In a world of ever-growing international trade, you have probably considered spending more time increasing your export sales. You were right.
International sales are a formidable tool for growing revenues and profits as long as they're planned carefully and strategically.
To prove that, we've gathered in this article the intel and data on the results and advantages of an international sales strategy executed correctly. We'll also outline the obstacles to overcome.
Understanding International Sales Advantages and Its Challenges
International sales can offer numerous advantages for businesses, such as access to new markets and increased revenue and profits.
However, expanding to foreign markets also comes with its own set of challenges. International sales involve navigating the complexities of many aspects, such as export procedures, legal frameworks, language, and culture.
Let's take a closer look at the nature, advantages, and challenges of international sales to help you make informed decisions for your business.
Unveiling the Essence of International Sales and Marketing
International trade has been on the rise for a considerable period of time, with the most significant increases in the past two hundred years. Can you imagine that exports today are more than 40 times larger than in 1913?!
Sales and marketing are the heart of expanding your business internationally. International sales and expansion are becoming increasingly mandatory if you want your company to grow.
It involves:
- Understanding global markets.
- Identifying opportunities
- Setting up a sound strategy.
- Effectively communicating your brand's value proposition across different cultures.
Success in this area leads to significant growth and expansion.
The Main Advantages of International Sales and Export Growth
International sales and expansion can be a real driver for companies. It represents a tremendous opportunity for higher revenues and profits. Not only that, it will also improve your business in many other aspects. Here are some key benefits we see in our seasoned clients exporting:
- Higher revenues.
- Higher profits.
- Resilience and fewer risks: by accessing new markets, you're not tied to your country's economy.
- Increased production: Your employees can work more, or you can grow your headcount, and the profitability of your machines and R&D will be higher.
- Brand recognition.
- Learning and development.
- Access to better resources (HR) and raw materials.
- More networking and partnerships with organizations and other companies: opportunities for collaboration, joint ventures, and other forms of cooperation.
- Access to government support.
- Extended product life cycles.
- Offer better opportunities for career advancement to your employees.
Small businesses that want to expand into new markets through exporting can benefit from various government support and incentives.
Governments can support in many ways:
- Trade missions booths and financing.
- Export financing.
- Export consulting and tax breaks.
These measures can help to mitigate the risks associated with exporting and simplify the process of entering new markets, ultimately promoting the growth and success of small businesses.
What Do Export Sales Translate into in Terms of Results?
Through an extended research of the most recent studies on the topics, we found the following figures on the results of exporting companies.
- Companies that export are 17 percent more profitable than those that don't. U.S. International Trade Administration
- Among U.S. exporters, 60% of small companies in the survey derived 20% of annual earnings from exports. 44% of mid-size companies did. U.S. International Trade Administration
- Among the same U.S. exporters, +70% believed their export revenues would grow at least 5 percent yearly for the next 3 years. U.S. International Trade Administration
- More than 30% of UK businesses with +50 employees export, and more than 40% of UK businesses above 250 employees export. The UK businesses that declare international trade in goods are around 70% more productive on average than non-traders. 2021 UK Annual Business Survey exporters and importers and other studies, Office for National Statistics
- Exporting UK SMEs reported 15.2% annual growth in the last five years, compared to 8.4% for pure domestic players (1000 companies surveyed pre-pandemic). Half of the same exporting firms said exporting had boosted profits by up to, or even more than, 20%. Research by Capital Economics for UK Export Finance (UKEF), the UK's export credit agency.
- According to recent studies, a vast majority of companies, precisely 85%, have reported that venturing into exports has resulted in levels of growth that would not have been achievable otherwise. UK Dept. of Business and Trade
- According to a recent survey, a majority of 66% of entrepreneurs stated that expanding their business overseas helped them generate novel ideas and foster innovation. ICAEW
- According to a 2024 French mid-size companies (250 to 4999 employees) survey, 86% of mid-size French companies export, while only 10% of small companies. Half of mid-size companies make half of their revenues abroad, and 9/10 have at least one office abroad. “Baromètre des dynamiques internationales des ETI”.
Navigating Obstacles in International Sales
Pre-Requisites to Enter New Markets
Before considering entering new markets, you always need to ensure you have the resources available to do so. Finding new foreign clients and international partners isn't a walk in the park.
If you want to pursue new export opportunities, that means having the following resources available:
- human resources (salespersons, export team, logistics, invoicing)
- time
- money (business trips, exhibition attendance...)
It won't benefit you to do half of the work or to botch your approach to new markets. If you do something, do it well. If you select a new country to enter, make a proper market entry. Less is more.
Having Export Sales Aspects Under Control
You'll need to gain experience and knowledge in many aspects to find new international clients and start exporting.
To us, the checklist of topics to work on is:
- An international business strategy, to know which countries are a priority to you.
- Mastering sales, marketing, and intercultural communication in a global context.
- A market study on the local market and customers' needs.
- Understanding exporting methods (logistics) and international payments.
- Knowing your sales channel development (who you'll sell to in this country and whether it is the right sales channel in this particular country).
- Proper digital marketing and brochures in foreign languages.
Legal and Ethical Standards in Global Markets
To succeed internationally, companies must understand their target markets' legal and ethical expectations. This involves a thorough understanding of the local laws and regulations and the cultural norms and values that guide ethical behavior in the target markets. Upholding integrity across borders is key.
Failure to adhere to these expectations can lead to legal and reputational risks, resulting in financial losses and company brand damage.
Conclusion
In conclusion, international sales and expansion can significantly benefit businesses with higher revenues, increased profits, access to new markets, and more.
However, it also comes with challenges, including navigating legal frameworks, language, culture, and export procedures.
By understanding international sales' nature, advantages, and challenges, businesses can make informed decisions and set up sound strategies for successful growth and expansion.
With government support and incentives, small businesses can mitigate the risks associated with exporting and simplify the process of entering new markets.
Overall, international sales and export growth can be a real driver for companies looking to expand their business, improve their brand recognition, and offer better opportunities for career advancement to their employees.
Masson International supports international companies entering the Swiss, French, and Belgian markets. We provide services to help gain market shares in these 3 countries.
