Getting started with trading internationally? If you’ve received your first export order, Lesley Batchelor OBE, COO of Open Borders Direct, shares seven areas to consider so you can make the most of the opportunity and grow your business.
1. Did this come from a quotation or from your website?
- If you quoted, do you have terms and conditions on your website that impact on this order? (We can check later whether they are internationalised once you’ve sent this order)
- Has the buyer accepted your offer but sent their own T&Cs? (The last T&Cs to be exchanged are the ones that dictate the contract of sale.)
- Was it the result of an email exchange? If yes, do print the trail and make sure you haven’t committed yourself to anything you cannot do.
- If this is the result of a conversation – it may be as well to confirm your understanding of the commitments, you have both made and share it with your customer to be sure that there are no problems later in the process.
2. Can you fulfil this order on time?
- Make sure that you haven’t over-committed or over promised – check the deadline or due date and be sure you let the buyer know if you can’t stick to it – better now at this stage of the order than disappointment later in the process.
- If you need to do overtime to make this order on time – how does that impact on your costs and breakeven calculations – is it still viable?
3. How are you transporting the goods?
- What have you agreed? Is there an Incoterm®2020 quoted that you can use to understand what your obligations are as the seller and those of your buyer?
- Check order received from the buyer to see if they have stipulated any specific transport routes or carriers that must be used.
- Do you know how large your consignment is?
- Make sure you have a reliable packing list for the goods.
- Are there any special packing arrangements or marking the consignment needs?
- Check with the carrier/freight forwarders amount the cost of the freight and that if you are paying for this or it was included in the quotation that you can still make a profit – if not go back and talk to the buyer
4. What insurance cover do you need?
- Basic in-transit – from a-b in the UK
- Marine or cargo insurance if travelling from a port or airport
- Product liability for when your product is sold in the new market – what would happen if anything were to go wrong?
- Have you offered any advice with this product? You may need to look at professional indemnity insurance.
- You may even want to insure the invoice debt to make your first order secure in payment terms
5. What documents do you need?
- A commercial invoice showing full commercial value
- A packing list (if more than one carton) must be clear on the contents of each carton.
- A shipping note, or transport document evidencing shipping instructions
- Certificate of shipment/Air waybill/Bill of lading
- Do you need to certify the origin of the goods?
- Any food/drink, military dual use/antiquities works of art all need special export licenses or certificates of health or perhaps providence.
6. What are the terms of payment?
- This should be clear at the outset especially if you are dealing with 2nd or 3rd world markets where the banking systems may regulate payment in foreign currencies like sterling or dollars. Sometimes, if the country you’re dealing with has a non-convertible currency you may have to wait for your buyer to get clearance from their government through their bank.
- Remember there is a cost of collecting money, cheques are relatively cheap here in the UK but can cost more internationally – so check that this is not going to impact on the margin you hope to make from this sale.
7. What’s involved with payment and shipping?
- If you haven’t charged VAT but made sure you have the VAT (or equivalent local tax) registration number and checked that it exists, they make sure that you have evidence that the goods have left the country for HMRC audit purposes. Check out IOSS Import One Stop Shop
- Certificate of shipments need to satisfy the customer if any issues should arise so check what they consider acceptable for this first order.
- Make sure you have complied will all the customers required paperwork, they may need additional papers to get things through their customs or local banking regulations.
- Take the money to the bank or enjoy reading your bank statement with this new customer sales revenue in place!
More questions?
Open Borders Direct has been specifically designed for SMEs to help de-risk imports or exports and provide a One-Stop-Shop which navigates you through the risks and sets you ready to optimise profits in existing, or new, global markets.
Our ‘Ask an Expert’ facility is the most used, and valued, part of the OBD® Platform. In this area you can ask anything ranging from ‘what paperwork do I need to produce for a specific country?’, to ‘we use egg whites in our icing, what sort of statements and evidence do I need to support it being sold into France?’. No question is too small. Open Borders Direct cover all markets and all sectors.
Open Borders Direct are offering FSB members a 3 month free subscription to their platform offering guidance, support and resources for small businesses trading internationally. Visit the Open Borders Direct website to find out more and claim your free trial.
About the author
Lesley Batchelor OBE is a champion of UK exporters, with a powerful track record in enhancing the international performance of hundreds of businesses. Known as a force of nature within the industry she has changed many businesses fortunes in terms of exporting and helped to promote the need for to professionalise the approach we take to trading globally.
From a blue-chip background, she worked as director general of the Institute of Export (IOE) for 12 years promoting professionalism and the need for qualifications and support for businesses. Past Co-Chair of the Bribery Act 2010 Scrutiny DFID expert panel now FCDO; advising on APPG Advisory Panels on Trade & Investment and Manufacturing and Select Committees supporting SMEs. ICC/WTO MSME trade negotiation. WTO Alliance & Trade & Investment Committee.
Using this wealth of experience to co-found the Open Borders Direct platform with insurance guru, Mark Heath, to help SMEs navigate and manage the inevitable risks they face when trading internationally, importing or exporting. She also acts as a board advisor to Smart & Savvy Women Ltd and to the African Council of Small Businesses and Entrepreneurs. With invaluable expertise in intellectual property, global licensing and marketing Lesley has been awarded CBI Real Business First Woman in Business Services and CEO of the year from Trade Association Congress in 2015.
Lesley is often sought out for comment on Brexit and international trade issues writing thought leadership pieces for many journals, TV and radio stations.