10 Top Misconceptions in Trade Management for the Global Supply Chain
What is thought is not in fact reality. There are common misconceptions that affect a company’s motivation to diversify and break into international trade. With the right knowledge, high-tech startups, health sciences, established domestic supply chains, and any business can possess the ability to leverage additional resources and create new markets for additional revenue. Here are 10 misconceptions that deter companies from trade management when looking to take their supply chain global.
Trade Management Myth 1: There is too much risk
Start-ups in the high-tech space and even established domestic supply chain players already see a challenge in staying in the red within their current scope. The fear of additional international issues deters them from the attempt to go global. According to the National Small Business Association, those that export internationally are 9 percent less likely to fail as compared to solely domestic businesses. Diversifying and employing trade management practices helps companies to mitigate unforeseen local changes and introduces them to a new customer base.
Myth 2: There is too much to learn
International trade does have its rules and procedures. Looking at the bigger picture, it only takes a few new rules to start expanding. There are a variety of agencies and websites focused on supporting international trade. Cities have world trade centers that provide support and every state can provide additional resources. The U.S. Commercial Service (USCS) helps small companies find business contacts overseas at buyusa.gov. The USCS offers free and low-cost services and even organizes international trade missions.
Myth 3: The business will face additional international competition
In fact, many markets are underserved. Companies may face more competition at home than abroad. Businesses may find that they have an easier time establishing a niche in China or India where consumers are always looking for new status-producing items and where growing business industries will need services. Consumers want more choices; companies focused on proper trade management and supply chain excellence can be agile enough to deliver.
Myth 4: Only large established companies have the resources to go international
According to the U.S. Department of Commerce, 72 percent of U.S. exporters have less than 20 employees. Small companies and rapidly growing, investor-backed startups, have more flexibility and with some ingenuity in trade management or by hiring experts who can rapidly scale your new global supply chain expansion can meet the expectations of their partners.
Myth 5: It is impossible to reach customers
The internet reduces the need for global travel. Marketing strategies such as Google Adwords can be used to target an audience both in the U.S. and abroad. Cities and organizations host international trade shows with participants eager to make new connections. Resources such as the U.S. Chamber of Commerce and the Small Business Administration’s Small Business Development Centers at sba.gov can help businesses find partners overseas that will reach out to potential customers.
Myth 6: Shipping abroad is too complex
Logistics and supply chain service providers have a wide global network and infrastructure that allows for timely deliveries internationally as well as visibility through technology. Many smaller shipping companies are also able to provide multiple shipping options to meet customer and company needs.
Myth 7: People dislike Americans
Political issues between countries or personal preferences have very little to do with the desire to do business with America. The economy is global and America is still seen as a linchpin to commercial success. Further, supply chain services providers, like Flash Global, have the resources in-country such as people, forward stocking locations, distribution centers, and command centers which further mitigates your global expansion.
Myth 8: Language will be an issue
When it comes to business, companies know the value of speaking English. Most companies and representatives will either have a working level of the language themselves or have an interpreter on hand to facilitate communication.
Myth 9: Made in the USA means production occurs within our country.
The “Factoryless Goods” rebranding initiative in a current proposal will permit products made offshore as “U.S. exports.” This allows businesses to benefit from less expense within the manufacturing process and still hold on to the “Made in the USA” cache.
And Trade Management Myth 10: Business only benefits from trading with countries that are “similar” to us.
The positive effects on per capita income are greater with disparate economies. This is based upon our higher relative cost advantages and their increased relative cost advantages. The majority of American business is done with Canada and the European Economic Community. This leaves more opportunity for doing business with “dissimilar” economies such as Brazil, India, and APAC countries.
Establishing a global supply chain can financially benefit a business and reach new markets and opportunities. Starbucks’ “inspiration” came from Italy and Energy Drinks were popular in Thailand before ever being “invented” on American soil. The trend can go in reverse as well with a focus on trade management. A product with stiff local competition can prove to be a rarity abroad. Being observant and responding to opportunities is key to going global. Getting past misconceptions in trade management can help a business diversify and generate additional streams of revenue.
Flash Global is a leader in global supply chain services. When considering expansion, adding visibility into the supply chain process helps to provide more cash to businesses and respond quickly to any concerns or opportunities. Create a lean efficient process that can manage international suppliers and manufacturers with Flash Global. Contact Flash Global today to inquire about how we can provide engineered solutions in trade management for your global supply chain.