Why Do Exporters Fail in the International Market?

Starting an Export Import business can be very lucrative and rewarding if you have the right prior guidance. It is very easy to start, but easier to fail if you fail to address the below highlighted points.

The questions to answer are:

1. What are the profitable products?

2. What would be their target countries or market?

3. How to get the buyers (clients)?

To elaborate more on the Failure factors, please read below. It is very profitable if you can learn these points so you can pilot above the risks.

1 — Lack of international experience

The main reason for failure is the lack of experience of most SMEs and of course, the fact that they neglect acquiring such knowledge by recruiting experienced international trade employees or consultants.

2 — Poor analysis of the export market

Market analysis is far from being easy. This is even more the case when facing a completely unknown market with cultural and economic differences. A lot of market analysis of the export destination are biased and poorly made, which results in failure and misalignment of the strategy.

3 — Ignorance about the support of government

80% of European SMEs ignore the fact that there are programs supporting their international business development. Most SMEs do not trust export promotion agencies and do not understand their role in international trade. It is only once they fail that they solicit EPAs’ support.

4 — Cost is too high

Cost calculation is a key aspects. A lot of entrepreneurs dream of entering big market in high growth, such as China, Brazil or Russia. They undertake a lot of activities before even taking the time to calculate how much it will cost to enter such markets and before realizing that it is not worth a trial.

5 — Lack of stability in terms of employees

Export market volatility in terms of employment generates difficulty for SMEs to keep their human resources abroad. In addition, dependency on some key employees at home may jeopardize the international situation when they leave the company. Staff stability is a necessity to avoid export failure.

All protocol and advise being observed, you will be one of the most successful exporters.

Good luck with your journey.

Chidiebere Moses Ogbodo

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