How to Export Commercial Goods to New International Markets

Are you looking to grow your business? Exporting your products is a great way to reach new markets and scale up. Ensure you’re prepared to take this next step by checking out these steps for exporting commercial goods.

How to Export Commercial Goods

To begin exporting goods from Canada, you need to add an import/export number to your business number. You may also be required to obtain permits or follow specific government regulations to export certain products. Take a look through the reporting requirements for exporters from the Canada Border Services Agency.

Export Planning

Like your domestic business, your export business requires a comprehensive plan to help you identify the next steps. A business plan will help you understand the legal requirements for getting your product into a new market, identify the costs associated with exporting, and develop a strategy. 

Explore this Step-by-Step Guide to Exporting. Along with plan templates, this guide allows you to:

  • Assess your company’s readiness
  • Build an export plan
  • Research and select your target market
  • Create a marketing plan
  • Determine the best methods of delivering your product or service to your target market
  • Develop a financial plan
  • Understand the key legal aspects of international trade

Find Your Markets

Market research is an essential step in understanding how to export commercial goods. With close to 200 countries to export to, you want to ensure you’re targeting the right ones. This research will also show you who your competitors are and the trends for your product in that market. 

Google Trends is a great, free way to do market research for your exporting venture.

Screen Potential Markets

  1. Obtain export statistics – Search the Statistics Canada website to see where Canadian exports go.
  2. Identify potential markets – Of the countries you’ve identified, which hold the most potential? Are their markets growing? Remember to look at the large markets and the smaller secondary markets with fewer competitors.
  3. Target the most promising ones – Of these markets, choose three to five that you feel are most promising and begin further research.

Assess Your Target Markets

  1. Examine product trends – Look for information on your product and competing ones. The Canadian government has free market research reports for various countries in different sectors. You could also look at Canadian industry associations related to your business, which may also have research reports available.
  2. Research the competition – You must know who your competitors are, both foreign and domestic. Google is a great resource, as are the reports linked above.
  3. Analyze the market – Research any factors that may affect the marketing or use of your product. For example, does your product name have a different meaning in local languages? Or, do you need to change sizing to suit the local market?
  4. Identify barriers – You need to know if there are any export or import barriers. The most common export barriers are controls on certain products. These barriers could include significant import duties or regulations. To see if there are any restrictions on yours, check with the government’s Export and Import Controls division and the foreign country’s customs agency.
  5. Choose a market – Once you’ve conducted market research, determine which market is most suitable. For a small business just starting to export, we recommend you target two targets at a time, at most.

Price it Right

When exporting commercial goods, considering your prices is vital. There are various methods for you to determine the pricing of your product. The most common include:

1. Cost-based – This method allows you to calculate all the costs associated with manufacturing and exporting your product. It will enable you to determine if exporting is a financially viable option for your company. Some essential costs to consider are:

  • Fees for market research
  • Production costs
  • Export documentation
  • Freight and insurance
  • Import duties
  • Wholesaler, importer, distributor, and retailer mark-up
  • Travel expenses
  • Translation costs
  • Product adaptation costs
  • Commissions or other costs associated with foreign representatives

2. Market demand – Here, you’ll research the market to find out what consumers are willing and able to pay. If you determine that your current selling price is too high for the new export market, there might be ways for you to modify your product to reduce its cost.

3. Competitor pricing – If many competitors are in the new market, you might be forced to match their pricing to compete effectively.

Find Qualified Buyers

Once you’ve identified the markets you want to target, you’ll need to find buyers for your product. Here are some strategies you might want to consider:

  • Search online – Use Google, Kompass, or Alibaba.
  • Attend trade shows 
  • Contact industry associations – When researching your targeted export market, look for any relevant industry associations, as they’ll often publish a list of their member companies or be able to provide one.
  • Use the Trade Commissioner Service – With offices in Canada and internationally, this service is for companies that are export-ready and have a commercialized product.

Payment Terms

It’s vital to clarify with your buyer the terms of sale that outline the obligations, risks, and costs of the buyer and seller. Incoterms are the most commonly agreed-upon terms of sale in international business.

Methods of Payment

You want to ensure you get paid in full and on time, which depends on how trustworthy your buyer is. The primary methods of payment, in order of least to most risky for the exporter, are:

  • Cash in advance – Your company receives the payment for goods, usually by wire transfer, cheque, or credit card, before the shipment. Once you’ve received the money, you arrange to ship the product to the buyer. 
  • Documentary Letters of Credit (LCs) – These are usually a good compromise for the buyer and seller, as they’re the most common payment method in international business. LCs rely on banks to receive and check shipping documents and guarantee payment. 
  • Open account – If the buyer is well-established, trustworthy, and thoroughly checked for creditworthiness, you might consider billing them and getting paid later.

Take Care of Logistics

Once you’ve made a sale, you must ship your product to your international customer. Due to the complexity of moving products out of the country, exporters often get assistance from freight forwarders. These companies arrange the shipment of goods from one country to another.

Export Documentation

The Canada Border Services Agency (CBSA), the customs agency in the foreign country you’re exporting to, and the buyers might all require you to complete documentation to comply with import regulations. 

If you’re exporting for the first time, we recommend that you work closely with your freight forwarder to make sure your documentation is in order.

Learn More

Looking for more information about how to export commercial goods? Get in touch with our Export Navigator team. They offer free e-courses, seminars, and advisory services to help get you started on the right track.

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