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 Growing Global APPMA Manufacturers and Distributors: How to Overcome the Major Obstacles to Exporting By Neil Lenok Managing Director, American River International United States firms, including those involved in the pet products industry, are in a perfect position to increase their sales and experience future growth in the global marketplace. Political and economic events in the world market have opened doors and created opportunities that APPMA members can take advantage of and which can lead to greater prosperity. The value of the dollar makes exported goods strong and viable commodities. As with any new venture, it must be noted that these opportunities can also present certain risks. The keys are understanding the risks and mitigating them, therefore, creating the best opportunity for export success. Many pet product manufacturers and distributors are hesitant to export because of the perceived complications, frustrations and exposures. While many of these are real, many are not as onerous as one may think. The successful pet product exporter has learned to deal with the risks of global sales and create cost effective hands-on solutions. The risks are not “immovable walls”…. but are only “obstacles”. The key is to find ways to navigate safely through the obstacles. Personally, in our export business, I find the obstacles “challenges”. These challenges make the work more interesting for me. Understanding, evaluating and managing the exposures and risks is a critical factor in successful exporting. Some of the obstacles we face today come in the areas of: • Export Compliance • Documentation • Language Barriers • High Freight Costs • Lack of Resources • Selection of Distributors I could write a book on dealing with all these issues, so to present this message in a succinct fashion, I want to stress the most important issue, which is the importance of dealing with quality professionals for assistance. There are numerous companies, including American River International and government agencies, which specialize in the area of assisting U.S. manufacturers with their export needs. An experienced international freight forwarder can mitigate many potential obstacles; from helping to negotiate payment on a letter of credit, to helping assuage the onerous documentation and compliance process. A qualified lawyer who specializes in international business can prove their weight in gold by protecting an exporter on the issue of their proprietary rights in a foreign country. An international attorney will also help to ensure that the contract you sign with foreign distributors will protect your rights in the overseas country. Who has the responsibility for advertising, payment of the licensing fees, and ownership of the customer lists once the relationship ceases? Just a few of the issues a good lawyer can help mitigate. There are also consultants who specialize in the area of identifying overseas distributors for pet products. These consultants can go as far as offering advice on packaging and labeling for different markets, as well as helping to discern the process of selecting the best distributor. The U.S. government, through the Dept. of Agriculture and the Dept. of Commerce, also offers services, for nominal fees, that can help U.S. exporters identify potential overseas distributors. The USDA is currently working with a number of APPMA members on these and other related issues. You may contact the APPMA Member Services Department for more details on the government programs (203-532-0000 or memberservices@appma.org). Finally, one cannot proceed in international business without a bank that has experience as well as international offices. In addition to minimizing the risk of not being paid on a letter of credit shipment, a good banker can also help prevent an exporter from becoming involved in a transaction through a foreign bank that may be sanctioned by the Office of Foreign Asset Controls (OFAC). This office is run through the Treasury Department. Not adhering to their standards may result in funds not being transferred, and in a worst-case scenario, fines, penalties and suspension of export privileges for U.S. exporters. As more and more countries improve their economies, pet ownership becomes a symbol of affluence. This creates tremendous opportunities for APPMA members to thereby export their products. The key is that while there are risks involved, dealing with quality export professionals can help us identify and alleviate problems upfront so we may turn our risks into opportunities and long-term lucrative deals. Aligning yourself with quality service providers in the three areas of export trade: logistics, legal/consulting and banking, can shorten your learning curve and provide you with valuable skill sets, not only making exporting more fun, but more lucrative. Quality service providers…. Don’t add cost…. They add value. Neil Lenok can be contacted at 1-800-524-2493, or via email at neil@worldest.com American River International has been successfully engaged by APPMA for the past six years to assist the Association and its members in conducting business in the global arena. |
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