:
- trade and business journal collection
- details of trade fairs
- worldwide country profiles
- tenders information
- guidance on import/export procedures and business agreements
To access this information, call the Invest NI helpline on Tel 0800 181 4422.
Tenders Alert Service
The Invest NI Tenders Alert Service allows you to identify local, UK and European contract opportunities from a wide range of public sector organisations via a daily email alert service. It also has information about selling to the government - it has compiled a NI Councils Procurement fact sheet giving contacts for buyers and brief data on how they buy goods and services.
Also on this siteContent category
Source URL
/content/researching-export-markets-online
Links
Researching customers and markets abroad
Research overseas markets, consumers and countries to make informed decisions about your business.
When researching overseas markets, you will need to identify your potential customers and their needs, by considering the following factors:
- Who will buy from you? Each marketplace is different. For example, you may find that your overseas customers are in the public sector, while those in your home market are small businesses.
- What influences customers' purchasing decisions? This could include culture, age, gender and many other factors.
- Why do customers buy from you? Consider what you need to know about your customers' needs.
- What price can the product profitably sell for? This will influence your pricing and marketing decisions.
Read more about how to create customer personas.
You need to establish:
- Size of your potential market - this could be limited by population, cultural or economic factors.
- Politics and economics - an unstable political climate or unfavourable trading conditions can make exporting risky.
- Culture - this may affect your selling proposition. Investigate any barriers to your product's success. Will your product be valued the same as at home? Will your customers have the same reasons to buy it?
- Language and etiquette - can you market your product effectively in the local language? Will you have access to professional translators and marketing agencies? It is important to communicate effectively and understand cultural differences.
- Safety and security - the risks presented by local terrorist activities as well as the global risk of indiscriminate terrorist attacks. Also, the level of crime in the target market. Read more about overseas business risk.
- You can also find travel and security information in your target market.
Support for researching other countries
When researching potential countries to sell to, you can find information from the following:
- Invest NI support for selling outside Northern Ireland
- The Department for Business and Trade support for planning entry into new overseas markets
- Search for commercially available research from Market Research World
- Trade visits provide valuable first-hand experience
Invest NI Graduate to Export programme
The Graduate to Export programme from Invest NI aims to help Northern Ireland companies with their growth plans by providing them with support to employ a graduate for up to eighteen months to take forward a market research project that targets a specific overseas market. Read more about the Graduate to Export programme and its eligibility criteria.
ActionsAlso on this siteContent category
Source URL
/content/researching-customers-and-markets-abroad
Links
Conducting in-market export research
Ways of conducting in-market research on export markets.
Once you have gathered enough information through online research to help you choose appropriate markets for your product or service, you should then conduct some in-market research.
Visiting your target market will allow you to gather specific information on the market for your product or service. You could also visit a trade show or conference, or participate in a trade mission. The data you gather in-market should be accurate and up-to-date.
Overseas Market Introduction Service
The Overseas Market Introduction Services (OMIS) is a chargeable service offered by the Department for International Trade through its network of staff in overseas embassies and consulates. It can be commissioned and managed online. OMIS offers:
- bespoke market research, sector advice and market entry strategies
- support during overseas visits
- identification of possible business partners
- help to prepare for exhibitions, events and trade fairs
Contact an International Trade Adviser (ITA) to find out about OMIS. Your ITA can help with advice on all aspects of exporting.
Trade Advisory Scheme
The Trade Advisory Service provides businesses with tailored export consultancy from Invest Northern Ireland advisors based in overseas markets. For information on the Trade Advisory Scheme call the Invest NI Business Support helpline on Tel 0800 181 4422.
ActionsAlso on this siteContent category
Source URL
/content/conducting-market-export-research
Links
Research product and packaging changes for export
Adjusting your product to comply with law overseas.
You may need to adjust your product or its packaging to comply with local laws and regulations. For example, there may be specific health and safety standards in your target country that differ from those in the UK. It is your responsibility to make sure you comply - and errors can be costly.
You may need to adjust your product or operational set-up to comply with local laws.
You should investigate:
- local export legislation and technical regulations
- certification and testing requirements
- local standards affecting your existing and future products
- product liability
- quantities and units
- patents and trade marks
- staff qualifications
Find out about the Invest NI support available for exporters.
You may need detailed information on international aspects of standards, accreditation and measurement infrastructure, including more specific facts and figures for a number of countries. You should also be aware that your product may need an export licence, or be subject to import duty and sales tax outside the European Economic Area.
The British Standards Institute (BSI) international projects department can help you deal with technical barriers to trade including any regulatory issues you might face.
Read more about how to make your product packaging effective and how to package food for export or import.
Also on this siteContent category
Source URL
/content/research-product-and-packaging-changes-export
Links
Top tips for conducting export market research
Five top tips to help you conduct your export market research.
Researching your potential customers, competitors and the trading environment in your target overseas markets, you will increase your chance of success.
The following tips will help you successfully research your export markets before committing to entering them.
- Use online databases to investigate the demand for your products in new markets as well as if the market share is there - read more about researching export markets online.
- Consider visiting the markets. Visit your target market to gather specific information on the opportunities for your product or service - read more about conducting in-market export research.
- Get help - Before you make your first move into an overseas market, you should seek expert advice and support. Find out about the available support for exporting.
- Confirm the reliability of your data with multiple sources.
- Research the laws, legislations, taxes and trading standards in the countries you're hoping to trade in - view a range of exporting country guides.
Also on this siteContent category
Source URL
/content/top-tips-conducting-export-market-research
Links
Carrying out and commissioning research on overseas markets
Undertaking market research in overseas export markets.
Market research is available from government agencies and commercial organisations.
Conduct your own market research
You can conduct research using media sources, such as newspapers, trade journals and the internet, and get information by networking with experienced exporters. Your trade associations may be able to help you with contacts. For many small businesses, the best approach is to visit the market and spend some time interviewing a range of people. Read more about how to develop an exporting marketing plan.
GOV.UK produces 'sector in-country' reports for many markets.
Commission market research
You can commission a market research agency to investigate your overseas market on your behalf.
Decide whether you want to use a UK-based agency or a local one. A local agency may understand your potential customers better and will be able to access the necessary information more easily. You should select your agency carefully, and check that their proposal shows that they understand your needs.
State what you expect to find out from your research in a clear brief. This should specify your aims in commissioning the research, and the timescales and presentation you want. Describe your business and product, state the information required and the geographical scope.
Access published market reports
You can also buy reports on some overseas markets.
HelpActionsAlso on this siteContent category
Source URL
/content/carrying-out-and-commissioning-research-overseas-markets
Links
Researching export markets
Researching export markets – Genie Insights
Matt Reeve, Director of Genie Insights, explains how the business researches export markets.
Genie Insights provides complementary products and services to the transport and logistics industry. Their two primary divisions are fleet management software and solar solutions for commercial vehicles.
Matt Reeve, Director of Genie Insights, explains how the business researches export markets.
Export markets
"Until recently, our main customer base was within the island of Ireland, when we were solely supplying our fleet management software and offering other related consultancy services. However, in 2020, we moved into the supply of physical products (solar panels), which have a much broader scope for export."
"Our primary export market for our solar solutions is currently Great Britain, but we have started to move into some of Europe, specifically the Republic of Ireland, the Netherlands, Poland and Scandinavia."
Conducting market research
"When we first added solar panels to our business, we were a small team competing against businesses with larger sales teams. So, we had to devise a different approach that would allow us to punch above our weight. Instead of selling directly to the market, we built strategic distribution partnerships with original equipment manufacturers (OEMs) to supply our product. Although we had less control over the direct-to-market sales, we could leverage the OEM’s larger sales teams to get our product into the market."
"For our software product, we have used industry-specific databases that have given us the ability to prioritise potential customers based initially on fleet size. From there, we can then complete online research to find out more. As well as company websites and social media profiles, we’ve found it useful to search for companies in the news or industry trade journals, as you can often find quotes in articles from the relevant decision-maker."
"For our solar division, most of our relationships have been built via personal connections. As we roll out a new product for a specific application, we have sought to align ourselves with the market leader in the industry sector."
Advice and support
"We are very grateful to have received support from Invest NI to assist us with some of the costs of the in-market research. This has been via the Growth Accelerator Programme (GAP) and the ‘Going Dutch’ programme."
"The GAP has provided financial assistance to support the cost of travel to export markets to meet with potential partners. We launched our solar division during COVID so most of our sales activity was established via remote online meetings. Once travel restrictions were lifted, it was invaluable meeting people face-to-face to better build the relationships."
"The GAP has also supported attendance at various trade shows – there’s no better way to get face-to-face with potential distributors and customers."
"The Going Dutch programme went even further – Invest NI’s team conducted research and set up appointments for us before our market visit. Following the initial market visit, we now have a sales agent in the Netherlands."
"But perhaps the most significant impact Invest NI has had on our business has been the Key Worker Salary Grant. A contribution towards an employee's salary has helped us to bring on additional much-needed resources."
"Our export growth has been steady over the past few years. Between 2019 and 2023, our sales outside NI grew from 42% to 94%. This activity is still heavily focused on GB as our largest export market, but sales to the EU are increasing year-on-year. By the end of 2024, we anticipate EU sales will exceed 10% and may see sales into further new markets."
Business challenges and successes
"The only way to be effective going into a new market is to understand what you are getting yourself into. Insights from market research can guide product development, assess competitor activity and identify appropriate target customers. This approach helps you go into a market with a clear understanding of how you should be positioning your offering and who you want to sell to."
"Having a more strategic approach to market development has been a lesson for us. In the earlier days, we were guilty of trying to design products to suit all market applications simultaneously, but we quickly realised that we didn’t have the resources to do that. When we re-focused and concentrated on researching and launching one product application to one market segment at a time, everything became more manageable. Because we put most of our time and energy into researching and delivering for one market initially, we could more quickly dominate that market before moving on to the next application and the next to replicate the model.
"Having to ship a physical product abroad is still challenging today, particularly when despatching it to a new market for the first time. We have sought advice from a company specialising in customs arrangements when we’ve needed it."
Case StudyMatt ReevePrimary parentContent category
Source URL
/content/researching-export-markets-genie-insights
Links
Conducting in-market export research
In this guide:
- Researching export markets
- Advantages and disadvantages of researching export markets
- Researching export markets online
- Researching customers and markets abroad
- Conducting in-market export research
- Research product and packaging changes for export
- Top tips for conducting export market research
- Carrying out and commissioning research on overseas markets
- Researching export markets – Genie Insights
Advantages and disadvantages of researching export markets
The benefits and potential drawbacks of researching export markets before selling to them.
Researching potential export markets before you commit to entering them is a logical step but there are things to consider before you start.
Advantages of export market research
There are a number of benefits to undertaking market research before you enter new overseas markets, these include:
- spotting trends
- minimising risk
- identifying threats and opportunities
Disadvantages of export market research
There can be potential drawbacks to conducting market research, these may include:
- the expense of accessing expert information
- outdated information leading to bad decision-making
- it can be time-consuming
Content category
Source URL
/content/advantages-and-disadvantages-researching-export-markets
Links
Researching export markets online
Ways of conducting online research on export markets.
Conducting thorough online research can help you pull together valuable information which can be crucial to your export planning. It will help inform your decision making in a timely and cost-effective way.
Researching potential overseas markets online can help you:
- assess market potential
- find customers
- analyse your competition
- assess market barriers and risks
- find the best routes to market
Read more about the things you should consider when trading with the EU and when trading with GB and countries outside the EU.
Business risk reports
Read the Overseas Business Risk reports for information on political instability, terrorism, crime, corruption, human rights issues and intellectual property risks.
EU Market Access Database
You can check the EU Market Access Database to research a country's duty rates and licensing rules.
Check whether EU wide technical rules or national rules apply if you're sending goods within the EU. If technical rules or national rules apply, you can get advice from the product contact point for that country.
Invest NI Business Information Centre
The Invest NI Business Information Centre provides free access to market research, company databases, and other business information to help local companies develop their markets, identify export opportunities and find new customers.
The Centre is located at Invest NI's office in Belfast. The wide range of business information includes:
- trade and business journal collection
- details of trade fairs
- worldwide country profiles
- tenders information
- guidance on import/export procedures and business agreements
To access this information, call the Invest NI helpline on Tel 0800 181 4422.
Tenders Alert Service
The Invest NI Tenders Alert Service allows you to identify local, UK and European contract opportunities from a wide range of public sector organisations via a daily email alert service. It also has information about selling to the government - it has compiled a NI Councils Procurement fact sheet giving contacts for buyers and brief data on how they buy goods and services.
Also on this siteContent category
Source URL
/content/researching-export-markets-online
Links
Researching customers and markets abroad
Research overseas markets, consumers and countries to make informed decisions about your business.
When researching overseas markets, you will need to identify your potential customers and their needs, by considering the following factors:
- Who will buy from you? Each marketplace is different. For example, you may find that your overseas customers are in the public sector, while those in your home market are small businesses.
- What influences customers' purchasing decisions? This could include culture, age, gender and many other factors.
- Why do customers buy from you? Consider what you need to know about your customers' needs.
- What price can the product profitably sell for? This will influence your pricing and marketing decisions.
Read more about how to create customer personas.
You need to establish:
- Size of your potential market - this could be limited by population, cultural or economic factors.
- Politics and economics - an unstable political climate or unfavourable trading conditions can make exporting risky.
- Culture - this may affect your selling proposition. Investigate any barriers to your product's success. Will your product be valued the same as at home? Will your customers have the same reasons to buy it?
- Language and etiquette - can you market your product effectively in the local language? Will you have access to professional translators and marketing agencies? It is important to communicate effectively and understand cultural differences.
- Safety and security - the risks presented by local terrorist activities as well as the global risk of indiscriminate terrorist attacks. Also, the level of crime in the target market. Read more about overseas business risk.
- You can also find travel and security information in your target market.
Support for researching other countries
When researching potential countries to sell to, you can find information from the following:
- Invest NI support for selling outside Northern Ireland
- The Department for Business and Trade support for planning entry into new overseas markets
- Search for commercially available research from Market Research World
- Trade visits provide valuable first-hand experience
Invest NI Graduate to Export programme
The Graduate to Export programme from Invest NI aims to help Northern Ireland companies with their growth plans by providing them with support to employ a graduate for up to eighteen months to take forward a market research project that targets a specific overseas market. Read more about the Graduate to Export programme and its eligibility criteria.
ActionsAlso on this siteContent category
Source URL
/content/researching-customers-and-markets-abroad
Links
Conducting in-market export research
Ways of conducting in-market research on export markets.
Once you have gathered enough information through online research to help you choose appropriate markets for your product or service, you should then conduct some in-market research.
Visiting your target market will allow you to gather specific information on the market for your product or service. You could also visit a trade show or conference, or participate in a trade mission. The data you gather in-market should be accurate and up-to-date.
Overseas Market Introduction Service
The Overseas Market Introduction Services (OMIS) is a chargeable service offered by the Department for International Trade through its network of staff in overseas embassies and consulates. It can be commissioned and managed online. OMIS offers:
- bespoke market research, sector advice and market entry strategies
- support during overseas visits
- identification of possible business partners
- help to prepare for exhibitions, events and trade fairs
Contact an International Trade Adviser (ITA) to find out about OMIS. Your ITA can help with advice on all aspects of exporting.
Trade Advisory Scheme
The Trade Advisory Service provides businesses with tailored export consultancy from Invest Northern Ireland advisors based in overseas markets. For information on the Trade Advisory Scheme call the Invest NI Business Support helpline on Tel 0800 181 4422.
ActionsAlso on this siteContent category
Source URL
/content/conducting-market-export-research
Links
Research product and packaging changes for export
Adjusting your product to comply with law overseas.
You may need to adjust your product or its packaging to comply with local laws and regulations. For example, there may be specific health and safety standards in your target country that differ from those in the UK. It is your responsibility to make sure you comply - and errors can be costly.
You may need to adjust your product or operational set-up to comply with local laws.
You should investigate:
- local export legislation and technical regulations
- certification and testing requirements
- local standards affecting your existing and future products
- product liability
- quantities and units
- patents and trade marks
- staff qualifications
Find out about the Invest NI support available for exporters.
You may need detailed information on international aspects of standards, accreditation and measurement infrastructure, including more specific facts and figures for a number of countries. You should also be aware that your product may need an export licence, or be subject to import duty and sales tax outside the European Economic Area.
The British Standards Institute (BSI) international projects department can help you deal with technical barriers to trade including any regulatory issues you might face.
Read more about how to make your product packaging effective and how to package food for export or import.
Also on this siteContent category
Source URL
/content/research-product-and-packaging-changes-export
Links
Top tips for conducting export market research
Five top tips to help you conduct your export market research.
Researching your potential customers, competitors and the trading environment in your target overseas markets, you will increase your chance of success.
The following tips will help you successfully research your export markets before committing to entering them.
- Use online databases to investigate the demand for your products in new markets as well as if the market share is there - read more about researching export markets online.
- Consider visiting the markets. Visit your target market to gather specific information on the opportunities for your product or service - read more about conducting in-market export research.
- Get help - Before you make your first move into an overseas market, you should seek expert advice and support. Find out about the available support for exporting.
- Confirm the reliability of your data with multiple sources.
- Research the laws, legislations, taxes and trading standards in the countries you're hoping to trade in - view a range of exporting country guides.
Also on this siteContent category
Source URL
/content/top-tips-conducting-export-market-research
Links
Carrying out and commissioning research on overseas markets
Undertaking market research in overseas export markets.
Market research is available from government agencies and commercial organisations.
Conduct your own market research
You can conduct research using media sources, such as newspapers, trade journals and the internet, and get information by networking with experienced exporters. Your trade associations may be able to help you with contacts. For many small businesses, the best approach is to visit the market and spend some time interviewing a range of people. Read more about how to develop an exporting marketing plan.
GOV.UK produces 'sector in-country' reports for many markets.
Commission market research
You can commission a market research agency to investigate your overseas market on your behalf.
Decide whether you want to use a UK-based agency or a local one. A local agency may understand your potential customers better and will be able to access the necessary information more easily. You should select your agency carefully, and check that their proposal shows that they understand your needs.
State what you expect to find out from your research in a clear brief. This should specify your aims in commissioning the research, and the timescales and presentation you want. Describe your business and product, state the information required and the geographical scope.
Access published market reports
You can also buy reports on some overseas markets.
HelpActionsAlso on this siteContent category
Source URL
/content/carrying-out-and-commissioning-research-overseas-markets
Links
Researching export markets
Researching export markets – Genie Insights
Matt Reeve, Director of Genie Insights, explains how the business researches export markets.
Genie Insights provides complementary products and services to the transport and logistics industry. Their two primary divisions are fleet management software and solar solutions for commercial vehicles.
Matt Reeve, Director of Genie Insights, explains how the business researches export markets.
Export markets
"Until recently, our main customer base was within the island of Ireland, when we were solely supplying our fleet management software and offering other related consultancy services. However, in 2020, we moved into the supply of physical products (solar panels), which have a much broader scope for export."
"Our primary export market for our solar solutions is currently Great Britain, but we have started to move into some of Europe, specifically the Republic of Ireland, the Netherlands, Poland and Scandinavia."
Conducting market research
"When we first added solar panels to our business, we were a small team competing against businesses with larger sales teams. So, we had to devise a different approach that would allow us to punch above our weight. Instead of selling directly to the market, we built strategic distribution partnerships with original equipment manufacturers (OEMs) to supply our product. Although we had less control over the direct-to-market sales, we could leverage the OEM’s larger sales teams to get our product into the market."
"For our software product, we have used industry-specific databases that have given us the ability to prioritise potential customers based initially on fleet size. From there, we can then complete online research to find out more. As well as company websites and social media profiles, we’ve found it useful to search for companies in the news or industry trade journals, as you can often find quotes in articles from the relevant decision-maker."
"For our solar division, most of our relationships have been built via personal connections. As we roll out a new product for a specific application, we have sought to align ourselves with the market leader in the industry sector."
Advice and support
"We are very grateful to have received support from Invest NI to assist us with some of the costs of the in-market research. This has been via the Growth Accelerator Programme (GAP) and the ‘Going Dutch’ programme."
"The GAP has provided financial assistance to support the cost of travel to export markets to meet with potential partners. We launched our solar division during COVID so most of our sales activity was established via remote online meetings. Once travel restrictions were lifted, it was invaluable meeting people face-to-face to better build the relationships."
"The GAP has also supported attendance at various trade shows – there’s no better way to get face-to-face with potential distributors and customers."
"The Going Dutch programme went even further – Invest NI’s team conducted research and set up appointments for us before our market visit. Following the initial market visit, we now have a sales agent in the Netherlands."
"But perhaps the most significant impact Invest NI has had on our business has been the Key Worker Salary Grant. A contribution towards an employee's salary has helped us to bring on additional much-needed resources."
"Our export growth has been steady over the past few years. Between 2019 and 2023, our sales outside NI grew from 42% to 94%. This activity is still heavily focused on GB as our largest export market, but sales to the EU are increasing year-on-year. By the end of 2024, we anticipate EU sales will exceed 10% and may see sales into further new markets."
Business challenges and successes
"The only way to be effective going into a new market is to understand what you are getting yourself into. Insights from market research can guide product development, assess competitor activity and identify appropriate target customers. This approach helps you go into a market with a clear understanding of how you should be positioning your offering and who you want to sell to."
"Having a more strategic approach to market development has been a lesson for us. In the earlier days, we were guilty of trying to design products to suit all market applications simultaneously, but we quickly realised that we didn’t have the resources to do that. When we re-focused and concentrated on researching and launching one product application to one market segment at a time, everything became more manageable. Because we put most of our time and energy into researching and delivering for one market initially, we could more quickly dominate that market before moving on to the next application and the next to replicate the model.
"Having to ship a physical product abroad is still challenging today, particularly when despatching it to a new market for the first time. We have sought advice from a company specialising in customs arrangements when we’ve needed it."
Case StudyMatt ReevePrimary parentContent category
Source URL
/content/researching-export-markets-genie-insights
Links
Researching export markets online
In this guide:
- Researching export markets
- Advantages and disadvantages of researching export markets
- Researching export markets online
- Researching customers and markets abroad
- Conducting in-market export research
- Research product and packaging changes for export
- Top tips for conducting export market research
- Carrying out and commissioning research on overseas markets
- Researching export markets – Genie Insights
Advantages and disadvantages of researching export markets
The benefits and potential drawbacks of researching export markets before selling to them.
Researching potential export markets before you commit to entering them is a logical step but there are things to consider before you start.
Advantages of export market research
There are a number of benefits to undertaking market research before you enter new overseas markets, these include:
- spotting trends
- minimising risk
- identifying threats and opportunities
Disadvantages of export market research
There can be potential drawbacks to conducting market research, these may include:
- the expense of accessing expert information
- outdated information leading to bad decision-making
- it can be time-consuming
Content category
Source URL
/content/advantages-and-disadvantages-researching-export-markets
Links
Researching export markets online
Ways of conducting online research on export markets.
Conducting thorough online research can help you pull together valuable information which can be crucial to your export planning. It will help inform your decision making in a timely and cost-effective way.
Researching potential overseas markets online can help you:
- assess market potential
- find customers
- analyse your competition
- assess market barriers and risks
- find the best routes to market
Read more about the things you should consider when trading with the EU and when trading with GB and countries outside the EU.
Business risk reports
Read the Overseas Business Risk reports for information on political instability, terrorism, crime, corruption, human rights issues and intellectual property risks.
EU Market Access Database
You can check the EU Market Access Database to research a country's duty rates and licensing rules.
Check whether EU wide technical rules or national rules apply if you're sending goods within the EU. If technical rules or national rules apply, you can get advice from the product contact point for that country.
Invest NI Business Information Centre
The Invest NI Business Information Centre provides free access to market research, company databases, and other business information to help local companies develop their markets, identify export opportunities and find new customers.
The Centre is located at Invest NI's office in Belfast. The wide range of business information includes:
- trade and business journal collection
- details of trade fairs
- worldwide country profiles
- tenders information
- guidance on import/export procedures and business agreements
To access this information, call the Invest NI helpline on Tel 0800 181 4422.
Tenders Alert Service
The Invest NI Tenders Alert Service allows you to identify local, UK and European contract opportunities from a wide range of public sector organisations via a daily email alert service. It also has information about selling to the government - it has compiled a NI Councils Procurement fact sheet giving contacts for buyers and brief data on how they buy goods and services.
Also on this siteContent category
Source URL
/content/researching-export-markets-online
Links
Researching customers and markets abroad
Research overseas markets, consumers and countries to make informed decisions about your business.
When researching overseas markets, you will need to identify your potential customers and their needs, by considering the following factors:
- Who will buy from you? Each marketplace is different. For example, you may find that your overseas customers are in the public sector, while those in your home market are small businesses.
- What influences customers' purchasing decisions? This could include culture, age, gender and many other factors.
- Why do customers buy from you? Consider what you need to know about your customers' needs.
- What price can the product profitably sell for? This will influence your pricing and marketing decisions.
Read more about how to create customer personas.
You need to establish:
- Size of your potential market - this could be limited by population, cultural or economic factors.
- Politics and economics - an unstable political climate or unfavourable trading conditions can make exporting risky.
- Culture - this may affect your selling proposition. Investigate any barriers to your product's success. Will your product be valued the same as at home? Will your customers have the same reasons to buy it?
- Language and etiquette - can you market your product effectively in the local language? Will you have access to professional translators and marketing agencies? It is important to communicate effectively and understand cultural differences.
- Safety and security - the risks presented by local terrorist activities as well as the global risk of indiscriminate terrorist attacks. Also, the level of crime in the target market. Read more about overseas business risk.
- You can also find travel and security information in your target market.
Support for researching other countries
When researching potential countries to sell to, you can find information from the following:
- Invest NI support for selling outside Northern Ireland
- The Department for Business and Trade support for planning entry into new overseas markets
- Search for commercially available research from Market Research World
- Trade visits provide valuable first-hand experience
Invest NI Graduate to Export programme
The Graduate to Export programme from Invest NI aims to help Northern Ireland companies with their growth plans by providing them with support to employ a graduate for up to eighteen months to take forward a market research project that targets a specific overseas market. Read more about the Graduate to Export programme and its eligibility criteria.
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Conducting in-market export research
Ways of conducting in-market research on export markets.
Once you have gathered enough information through online research to help you choose appropriate markets for your product or service, you should then conduct some in-market research.
Visiting your target market will allow you to gather specific information on the market for your product or service. You could also visit a trade show or conference, or participate in a trade mission. The data you gather in-market should be accurate and up-to-date.
Overseas Market Introduction Service
The Overseas Market Introduction Services (OMIS) is a chargeable service offered by the Department for International Trade through its network of staff in overseas embassies and consulates. It can be commissioned and managed online. OMIS offers:
- bespoke market research, sector advice and market entry strategies
- support during overseas visits
- identification of possible business partners
- help to prepare for exhibitions, events and trade fairs
Contact an International Trade Adviser (ITA) to find out about OMIS. Your ITA can help with advice on all aspects of exporting.
Trade Advisory Scheme
The Trade Advisory Service provides businesses with tailored export consultancy from Invest Northern Ireland advisors based in overseas markets. For information on the Trade Advisory Scheme call the Invest NI Business Support helpline on Tel 0800 181 4422.
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Research product and packaging changes for export
Adjusting your product to comply with law overseas.
You may need to adjust your product or its packaging to comply with local laws and regulations. For example, there may be specific health and safety standards in your target country that differ from those in the UK. It is your responsibility to make sure you comply - and errors can be costly.
You may need to adjust your product or operational set-up to comply with local laws.
You should investigate:
- local export legislation and technical regulations
- certification and testing requirements
- local standards affecting your existing and future products
- product liability
- quantities and units
- patents and trade marks
- staff qualifications
Find out about the Invest NI support available for exporters.
You may need detailed information on international aspects of standards, accreditation and measurement infrastructure, including more specific facts and figures for a number of countries. You should also be aware that your product may need an export licence, or be subject to import duty and sales tax outside the European Economic Area.
The British Standards Institute (BSI) international projects department can help you deal with technical barriers to trade including any regulatory issues you might face.
Read more about how to make your product packaging effective and how to package food for export or import.
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Top tips for conducting export market research
Five top tips to help you conduct your export market research.
Researching your potential customers, competitors and the trading environment in your target overseas markets, you will increase your chance of success.
The following tips will help you successfully research your export markets before committing to entering them.
- Use online databases to investigate the demand for your products in new markets as well as if the market share is there - read more about researching export markets online.
- Consider visiting the markets. Visit your target market to gather specific information on the opportunities for your product or service - read more about conducting in-market export research.
- Get help - Before you make your first move into an overseas market, you should seek expert advice and support. Find out about the available support for exporting.
- Confirm the reliability of your data with multiple sources.
- Research the laws, legislations, taxes and trading standards in the countries you're hoping to trade in - view a range of exporting country guides.
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Carrying out and commissioning research on overseas markets
Undertaking market research in overseas export markets.
Market research is available from government agencies and commercial organisations.
Conduct your own market research
You can conduct research using media sources, such as newspapers, trade journals and the internet, and get information by networking with experienced exporters. Your trade associations may be able to help you with contacts. For many small businesses, the best approach is to visit the market and spend some time interviewing a range of people. Read more about how to develop an exporting marketing plan.
GOV.UK produces 'sector in-country' reports for many markets.
Commission market research
You can commission a market research agency to investigate your overseas market on your behalf.
Decide whether you want to use a UK-based agency or a local one. A local agency may understand your potential customers better and will be able to access the necessary information more easily. You should select your agency carefully, and check that their proposal shows that they understand your needs.
State what you expect to find out from your research in a clear brief. This should specify your aims in commissioning the research, and the timescales and presentation you want. Describe your business and product, state the information required and the geographical scope.
Access published market reports
You can also buy reports on some overseas markets.
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Researching export markets
Researching export markets – Genie Insights
Matt Reeve, Director of Genie Insights, explains how the business researches export markets.
Genie Insights provides complementary products and services to the transport and logistics industry. Their two primary divisions are fleet management software and solar solutions for commercial vehicles.
Matt Reeve, Director of Genie Insights, explains how the business researches export markets.
Export markets
"Until recently, our main customer base was within the island of Ireland, when we were solely supplying our fleet management software and offering other related consultancy services. However, in 2020, we moved into the supply of physical products (solar panels), which have a much broader scope for export."
"Our primary export market for our solar solutions is currently Great Britain, but we have started to move into some of Europe, specifically the Republic of Ireland, the Netherlands, Poland and Scandinavia."
Conducting market research
"When we first added solar panels to our business, we were a small team competing against businesses with larger sales teams. So, we had to devise a different approach that would allow us to punch above our weight. Instead of selling directly to the market, we built strategic distribution partnerships with original equipment manufacturers (OEMs) to supply our product. Although we had less control over the direct-to-market sales, we could leverage the OEM’s larger sales teams to get our product into the market."
"For our software product, we have used industry-specific databases that have given us the ability to prioritise potential customers based initially on fleet size. From there, we can then complete online research to find out more. As well as company websites and social media profiles, we’ve found it useful to search for companies in the news or industry trade journals, as you can often find quotes in articles from the relevant decision-maker."
"For our solar division, most of our relationships have been built via personal connections. As we roll out a new product for a specific application, we have sought to align ourselves with the market leader in the industry sector."
Advice and support
"We are very grateful to have received support from Invest NI to assist us with some of the costs of the in-market research. This has been via the Growth Accelerator Programme (GAP) and the ‘Going Dutch’ programme."
"The GAP has provided financial assistance to support the cost of travel to export markets to meet with potential partners. We launched our solar division during COVID so most of our sales activity was established via remote online meetings. Once travel restrictions were lifted, it was invaluable meeting people face-to-face to better build the relationships."
"The GAP has also supported attendance at various trade shows – there’s no better way to get face-to-face with potential distributors and customers."
"The Going Dutch programme went even further – Invest NI’s team conducted research and set up appointments for us before our market visit. Following the initial market visit, we now have a sales agent in the Netherlands."
"But perhaps the most significant impact Invest NI has had on our business has been the Key Worker Salary Grant. A contribution towards an employee's salary has helped us to bring on additional much-needed resources."
"Our export growth has been steady over the past few years. Between 2019 and 2023, our sales outside NI grew from 42% to 94%. This activity is still heavily focused on GB as our largest export market, but sales to the EU are increasing year-on-year. By the end of 2024, we anticipate EU sales will exceed 10% and may see sales into further new markets."
Business challenges and successes
"The only way to be effective going into a new market is to understand what you are getting yourself into. Insights from market research can guide product development, assess competitor activity and identify appropriate target customers. This approach helps you go into a market with a clear understanding of how you should be positioning your offering and who you want to sell to."
"Having a more strategic approach to market development has been a lesson for us. In the earlier days, we were guilty of trying to design products to suit all market applications simultaneously, but we quickly realised that we didn’t have the resources to do that. When we re-focused and concentrated on researching and launching one product application to one market segment at a time, everything became more manageable. Because we put most of our time and energy into researching and delivering for one market initially, we could more quickly dominate that market before moving on to the next application and the next to replicate the model.
"Having to ship a physical product abroad is still challenging today, particularly when despatching it to a new market for the first time. We have sought advice from a company specialising in customs arrangements when we’ve needed it."
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Advantages and disadvantages of researching export markets
In this guide:
- Researching export markets
- Advantages and disadvantages of researching export markets
- Researching export markets online
- Researching customers and markets abroad
- Conducting in-market export research
- Research product and packaging changes for export
- Top tips for conducting export market research
- Carrying out and commissioning research on overseas markets
- Researching export markets – Genie Insights
Advantages and disadvantages of researching export markets
The benefits and potential drawbacks of researching export markets before selling to them.
Researching potential export markets before you commit to entering them is a logical step but there are things to consider before you start.
Advantages of export market research
There are a number of benefits to undertaking market research before you enter new overseas markets, these include:
- spotting trends
- minimising risk
- identifying threats and opportunities
Disadvantages of export market research
There can be potential drawbacks to conducting market research, these may include:
- the expense of accessing expert information
- outdated information leading to bad decision-making
- it can be time-consuming
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Researching export markets online
Ways of conducting online research on export markets.
Conducting thorough online research can help you pull together valuable information which can be crucial to your export planning. It will help inform your decision making in a timely and cost-effective way.
Researching potential overseas markets online can help you:
- assess market potential
- find customers
- analyse your competition
- assess market barriers and risks
- find the best routes to market
Read more about the things you should consider when trading with the EU and when trading with GB and countries outside the EU.
Business risk reports
Read the Overseas Business Risk reports for information on political instability, terrorism, crime, corruption, human rights issues and intellectual property risks.
EU Market Access Database
You can check the EU Market Access Database to research a country's duty rates and licensing rules.
Check whether EU wide technical rules or national rules apply if you're sending goods within the EU. If technical rules or national rules apply, you can get advice from the product contact point for that country.
Invest NI Business Information Centre
The Invest NI Business Information Centre provides free access to market research, company databases, and other business information to help local companies develop their markets, identify export opportunities and find new customers.
The Centre is located at Invest NI's office in Belfast. The wide range of business information includes:
- trade and business journal collection
- details of trade fairs
- worldwide country profiles
- tenders information
- guidance on import/export procedures and business agreements
To access this information, call the Invest NI helpline on Tel 0800 181 4422.
Tenders Alert Service
The Invest NI Tenders Alert Service allows you to identify local, UK and European contract opportunities from a wide range of public sector organisations via a daily email alert service. It also has information about selling to the government - it has compiled a NI Councils Procurement fact sheet giving contacts for buyers and brief data on how they buy goods and services.
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Researching customers and markets abroad
Research overseas markets, consumers and countries to make informed decisions about your business.
When researching overseas markets, you will need to identify your potential customers and their needs, by considering the following factors:
- Who will buy from you? Each marketplace is different. For example, you may find that your overseas customers are in the public sector, while those in your home market are small businesses.
- What influences customers' purchasing decisions? This could include culture, age, gender and many other factors.
- Why do customers buy from you? Consider what you need to know about your customers' needs.
- What price can the product profitably sell for? This will influence your pricing and marketing decisions.
Read more about how to create customer personas.
You need to establish:
- Size of your potential market - this could be limited by population, cultural or economic factors.
- Politics and economics - an unstable political climate or unfavourable trading conditions can make exporting risky.
- Culture - this may affect your selling proposition. Investigate any barriers to your product's success. Will your product be valued the same as at home? Will your customers have the same reasons to buy it?
- Language and etiquette - can you market your product effectively in the local language? Will you have access to professional translators and marketing agencies? It is important to communicate effectively and understand cultural differences.
- Safety and security - the risks presented by local terrorist activities as well as the global risk of indiscriminate terrorist attacks. Also, the level of crime in the target market. Read more about overseas business risk.
- You can also find travel and security information in your target market.
Support for researching other countries
When researching potential countries to sell to, you can find information from the following:
- Invest NI support for selling outside Northern Ireland
- The Department for Business and Trade support for planning entry into new overseas markets
- Search for commercially available research from Market Research World
- Trade visits provide valuable first-hand experience
Invest NI Graduate to Export programme
The Graduate to Export programme from Invest NI aims to help Northern Ireland companies with their growth plans by providing them with support to employ a graduate for up to eighteen months to take forward a market research project that targets a specific overseas market. Read more about the Graduate to Export programme and its eligibility criteria.
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Conducting in-market export research
Ways of conducting in-market research on export markets.
Once you have gathered enough information through online research to help you choose appropriate markets for your product or service, you should then conduct some in-market research.
Visiting your target market will allow you to gather specific information on the market for your product or service. You could also visit a trade show or conference, or participate in a trade mission. The data you gather in-market should be accurate and up-to-date.
Overseas Market Introduction Service
The Overseas Market Introduction Services (OMIS) is a chargeable service offered by the Department for International Trade through its network of staff in overseas embassies and consulates. It can be commissioned and managed online. OMIS offers:
- bespoke market research, sector advice and market entry strategies
- support during overseas visits
- identification of possible business partners
- help to prepare for exhibitions, events and trade fairs
Contact an International Trade Adviser (ITA) to find out about OMIS. Your ITA can help with advice on all aspects of exporting.
Trade Advisory Scheme
The Trade Advisory Service provides businesses with tailored export consultancy from Invest Northern Ireland advisors based in overseas markets. For information on the Trade Advisory Scheme call the Invest NI Business Support helpline on Tel 0800 181 4422.
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Source URL
/content/conducting-market-export-research
Links
Research product and packaging changes for export
Adjusting your product to comply with law overseas.
You may need to adjust your product or its packaging to comply with local laws and regulations. For example, there may be specific health and safety standards in your target country that differ from those in the UK. It is your responsibility to make sure you comply - and errors can be costly.
You may need to adjust your product or operational set-up to comply with local laws.
You should investigate:
- local export legislation and technical regulations
- certification and testing requirements
- local standards affecting your existing and future products
- product liability
- quantities and units
- patents and trade marks
- staff qualifications
Find out about the Invest NI support available for exporters.
You may need detailed information on international aspects of standards, accreditation and measurement infrastructure, including more specific facts and figures for a number of countries. You should also be aware that your product may need an export licence, or be subject to import duty and sales tax outside the European Economic Area.
The British Standards Institute (BSI) international projects department can help you deal with technical barriers to trade including any regulatory issues you might face.
Read more about how to make your product packaging effective and how to package food for export or import.
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Source URL
/content/research-product-and-packaging-changes-export
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Top tips for conducting export market research
Five top tips to help you conduct your export market research.
Researching your potential customers, competitors and the trading environment in your target overseas markets, you will increase your chance of success.
The following tips will help you successfully research your export markets before committing to entering them.
- Use online databases to investigate the demand for your products in new markets as well as if the market share is there - read more about researching export markets online.
- Consider visiting the markets. Visit your target market to gather specific information on the opportunities for your product or service - read more about conducting in-market export research.
- Get help - Before you make your first move into an overseas market, you should seek expert advice and support. Find out about the available support for exporting.
- Confirm the reliability of your data with multiple sources.
- Research the laws, legislations, taxes and trading standards in the countries you're hoping to trade in - view a range of exporting country guides.
Also on this siteContent category
Source URL
/content/top-tips-conducting-export-market-research
Links
Carrying out and commissioning research on overseas markets
Undertaking market research in overseas export markets.
Market research is available from government agencies and commercial organisations.
Conduct your own market research
You can conduct research using media sources, such as newspapers, trade journals and the internet, and get information by networking with experienced exporters. Your trade associations may be able to help you with contacts. For many small businesses, the best approach is to visit the market and spend some time interviewing a range of people. Read more about how to develop an exporting marketing plan.
GOV.UK produces 'sector in-country' reports for many markets.
Commission market research
You can commission a market research agency to investigate your overseas market on your behalf.
Decide whether you want to use a UK-based agency or a local one. A local agency may understand your potential customers better and will be able to access the necessary information more easily. You should select your agency carefully, and check that their proposal shows that they understand your needs.
State what you expect to find out from your research in a clear brief. This should specify your aims in commissioning the research, and the timescales and presentation you want. Describe your business and product, state the information required and the geographical scope.
Access published market reports
You can also buy reports on some overseas markets.
HelpActionsAlso on this siteContent category
Source URL
/content/carrying-out-and-commissioning-research-overseas-markets
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Researching export markets
Researching export markets – Genie Insights
Matt Reeve, Director of Genie Insights, explains how the business researches export markets.
Genie Insights provides complementary products and services to the transport and logistics industry. Their two primary divisions are fleet management software and solar solutions for commercial vehicles.
Matt Reeve, Director of Genie Insights, explains how the business researches export markets.
Export markets
"Until recently, our main customer base was within the island of Ireland, when we were solely supplying our fleet management software and offering other related consultancy services. However, in 2020, we moved into the supply of physical products (solar panels), which have a much broader scope for export."
"Our primary export market for our solar solutions is currently Great Britain, but we have started to move into some of Europe, specifically the Republic of Ireland, the Netherlands, Poland and Scandinavia."
Conducting market research
"When we first added solar panels to our business, we were a small team competing against businesses with larger sales teams. So, we had to devise a different approach that would allow us to punch above our weight. Instead of selling directly to the market, we built strategic distribution partnerships with original equipment manufacturers (OEMs) to supply our product. Although we had less control over the direct-to-market sales, we could leverage the OEM’s larger sales teams to get our product into the market."
"For our software product, we have used industry-specific databases that have given us the ability to prioritise potential customers based initially on fleet size. From there, we can then complete online research to find out more. As well as company websites and social media profiles, we’ve found it useful to search for companies in the news or industry trade journals, as you can often find quotes in articles from the relevant decision-maker."
"For our solar division, most of our relationships have been built via personal connections. As we roll out a new product for a specific application, we have sought to align ourselves with the market leader in the industry sector."
Advice and support
"We are very grateful to have received support from Invest NI to assist us with some of the costs of the in-market research. This has been via the Growth Accelerator Programme (GAP) and the ‘Going Dutch’ programme."
"The GAP has provided financial assistance to support the cost of travel to export markets to meet with potential partners. We launched our solar division during COVID so most of our sales activity was established via remote online meetings. Once travel restrictions were lifted, it was invaluable meeting people face-to-face to better build the relationships."
"The GAP has also supported attendance at various trade shows – there’s no better way to get face-to-face with potential distributors and customers."
"The Going Dutch programme went even further – Invest NI’s team conducted research and set up appointments for us before our market visit. Following the initial market visit, we now have a sales agent in the Netherlands."
"But perhaps the most significant impact Invest NI has had on our business has been the Key Worker Salary Grant. A contribution towards an employee's salary has helped us to bring on additional much-needed resources."
"Our export growth has been steady over the past few years. Between 2019 and 2023, our sales outside NI grew from 42% to 94%. This activity is still heavily focused on GB as our largest export market, but sales to the EU are increasing year-on-year. By the end of 2024, we anticipate EU sales will exceed 10% and may see sales into further new markets."
Business challenges and successes
"The only way to be effective going into a new market is to understand what you are getting yourself into. Insights from market research can guide product development, assess competitor activity and identify appropriate target customers. This approach helps you go into a market with a clear understanding of how you should be positioning your offering and who you want to sell to."
"Having a more strategic approach to market development has been a lesson for us. In the earlier days, we were guilty of trying to design products to suit all market applications simultaneously, but we quickly realised that we didn’t have the resources to do that. When we re-focused and concentrated on researching and launching one product application to one market segment at a time, everything became more manageable. Because we put most of our time and energy into researching and delivering for one market initially, we could more quickly dominate that market before moving on to the next application and the next to replicate the model.
"Having to ship a physical product abroad is still challenging today, particularly when despatching it to a new market for the first time. We have sought advice from a company specialising in customs arrangements when we’ve needed it."
Case StudyMatt ReevePrimary parentContent category
Source URL
/content/researching-export-markets-genie-insights
Links
Entering new markets - BubbleBum (video)
In this guide:
- Entering overseas markets
- Develop an export marketing plan
- Break-even analysis when exporting
- The different ways to enter overseas markets
- Advantages and disadvantages of opening an overseas operation
- Advantages and disadvantages of using an overseas agent
- Advantages and disadvantages of using an overseas distributor
- Finding and contracting with overseas agents and distributors
- Top tips for export success
- Entering new markets - BubbleBum (video)
Develop an export marketing plan
Use market research and trade visits to develop an exporting marketing plan.
It's essential to build a detailed export marketing plan, based on market research, for each of your overseas markets. Huge differences between markets and countries prevent the use of a 'one size fits all' approach.
Your export marketing plan should take into account your chosen approach to the market and your plans for logistics, order fulfilment, customer service and supplier management.
Export marketing plan considerations
Investigate your new market and how your product will fit into it. Consider the following questions:
- What's your priority - minimising potential costs or controlling the process?
- Do you have the market knowledge (and language skills) to make contacts and generate sales?
- Do you have the time and money to invest in setting up a local branch or subsidiary?
- Are there restrictions on the way you can enter the market? For example some countries may insist you form a joint venture with a local business.
- What is appropriate for your product? If it requires specialist after-sales support, selling through an intermediary may not be suitable.
- What are the usual distribution channels for products like yours in the target market?
Choose your target export markets
One of the key decisions you will make when exporting is choosing which markets to target. Trying to export to several different countries can be very expensive. Unless you tailor what you offer to suit each individual market, you may fail to offer what customers really want. Instead, it's usually best to focus on selling to one or two individual markets. See country guides: exporting to the EU and country guides: exporting to GB and outside the EU.
Read more about how to choose which export markets to enter.
Visit your target markets
Trade visits are organised visits to target markets. While they provide an excellent opportunity to research overseas markets, you can also use them to generate business.
Invest NI offers a range of services to help businesses going on trade visits to generate advance publicity in their target market. It also offers a range of other advice and financial support. Read more about the available support for exporting.
Research partners, logistics, and infrastructure
The distribution channels available for selling will vary between countries. There are several different ways to enter overseas markets.
Consider the following:
- How will you be paid by your overseas customers?
- Will the exchange rate be prone to excessive fluctuation?
- What's the communications infrastructure like?
- Does your target market have widespread access to telephones, faxes or the internet?
- Do you need UK freight forwarders experienced in your chosen market and product?
Read more about getting paid when selling overseas and transport options for moving your goods.
Communicate with customers abroad
As part of your promotion, you may want to communicate directly with customers in your export market. The choice you make will be defined by your budget and how effectively each method will reach the customers in your chosen market. Read more about the basics of advertising.
Alternatively, you may choose to buy in a database of potential customers from a direct mail agency. You should select the agency carefully to ensure you receive high-quality data. Read more about the basics of direct marketing.
Exporting marketing plan template
Download an export marketing plan template (doc, 162KB).
If you are importing, you will need to identify countries to trade with, as well as individual suppliers within those countries. You will also need to consider how you are going to manage overseas suppliers.
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Break-even analysis when exporting
Use a break-even analysis to determine how many products you must sell and at what price in order to make a profit.
A break-even analysis enables you to determine how many products you must sell and at what price in order to make a profit.
Your break-even point is when your business is producing enough revenue each month to cover all your fixed and variable costs.
Why is break-even important when exporting?
Conducting a break-even analysis lets you see what your minimum sales requirement is in order to avoid making a loss. This information can help inform your pricing strategy and help you understand how many products you will need to sell in any new market you enter.
By knowing where your break-even point is, you are able to establish:
- how many units you need to sell before you start to make a profit
- how much your sales can decline before you start to incur losses
- how reducing price or volume of sales will impact your profits
How to calculate break-even point
Break-even point is calculated using the following equation:
Break-even point = fixed cost / (sales price - variable cost)
When completing our break-even template you will need to input the following information:
- The profit you will be aiming for - make sure you consider what variable costs are involved in order to get your product to your chosen market.
- Your overheads - your overheads are your ongoing expenses when operating your business. These may include rent, mortgage or electricity payments.
- Your average unit price - this is the price you expect your customers to pay for your product.
- Labour costs - employee's salary.
- Material costs - tools, raw materials etc.
Break-even analysis template
Download our free Break-even analysis template.
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The different ways to enter overseas markets
An overview of your options for entering overseas markets.
When you decide to enter an overseas market, it's important that you identify the best approach for your business.
There are four main ways to sell to customers in overseas markets. You may find you need to use more than one entry strategy, depending on the markets you target and the products you offer.
Method of selling Description Selling directly from the UK This typically involves making periodic sales visits to the country, supplemented by telephone sales or accepting overseas orders on an e-commerce website. It can be a simple and cost-effective way to enter an overseas market. However, it may isolate you from your customers, and make you unable to share the exporting workload with partners or intermediaries.
Opening an overseas operation
This involves opening your own branch or subsidiary in the new market, or entering into a joint venture with a local business. Having a presence on the ground can be valuable, but setting it up and maintaining it may involve major resource commitments.
Using an overseas sales agent
A sales agent acts on your behalf in the overseas market, either by introducing you to a customer or by receiving commission on any sales to that customer. Agents are used extensively in the European Union and are protected from abusive business tactics by law. Ensure that you understand what you have agreed and seek legal advice on your agreement, as it's not advisable to operate without an agency agreement in place.
Using an overseas distributor
A distributor buys from you and then sells on at a higher price to their market and customers. They take full responsibility for the import of your goods. A distributor takes ownership of the goods and therefore can do with them as they wish, which means you must trust them with your brand.
Important considerations when entering overseas marketsThere is much more to exporting than simply generating overseas sales. An intermediary can help you with issues including customs and other paperwork, shipping, warehousing and after-sales service. Selling direct means you will have to handle these issues yourself.
Find out more about how to manage the risks of exporting.
When selling overseas, you can sell your product or service directly to customers or use an intermediary. You may decide a mix of these approaches is best for your business. There is no 'one size fits all' solution.
You should consider the implications of each method in terms of:
- the direct and indirect costs, such as investment in an overseas operation, or the heavy discounts often demanded by distributors
- how much control you'll retain over how your product is sold, and how much you'll need to delegate to partners or intermediaries
- which export-related risks you'll have to bear, such as exchange-rate movements, non-payment risks, longer trading cycles and delays due to documentation problems
An intermediary may be able to handle issues such as paperwork, shipping and warehousing. However, you will have less direct control. Selling directly may give you more control, but you will have to bear higher costs.
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Advantages and disadvantages of opening an overseas operation
A local office, subsidiary company or joint venture offers great flexibility.
Opening an operation in your overseas market is generally the most costly and time-consuming way to enter it, but the rewards can be great.
Local rules may restrict your options, but the three main ways to open an overseas operation are to set up:
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a local office - staffed by one or more of your employees
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a locally registered subsidiary company - a new business in the target market, subject to local company, employment and tax rules, and generally hiring some local staff
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a joint venture - partnering with a local business to set up a new business with ownership shared between you
Advantages of opening an overseas operation
A local office in this way gives you the chance to identify and exploit opportunities in your target market. It also gives you the flexibility to control your operation, and expand if necessary. There are other benefits:
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While intermediaries may opt for short-term sales, this way you can plan for the long term.
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Your customers will take you more seriously if you have a local base. This is particularly true if your products require specialist after-sales service.
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If you use a joint venture, you will be able to share the risk. You will also benefit from your partner's local knowledge and reputation.
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If you operate alone, all profits from the enterprise remain yours alone.
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A local subsidiary company offers limited liability if things go wrong. It is also easier to expand than a local office.
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It provides an opportunity to extend your intellectual property rights and registrations into other markets.
Disadvantages of opening an overseas operation
This option may require significant resources, and involves greater administrative and managerial burdens than other approaches to entering overseas markets:
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You will need to understand corporate, employment and tax law in the new territory, and use local specialists to help you.
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You may need to rebrand the business to attract local attention or if your existing business or product name has a different meaning in the new territory.
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Costs will be high if things go wrong.
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You have to take all the risks yourself (if you don't work with a local partner). These could include non-payment or regulatory compliance problems.
There are important legal and financial implications involved in setting up an overseas business. You should take advice from your solicitor, accountant or business adviser, as well as from similar professionals in the target market.
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Advantages and disadvantages of using an overseas agent
An overseas sales agent can be a low-cost option, but you need to choose carefully.
A sales agent acts on your behalf in the overseas market by introducing you to customers who you supply and invoice direct. They are paid a commission for any sales they make ranging between 2.5% and 15%. The key benefit of using an overseas sales agent is that you get the advantage of their extensive knowledge of the target market.
While there are clear benefits, agency relationships can also have downsides.
Advantages of using an overseas agent
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You avoid the recruitment, training and payroll costs of using your own employees to enter an overseas market.
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An agent should be well placed to identify and exploit opportunities.
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Your agent should already have solid relationships with potential buyers - it might take you some time to build up your own contacts.
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Using an agent allows you to maintain more control over matters such as final price and brand image - compared with the other intermediary option of using a distributor.
Disadvantages of using an overseas agent
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You remain responsible for shipping and other trade-related logistics - although your agent should be able to help.
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You need to specify in an agent's contract if you need them to credit check your customers for you.
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Arrangements must be made to allow access to your sales ledger as part of the commission payments process.
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After-sales service can be difficult when selling through an intermediary.
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You may lose some control over marketing and brand image, compared with entering the market yourself.
Read more about finding and contracting with overseas agents and distributors.
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Advantages and disadvantages of using an overseas distributor
Distributors take on many of the risks and burdens of trading overseas, but they expect heavy discounts in return.
A distributor buys your goods from you and then takes full responsibility for selling them on in the overseas market. While the role of a sales agent is to find you customers, a distributor is your customer.
Advantages of using an overseas distributor
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The main advantage of using a distributor is simplicity. Distributors enable you to access international markets while avoiding logistics issues and many trade-related risks.
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The distributor is usually responsible for the shipment of goods, and the accompanying customs formalities and paperwork.
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If you sell to a UK-based distributor, you avoid currency-related risks.
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It would be easier for a distributor with an established reputation and contacts list to introduce a new brand to the market than it would be for you.
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Distributors generally spend on marketing to support their sales effort, although they will sometimes expect you to make a financial contribution.
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A distributor will often offer credit facilities to potential customers.
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Many distributors carry a stock of the products they sell - so they buy in bulk, and take care of warehousing and inventory control in the overseas market.
Disadvantages of using an overseas distributor
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In return for taking on your trade-related risks and burdens, distributors will expect heavy discounts and generous credit terms from you.
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You may lose control of the way your products are marketed and priced.
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If you use a sales agent, you can use the commission structure to motivate them - there's no similar mechanism with a distributor.
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Distributors often demand a long period of exclusivity, so you need to be sure that you choose one that has experience selling your type of products and has customers for the kind of goods you sell. Read more about finding and contracting with overseas agents and distributors.
It's important to seek advice from your legal adviser before concluding a distributorship agreement.
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Finding and contracting with overseas agents and distributors
Make a shortlist of intermediaries and compare what they can offer you and how well each is run.
Make sure you conduct research before selecting an agent or distributor. Draw up a shortlist of at least three, then carefully compare what each can do for you.
Where to find agents and distributors
There are many organisations that can help you with your search, including:
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trade associations covering your sector
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membership bodies for businesses trading between the UK and your target country
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major banks - these have trade teams which may be able to help
You may also have the opportunity to join trade visits or attend exhibitions in your target country.
Choosing which intermediary to work with
The most important thing to establish is that an agent or distributor has proven experience in your target market. But there are many other factors to consider:
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Are they well located, with the geographical coverage you need?
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Are they well established in the market, and how do they compare with their own competition?
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Look at the product lines they currently sell - will your product fit in well?
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Ask about their strategy for the next five years - does it fit well with your objectives in the market?
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How large and experienced is their sales team? Is it well managed and given effective incentives?
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Can they provide you with market research to feed into your sales forecasts?
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Do they have the warehousing, servicing and other facilities you're looking for?
It's also important to look into their financial standing to ensure you're dealing with a reputable business that can be relied upon to pay you. This can be more difficult with overseas businesses, but it may be possible to conduct a status query through your bank.
International contracts
Make sure any agreement with an agent or distributor is formalised in a clear written contract. It's worth seeking expert advice - eg from a lawyer with trade-related experience or your local UK Trade & Investment team. Make sure you are satisfied with every part of the contract. Read more about getting paid when selling overseas.
Key contract points to consider include:
- Parties - the names and addresses of the businesses involved, and the nature of the relationship, eg agency or distributorship.
- Products - a clear description of your goods.
- Territory - the geographic area within which the agent or distributor will sell your goods.
- Exclusivity - will they have sole rights to sell your goods? If not what are the exceptions? Can they pass their job to a third party?
- Transport - whose responsibility? Your obligations should be clearly set out in a written contract using Incoterms 2020.
- Pricing - what price will you receive from a distributor for your goods? What price will an agent charge their customers?
- Commission - what commission will an agent receive?
- Payment terms - when will payments be made, in what currency, and at what exchange rate?
- Period - set a termination date for the agreement, and include clear provisions for ending the agreement before that date.
- Confidentiality - make sure that sensitive information about your business or products is protected.
- Intellectual property - what rights will the agent or distributor have to use your business name, brand names, trade marks etc? Read more about intellectual property protection overseas.
- After-sales care - for example, product liability, insurance and warranties. Who is responsible at each stage of the trading process?
- Marketing - what promotional activities will support your products and who will pay for them?
- Jurisdiction - which country's rules will apply to the contract?
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Top tips for export success
The following top tips will help you to get the support you need to begin exporting.
Before you make your first move into an overseas market, it's essential that you get the best advice and support for your specific business. This will increase your chances of export success. There is a range of support available to new and established businesses to help you start trading successfully outside Northern Ireland.
1. Register for training programmes: Training programmes and seminars provide an opportunity to get a feel for the potential of overseas markets. There is a range of export training and support available for you to access including:
- Going Dutch
- UK Export Academy
- InterTradeIreland Digital Sales Support
Read more about export training programmes.
2. Get in-market support: Once your business decides on your chosen market, there are numerous schemes to provide ongoing support:
- UK Tradeshow Programme
- Invest NI Trade Advisory Scheme
- Department for Business and Trade (DBT) in-market support
Read more about in-market support for exporting.
3. Do your research: It's important to know which markets offer the best fit with your business so that you can effectively target your export activity. Focused market research will increase your chances of successfully selling into markets outside Northern Ireland. Research support includes:
- Invest NI Business Information Centre
- Enterprise Europe Network
- InterTradeIreland Acumen programme
Read more about research support for exporting.
4. Get advice: There are several sources of advice for businesses in Northern Ireland wanting to trade overseas:
- Invest NI workshops, Export Development Service, Legal advice, translation services
- NI Chamber Export Documentation and Chamber Connections
Read more about advisory support for exporting.
5. Search for opportunities: Having knowledge of specific products or services that are in demand outside Northern Ireland, and keeping up-to-date on the latest contract opportunities, can help boost your business performance and profitability. You should consider:
- Invest NI Tenders Alert Service and tender guides
- NI Chamber Connecting for Growth
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Entering overseas markets
Entering new markets - BubbleBum (video)
Grainne Kelly, CEO and Founder of BubbleBum explains how they enter new markets.
BubbleBum is the maker of the world's first inflatable car booster seat for children. Their award-winning seat fits into a bag or glove compartment and is sold in over 20 countries.
CEO and Founder, Grainne Kelly explains the preparation needed when planning to enter new markets. She details the support they receive to help achieve this. Grainne also shares her experience of the challenges and benefits that breaking into new markets brings.
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What is a letter of credit?
What is a letter of credit?
What letters of credit are and when they are used.
A letter of credit - sometimes known as 'documentary credit' - is basically a conditional guarantee from a bank that a particular seller will receive a payment due from a particular buyer. The bank guarantees that the seller will receive a specified amount of money within a specified time providing documents called for under the credit are presented in order.
Why use a letter of credit?
Letters of credit are most commonly used when a buyer in one country purchases goods from a seller in another country. The seller may ask the buyer to provide a letter of credit to guarantee payment for the goods.
Read more about the advantages and disadvantages of letters of credit.
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Advantages and disadvantages of letters of credit?
The main advantages and disadvantages of letters of credit.
Before using letters of credit you should consider their advantages and disadvantages.
Advantages of letters of credit
The main advantage of using a letter of credit is that it can give security to both the seller and the buyer.
Advantages for sellers
- by asking for an appropriate letter of credit a seller is reassured that providing they present documents in order and within an agreed timeframe they will receive their money in full and on time
- a letter of credit is one of the most secure methods of payment for exporters as long as they meet all the terms and conditions
- the risk of non-payment is transferred from the seller to the bank (or banks)
Advantages for buyers
- when a buyer uses a letter of credit they get a guarantee that the seller will honour their side of the deal and provide documentary proof of this
Disadvantages of letters of credit
- it's important to be aware of the additional costs involved in using a letter of credit. Banks make charges for providing them, so it's sensible to weigh up the costs against the security benefits.
- if you're an exporter you should be aware that you'll only receive payment if you keep to the strict terms of the letter of credit. You'll need to give documentary proof that you have supplied exactly what you contracted to supply.
- using a letter of credit can sometimes cause delays and other administrative problems.
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When to use a letter of credit
Considering the options before deciding to use a letter of credit for an overseas transaction.
Exporting can provide businesses with extensive trading opportunities but can also present some challenges, particularly in the area of finance. One of these challenges is a mutual lack of trust between buyer and seller.
Buyers on the one hand may be afraid of paying up front for goods due to the risk of them not being delivered and the sellers on the other hand may be uncomfortable supplying the goods for fear they may not get paid. A letter of credit is the most commonly used solution to this issue. Payment is guaranteed to the seller providing documents called for, by the buyer, are presented in order and within the agreed timeframe.
Read more about how to manage the risks of exporting.
Exporters - deciding whether to ask for a letter of credit
Think carefully about whether or not you need to ask an overseas customer for a letter of credit. Some important things to consider include:
- National Exchange Controls - does the country you're exporting to have any?
- Costs - does the value of the order justify the bank charges and extra costs involved, and who pays these costs?
- The customer's creditworthiness - do they have a track record with you?
- Risks associated with the country you're exporting to - is it politically stable with a good reputation as an international trading partner?
- Normal trading practices - is it standard practice for exporters to use letters of credit when trading with that country, and/or in that particular commodity?
- Available advice and guidance - banks may recommend using of a letter of credit in certain trading situations regardless of other factors, while credit insurers sometimes insist on it.
Give some thought to alternative arrangements, such as credit insurance, export factoring or cash in advance terms.
If you do decide that a letter of credit is the best option you'll need to consider which type of letter to use. A 'confirmed and irrevocable' letter of credit is the most secure type.
It's wise to have a clear policy in your business about when to consider using a letter of credit. Reviewing your policy on a regular basis will help you avoid using them unnecessarily and possibly putting off would-be customers.
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Types of letter of credit
The main types of letters of credit and their key features.
There are five commonly used types of letter of credit. Each has different features and some are more secure than others. Sometimes a letter of credit may combine two types, such as 'confirmed' and 'irrevocable'.
Common types of letters of credit
Type of letter of credit Description Revocable A revocable letter of credit is uncommon because it can be changed or cancelled by the bank that issued it at any time and for any reason.
Irrevocable An irrevocable letter of credit cannot be changed or cancelled unless everyone involved agrees. Irrevocable letters of credit provide more security than revocable ones.
Confirmed A confirmed letter of credit is one to which a second bank, usually in the exporter's country adds its own undertaking that payment will be made. This is used when the exporter does not find the security of an unconfirmed credit sufficient due to issuing bank risk or political and/or economic risk associated with the importer's country.
An irrevocable and confirmed letter of credit has not only the commitment of the issuing bank but also a binding undertaking given by the confirming bank to pay when the documents are presented in accordance with the terms and conditions of the credit. So a confirmed letter of credit provides more security than an unconfirmed one.
Unconfirmed An unconfirmed letter of credit is one which has not been guaranteed or confirmed by any bank other than the bank that opened it. The advising bank forwards the letter of credit to the beneficiary without responsibility or undertaking on its part but confirming authenticity.
Transferable A transferable letter of credit can be passed from one 'beneficiary' (person receiving payment) to others. They're commonly used when intermediaries are involved in a transaction.
Other types of letters of creditType of letter of credit Description Standby A standby letter of credit is an assurance from a bank that a buyer is able to pay a seller. The seller doesn't expect to have to draw on the letter of credit to get paid. Revolving A single revolving letter of credit can cover several transactions between the same buyer and seller. Back-to-back Back-to-back letters of credit may be used when an intermediary is involved but a transferable letter of credit is unsuitable. Also on this siteContent category
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International rules for letters of credit
International rules and standards that govern most commercial letters of credit.
To standardise terms and procedures and avoid misunderstandings, a set of international rules for letters of credit have been developed by the International Chamber of Commerce (ICC).
Most commercial letters of credit are governed by these rules, which are referred to as Uniform Customs and Practice for Documentary Credits (UCP). The current version of the rules is UCP 600, which came into effect on 1 July 2007.
The UCP standards give definitions of important terms that are used in letters of credit. When referring to letters of credit, banks and others involved in international trade will generally use the UCP definitions of key terms and phrases.
UCP also sets out general documentary requirements and standard practices for handling letters of credit.
Using UCP 600 letters of credit
Because UCP 600 standards are internationally recognised it's always best to use letters of credit that are covered by them. If you're an importer you may well find that sellers require you to use UCP letters of credit.
If a letter of credit is subject to UCP it will state this somewhere on it. It might include a statement like 'This letter of credit is subject to the latest version of Uniform Customs and Practice for Documentary Credits published and updated by the International Chamber of Commerce'.
Be aware that in some instances the definitions and procedures set out in the UCP standards may differ from the laws of a particular country.
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Break-even analysis when exporting
In this guide:
- Entering overseas markets
- Develop an export marketing plan
- Break-even analysis when exporting
- The different ways to enter overseas markets
- Advantages and disadvantages of opening an overseas operation
- Advantages and disadvantages of using an overseas agent
- Advantages and disadvantages of using an overseas distributor
- Finding and contracting with overseas agents and distributors
- Top tips for export success
- Entering new markets - BubbleBum (video)
Develop an export marketing plan
Use market research and trade visits to develop an exporting marketing plan.
It's essential to build a detailed export marketing plan, based on market research, for each of your overseas markets. Huge differences between markets and countries prevent the use of a 'one size fits all' approach.
Your export marketing plan should take into account your chosen approach to the market and your plans for logistics, order fulfilment, customer service and supplier management.
Export marketing plan considerations
Investigate your new market and how your product will fit into it. Consider the following questions:
- What's your priority - minimising potential costs or controlling the process?
- Do you have the market knowledge (and language skills) to make contacts and generate sales?
- Do you have the time and money to invest in setting up a local branch or subsidiary?
- Are there restrictions on the way you can enter the market? For example some countries may insist you form a joint venture with a local business.
- What is appropriate for your product? If it requires specialist after-sales support, selling through an intermediary may not be suitable.
- What are the usual distribution channels for products like yours in the target market?
Choose your target export markets
One of the key decisions you will make when exporting is choosing which markets to target. Trying to export to several different countries can be very expensive. Unless you tailor what you offer to suit each individual market, you may fail to offer what customers really want. Instead, it's usually best to focus on selling to one or two individual markets. See country guides: exporting to the EU and country guides: exporting to GB and outside the EU.
Read more about how to choose which export markets to enter.
Visit your target markets
Trade visits are organised visits to target markets. While they provide an excellent opportunity to research overseas markets, you can also use them to generate business.
Invest NI offers a range of services to help businesses going on trade visits to generate advance publicity in their target market. It also offers a range of other advice and financial support. Read more about the available support for exporting.
Research partners, logistics, and infrastructure
The distribution channels available for selling will vary between countries. There are several different ways to enter overseas markets.
Consider the following:
- How will you be paid by your overseas customers?
- Will the exchange rate be prone to excessive fluctuation?
- What's the communications infrastructure like?
- Does your target market have widespread access to telephones, faxes or the internet?
- Do you need UK freight forwarders experienced in your chosen market and product?
Read more about getting paid when selling overseas and transport options for moving your goods.
Communicate with customers abroad
As part of your promotion, you may want to communicate directly with customers in your export market. The choice you make will be defined by your budget and how effectively each method will reach the customers in your chosen market. Read more about the basics of advertising.
Alternatively, you may choose to buy in a database of potential customers from a direct mail agency. You should select the agency carefully to ensure you receive high-quality data. Read more about the basics of direct marketing.
Exporting marketing plan template
Download an export marketing plan template (doc, 162KB).
If you are importing, you will need to identify countries to trade with, as well as individual suppliers within those countries. You will also need to consider how you are going to manage overseas suppliers.
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Break-even analysis when exporting
Use a break-even analysis to determine how many products you must sell and at what price in order to make a profit.
A break-even analysis enables you to determine how many products you must sell and at what price in order to make a profit.
Your break-even point is when your business is producing enough revenue each month to cover all your fixed and variable costs.
Why is break-even important when exporting?
Conducting a break-even analysis lets you see what your minimum sales requirement is in order to avoid making a loss. This information can help inform your pricing strategy and help you understand how many products you will need to sell in any new market you enter.
By knowing where your break-even point is, you are able to establish:
- how many units you need to sell before you start to make a profit
- how much your sales can decline before you start to incur losses
- how reducing price or volume of sales will impact your profits
How to calculate break-even point
Break-even point is calculated using the following equation:
Break-even point = fixed cost / (sales price - variable cost)
When completing our break-even template you will need to input the following information:
- The profit you will be aiming for - make sure you consider what variable costs are involved in order to get your product to your chosen market.
- Your overheads - your overheads are your ongoing expenses when operating your business. These may include rent, mortgage or electricity payments.
- Your average unit price - this is the price you expect your customers to pay for your product.
- Labour costs - employee's salary.
- Material costs - tools, raw materials etc.
Break-even analysis template
Download our free Break-even analysis template.
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The different ways to enter overseas markets
An overview of your options for entering overseas markets.
When you decide to enter an overseas market, it's important that you identify the best approach for your business.
There are four main ways to sell to customers in overseas markets. You may find you need to use more than one entry strategy, depending on the markets you target and the products you offer.
Method of selling Description Selling directly from the UK This typically involves making periodic sales visits to the country, supplemented by telephone sales or accepting overseas orders on an e-commerce website. It can be a simple and cost-effective way to enter an overseas market. However, it may isolate you from your customers, and make you unable to share the exporting workload with partners or intermediaries.
Opening an overseas operation
This involves opening your own branch or subsidiary in the new market, or entering into a joint venture with a local business. Having a presence on the ground can be valuable, but setting it up and maintaining it may involve major resource commitments.
Using an overseas sales agent
A sales agent acts on your behalf in the overseas market, either by introducing you to a customer or by receiving commission on any sales to that customer. Agents are used extensively in the European Union and are protected from abusive business tactics by law. Ensure that you understand what you have agreed and seek legal advice on your agreement, as it's not advisable to operate without an agency agreement in place.
Using an overseas distributor
A distributor buys from you and then sells on at a higher price to their market and customers. They take full responsibility for the import of your goods. A distributor takes ownership of the goods and therefore can do with them as they wish, which means you must trust them with your brand.
Important considerations when entering overseas marketsThere is much more to exporting than simply generating overseas sales. An intermediary can help you with issues including customs and other paperwork, shipping, warehousing and after-sales service. Selling direct means you will have to handle these issues yourself.
Find out more about how to manage the risks of exporting.
When selling overseas, you can sell your product or service directly to customers or use an intermediary. You may decide a mix of these approaches is best for your business. There is no 'one size fits all' solution.
You should consider the implications of each method in terms of:
- the direct and indirect costs, such as investment in an overseas operation, or the heavy discounts often demanded by distributors
- how much control you'll retain over how your product is sold, and how much you'll need to delegate to partners or intermediaries
- which export-related risks you'll have to bear, such as exchange-rate movements, non-payment risks, longer trading cycles and delays due to documentation problems
An intermediary may be able to handle issues such as paperwork, shipping and warehousing. However, you will have less direct control. Selling directly may give you more control, but you will have to bear higher costs.
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Advantages and disadvantages of opening an overseas operation
A local office, subsidiary company or joint venture offers great flexibility.
Opening an operation in your overseas market is generally the most costly and time-consuming way to enter it, but the rewards can be great.
Local rules may restrict your options, but the three main ways to open an overseas operation are to set up:
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a local office - staffed by one or more of your employees
-
a locally registered subsidiary company - a new business in the target market, subject to local company, employment and tax rules, and generally hiring some local staff
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a joint venture - partnering with a local business to set up a new business with ownership shared between you
Advantages of opening an overseas operation
A local office in this way gives you the chance to identify and exploit opportunities in your target market. It also gives you the flexibility to control your operation, and expand if necessary. There are other benefits:
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While intermediaries may opt for short-term sales, this way you can plan for the long term.
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Your customers will take you more seriously if you have a local base. This is particularly true if your products require specialist after-sales service.
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If you use a joint venture, you will be able to share the risk. You will also benefit from your partner's local knowledge and reputation.
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If you operate alone, all profits from the enterprise remain yours alone.
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A local subsidiary company offers limited liability if things go wrong. It is also easier to expand than a local office.
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It provides an opportunity to extend your intellectual property rights and registrations into other markets.
Disadvantages of opening an overseas operation
This option may require significant resources, and involves greater administrative and managerial burdens than other approaches to entering overseas markets:
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You will need to understand corporate, employment and tax law in the new territory, and use local specialists to help you.
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You may need to rebrand the business to attract local attention or if your existing business or product name has a different meaning in the new territory.
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Costs will be high if things go wrong.
-
You have to take all the risks yourself (if you don't work with a local partner). These could include non-payment or regulatory compliance problems.
There are important legal and financial implications involved in setting up an overseas business. You should take advice from your solicitor, accountant or business adviser, as well as from similar professionals in the target market.
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Advantages and disadvantages of using an overseas agent
An overseas sales agent can be a low-cost option, but you need to choose carefully.
A sales agent acts on your behalf in the overseas market by introducing you to customers who you supply and invoice direct. They are paid a commission for any sales they make ranging between 2.5% and 15%. The key benefit of using an overseas sales agent is that you get the advantage of their extensive knowledge of the target market.
While there are clear benefits, agency relationships can also have downsides.
Advantages of using an overseas agent
-
You avoid the recruitment, training and payroll costs of using your own employees to enter an overseas market.
-
An agent should be well placed to identify and exploit opportunities.
-
Your agent should already have solid relationships with potential buyers - it might take you some time to build up your own contacts.
-
Using an agent allows you to maintain more control over matters such as final price and brand image - compared with the other intermediary option of using a distributor.
Disadvantages of using an overseas agent
-
You remain responsible for shipping and other trade-related logistics - although your agent should be able to help.
-
You need to specify in an agent's contract if you need them to credit check your customers for you.
-
Arrangements must be made to allow access to your sales ledger as part of the commission payments process.
-
After-sales service can be difficult when selling through an intermediary.
-
You may lose some control over marketing and brand image, compared with entering the market yourself.
Read more about finding and contracting with overseas agents and distributors.
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Advantages and disadvantages of using an overseas distributor
Distributors take on many of the risks and burdens of trading overseas, but they expect heavy discounts in return.
A distributor buys your goods from you and then takes full responsibility for selling them on in the overseas market. While the role of a sales agent is to find you customers, a distributor is your customer.
Advantages of using an overseas distributor
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The main advantage of using a distributor is simplicity. Distributors enable you to access international markets while avoiding logistics issues and many trade-related risks.
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The distributor is usually responsible for the shipment of goods, and the accompanying customs formalities and paperwork.
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If you sell to a UK-based distributor, you avoid currency-related risks.
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It would be easier for a distributor with an established reputation and contacts list to introduce a new brand to the market than it would be for you.
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Distributors generally spend on marketing to support their sales effort, although they will sometimes expect you to make a financial contribution.
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A distributor will often offer credit facilities to potential customers.
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Many distributors carry a stock of the products they sell - so they buy in bulk, and take care of warehousing and inventory control in the overseas market.
Disadvantages of using an overseas distributor
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In return for taking on your trade-related risks and burdens, distributors will expect heavy discounts and generous credit terms from you.
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You may lose control of the way your products are marketed and priced.
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If you use a sales agent, you can use the commission structure to motivate them - there's no similar mechanism with a distributor.
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Distributors often demand a long period of exclusivity, so you need to be sure that you choose one that has experience selling your type of products and has customers for the kind of goods you sell. Read more about finding and contracting with overseas agents and distributors.
It's important to seek advice from your legal adviser before concluding a distributorship agreement.
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Finding and contracting with overseas agents and distributors
Make a shortlist of intermediaries and compare what they can offer you and how well each is run.
Make sure you conduct research before selecting an agent or distributor. Draw up a shortlist of at least three, then carefully compare what each can do for you.
Where to find agents and distributors
There are many organisations that can help you with your search, including:
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trade associations covering your sector
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membership bodies for businesses trading between the UK and your target country
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major banks - these have trade teams which may be able to help
You may also have the opportunity to join trade visits or attend exhibitions in your target country.
Choosing which intermediary to work with
The most important thing to establish is that an agent or distributor has proven experience in your target market. But there are many other factors to consider:
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Are they well located, with the geographical coverage you need?
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Are they well established in the market, and how do they compare with their own competition?
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Look at the product lines they currently sell - will your product fit in well?
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Ask about their strategy for the next five years - does it fit well with your objectives in the market?
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How large and experienced is their sales team? Is it well managed and given effective incentives?
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Can they provide you with market research to feed into your sales forecasts?
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Do they have the warehousing, servicing and other facilities you're looking for?
It's also important to look into their financial standing to ensure you're dealing with a reputable business that can be relied upon to pay you. This can be more difficult with overseas businesses, but it may be possible to conduct a status query through your bank.
International contracts
Make sure any agreement with an agent or distributor is formalised in a clear written contract. It's worth seeking expert advice - eg from a lawyer with trade-related experience or your local UK Trade & Investment team. Make sure you are satisfied with every part of the contract. Read more about getting paid when selling overseas.
Key contract points to consider include:
- Parties - the names and addresses of the businesses involved, and the nature of the relationship, eg agency or distributorship.
- Products - a clear description of your goods.
- Territory - the geographic area within which the agent or distributor will sell your goods.
- Exclusivity - will they have sole rights to sell your goods? If not what are the exceptions? Can they pass their job to a third party?
- Transport - whose responsibility? Your obligations should be clearly set out in a written contract using Incoterms 2020.
- Pricing - what price will you receive from a distributor for your goods? What price will an agent charge their customers?
- Commission - what commission will an agent receive?
- Payment terms - when will payments be made, in what currency, and at what exchange rate?
- Period - set a termination date for the agreement, and include clear provisions for ending the agreement before that date.
- Confidentiality - make sure that sensitive information about your business or products is protected.
- Intellectual property - what rights will the agent or distributor have to use your business name, brand names, trade marks etc? Read more about intellectual property protection overseas.
- After-sales care - for example, product liability, insurance and warranties. Who is responsible at each stage of the trading process?
- Marketing - what promotional activities will support your products and who will pay for them?
- Jurisdiction - which country's rules will apply to the contract?
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Top tips for export success
The following top tips will help you to get the support you need to begin exporting.
Before you make your first move into an overseas market, it's essential that you get the best advice and support for your specific business. This will increase your chances of export success. There is a range of support available to new and established businesses to help you start trading successfully outside Northern Ireland.
1. Register for training programmes: Training programmes and seminars provide an opportunity to get a feel for the potential of overseas markets. There is a range of export training and support available for you to access including:
- Going Dutch
- UK Export Academy
- InterTradeIreland Digital Sales Support
Read more about export training programmes.
2. Get in-market support: Once your business decides on your chosen market, there are numerous schemes to provide ongoing support:
- UK Tradeshow Programme
- Invest NI Trade Advisory Scheme
- Department for Business and Trade (DBT) in-market support
Read more about in-market support for exporting.
3. Do your research: It's important to know which markets offer the best fit with your business so that you can effectively target your export activity. Focused market research will increase your chances of successfully selling into markets outside Northern Ireland. Research support includes:
- Invest NI Business Information Centre
- Enterprise Europe Network
- InterTradeIreland Acumen programme
Read more about research support for exporting.
4. Get advice: There are several sources of advice for businesses in Northern Ireland wanting to trade overseas:
- Invest NI workshops, Export Development Service, Legal advice, translation services
- NI Chamber Export Documentation and Chamber Connections
Read more about advisory support for exporting.
5. Search for opportunities: Having knowledge of specific products or services that are in demand outside Northern Ireland, and keeping up-to-date on the latest contract opportunities, can help boost your business performance and profitability. You should consider:
- Invest NI Tenders Alert Service and tender guides
- NI Chamber Connecting for Growth
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Entering overseas markets
Entering new markets - BubbleBum (video)
Grainne Kelly, CEO and Founder of BubbleBum explains how they enter new markets.
BubbleBum is the maker of the world's first inflatable car booster seat for children. Their award-winning seat fits into a bag or glove compartment and is sold in over 20 countries.
CEO and Founder, Grainne Kelly explains the preparation needed when planning to enter new markets. She details the support they receive to help achieve this. Grainne also shares her experience of the challenges and benefits that breaking into new markets brings.
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