Cross-border trade offers lucrative opportunities for small businesses. If your company is prepared to tackle a cross-border expansion, this article will tell you how you can improve your scope of success.
Beware of the Risks and Protect Your Interests
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Cross-border trade involves substantial financial risk. Be it non-payment, fraud, currency fluctuations, or supply line problems, they can all affect the company’s bottom line. Expansive research is by far the first and best defense. You will want to connect with experts as well as professionals who can help reduce your exposure to such risks.
Different ways to safeguard your business interests feature cross-border guarantees as well as standby letters of credit issued by banks to assure you that your US customers and suppliers can duly pay.
Locate Lucrative Cross-Border Trade Opportunities
Trade shows, missions, and online sales are relatively inexpensive ways to attain your target markets. Personal relationships matter, and attending shows or missions is a good way to make initial contact with prospective cross-border customers. Here are additional sources for opportunities:
- CanadExport: US trade opportunities, programs, fairs, and missions
- Canadian Trade Commissioner: Market studies as well as advice by industry sector
- Trade Data Online: Industry Canada tracking of US sales data in a variety of sectors
- U.S. Bureau of Economic Analysis: US market data
- U.S. Government Procurement: Government of Canada’s counsel site for prospective sellers to the US government
Understand the Financials that Impact Trade
Bring down your financial risks by factoring in known charges, fees, and costs into the products and pricing. Have you thought of exchange rates in your pricing? Do you have a strategy if exchange rates turn unfavorable? Here are a few other such costs to consider:
- Brokerage fees
- Border tolls
- Duties
- Tariffs
- Taxes
- Inspection fees
- Storage fees
You should make sure that you have enough supplies, stock, employees, and equipment to tackle the potential growth of your business that might accompany cross-border trade. If you require more funds to support cross-border expansion, have a chat with a cross-border legal expert to see what you might need.
Partner with Firms Experienced in Cross-Border Trade
There are firms with the experience, contacts, and infrastructure to get your products to and from cross-border markets rapidly and seamlessly. Make good use of these companies to outsource all the bulky paperwork and duly calculate the taxes and duties. These firms also do the heavy lifting in matters of marketing, order fulfillment, warehousing, and distribution services. For your various products, companies like freight consolidators can bring together shipments and greatly reduce the fees and shipping costs. Finally, make sure you include all such costs when pricing the products.
Work Alongside Experts
If you are looking for ways to expand your business, cross-border trade is a lucrative option. But do consider the risks and the opportunities alike, and get some cross-border legal expert advice to help make up your mind as to whether this opportunity could work out in favor of you and your business.
