Interview with iadvisor Dr Sandy Chong: Tips on Exporting

iadvisor Dr Sandy Chong shares pointers for Singapore companies to take note of when exporting.

Before Singapore companies embark on their exporting journey, what are some questions they should ask themselves?

• What are the reasons for pursuing export markets? Is it consistent with other company goals?

• How committed is the top management about its export endeavour? How will the demands of the export goals be met?

• What expectations the owner & senior executives of the company have for its export effort?

• Given the size of the company, nature of the products, and previous experience of export, is the company willing to invest & learn about the conditions of the selected market overseas?

• Are the expected benefits worth the costs or would it be better used for developing new domestic business?

Export negotiations remains one of the major problems that exporting companies face. What are some of the pitfalls of export negotiations and how do companies avoid them?

• Skipping or undermining the importance of due diligence such as background checks of prospects, research of the market and the business condition of the country. The firm should have a good idea of the above, prior to meeting the prospects.

• Lowering price & offering discounts are not always the best way to attract buyers. There are non-price related benefits that some firms overlook in export negotiation. Other than pricing structure and profit potential, incentives such as offering them sales aids, training, advertising & promotion support, aftersales service, & reliable response time are terms that can strengthen your negotiation position and gain long term buy-in in the selected overseas market.

• Insufficient attention paid to safeguarding the companies' interests in cases where the overseas buyer proves less than satisfactory with its performance. It is vital to include an escape clause in the agreement and an amicable exit strategy to ensure the relationship ends safely & cleanly should there be failure of expectations by either party.

How should companies manage their international distribution channels for maximum effect?

• Keeping it lean - better in terms of control & maintaining good service level.

• Cultivate trust & mutually-beneficial relationship with its channel partners.

• Capitalize on Information Systems & the Web - keep better records, automate logistical functions, more seamless ordering & delivery experience & better tracking of market demands & cycles.

All answers are provided to the best knowledge of the iadvisors at the point of answering, and are solely represented by the iadvisors, not IE Singapore.

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