I want to start exporting my product into Africa. I’ve made contact with some buyers in Nigeria and they’re interested in signing a contract. How do I make sure that my product is ready for export?
Whether or not your product is export ready depends on the buyer’s needs, your product’s ability to meet those needs, and how your product will shape up against international competition.
In order to determine export readiness, you need to research the following:
- Your target market
- Any potential competitors
- The buyers themselves.
Common factors that would affect the exportability of a product include:
Unless there is a market for it, your product won’t sell. Look at your domestic market for an indication. If you are meeting a need locally, you should be able to meet the same need internationally.
This, however, is not the only consideration. International markets are usually further away, meaning that you will have to add transport costs, and will most probably have to include the cost of import duties and taxes in the final delivery price.
2. Product adaptability
A key quality of an export product is its ability to adapt to suit an international market. Cultural differences between countries could affect the use or acceptability of a product in each country. A product name could have a totally different and possibly derogatory meaning in another language and might have to be changed for that market.
3. Cost structure
The cost structure of the product will obviously impact on its competitiveness. For example, depending on the cost of materials, and whether or not those materials can be locally sourced, international transport costs and customs duties in the importing country will collectively determine the final delivery price.
The more you know about your competitor’s product, the better your position when determining your own chances of succeeding. Price is an important factor in determining success, but not the only way to compete. You can also differentiate your product by highlighting some of its unique selling points.
5. Product complexity
The greater the complexity of your product, the more important the strength of your business. Products that need a high level of support or installation assistance will need a strong local network with trained staff to support them. The investment in setting up a sales and support structure in the importing country could be prohibitive, making it unviable to export the product.
For more information, read more here.