Guide

What to consider before exporting

Last updated: 28 August 2017

Selling and distributing overseas

There are many ways to get your products into your target market or markets. When deciding how to export your goods or services overseas, you need to think about which distribution methods to use.

Research and consider all the options to find what's best for your business.

There are 3 main types of export distribution:

Direct selling and e-commerce

Online sales are a relatively low-cost way of entering new markets and finding new customers.

There are two main ways to sell online: through your own website or through e-marketplaces.

When customers shop online, they'll want to trust your brand and your product before buying your products or services. Customer testimonials, monitoring review websites and social media are all ways to build trust.

Your own website

Having an online presence is a key way of selling to your customers directly. Having your own e-commerce platform on your site can help you sell your product across the world.

If you're selling services, you could use your website as your 'shop window' to generate business leads

When developing and maintaining your website:

  • look at your website analytics to understand where site visitors are coming from geographically
  • identify and research your key international target markets (customers and competitors)
  • think local – what you need to do to appeal to international customers in terms of the products or services you offer and how you describe them
  • depending on your target markets, consider translating your content, pricing your goods or services in local currencies and offering different methods of payment

The Open to Export website has advice on selling online internationally via websites and e-commerce and choosing your e-commerce platform.

You can also read the 'E-commerce and selling online: the basics' guide on Business Gateway.

E-marketplaces

There are other ways to sell products and services overseas – for example, selling through international e-marketplaces.

An e-marketplace is an online platform that allows businesses to trade through e-commerce.

There are a wide variety of e-marketplaces, including Amazon, eBay, Alibaba and more.

UKTI has gathered information on over 400 e-marketplaces. Their E-Exporting Programme can help you set up on e-marketplaces and other online channels and get expert advice from a Digital Trade Adviser.

Selling through intermediaries

You may want to work with someone who is already familiar with the market to help you sell your goods or services.

When arranging a contract with a distributor or sales agent, you should clearly define:

  • which arrangement is being used
  • who has responsibility for delivery and payment

Your contract should be written using 'Incoterms' (standard international trading terms that define what you and your supplier are responsible for).

Distributors

If you choose a distributor, they'll buy the goods or services from you then sell them to their customers. They'll add a margin to cover their costs and make sure they make a profit.

With distributors, they have the contract with the customer – not you.

Sales agents

You can hire a sales agent who will work on your behalf to:

  • sell products
  • conclude contracts with customers
  • make connections with new customers

With sales agents, you still have the contract with the customer.

Visit the Open to Export website to find out more about the differences between an agent and a distributor.

Working with stockists and retailers

You may want to sell your products through retailers in your chosen market or markets.

Research local retailers and think about which retailers would most suit your brand. You may want to target large department stores or supermarkets, or focus on smaller, more specialised stockists.

Find out more about what to consider when choosing to sell internationally through retailers and stockists.

Setting up a local office and/or a local warehouse

You could also choose to set up a local office and/or a local warehouse – it can be expensive to set up and run but it will let you keep greater control of your business.

A local office or warehouse could also give you a competitive edge in your target market.

This is an option you might want to consider after you've been doing business successfully in the market for 2 or 3 years. If you do this, you'll need to consider:

  • local management and staffing
  • employment regulations
  • whether to rent or buy property
  • tax implications
  • other financial and accounting issues

Exporting goods versus exporting services

Some rules are the same for exporting goods and exporting services, but there are important differences.

Exporting goods

If you're exporting goods, you'll need to think about how to transport your goods overseas.

You can use a 'freight forwarder' to help you ship goods overseas.

Freight forwarding is a service industry that transports goods across the world on behalf of importers and exporters. They can organise the documentation for exporting your goods as well as physically moving them.

You should also find out what procedures to follow around:

  • tax (including VAT)
  • export or import duties
  • customs checks
  • packaging and labelling
  • commodity codes – if these apply
  • any other documentation, like insurance

Exporting services

Some of the basic rules of exporting services (like financial services or 'software as a service') are the same as exporting physical goods, but there are important differences.

'Software as a service' is where a subscription is paid to use software applications. These applications are usually accessed over the internet through a web browser.

Key differences can include:

  • contracts – you can't use 'Incoterms'
  • legal, regulatory and tax – depending on whether you offer your services from within the UK or if you provide your service by visiting your customer's country
  • protecting your intellectual property
  • how you market and distribute your service
What to consider before exporting
Selling and distributing overseas