Here are 10 habits every successful exporter will recognise, plus some handy tips.
- You track exchange rates on a daily basis
Some exporting deals can be negotiated by having your customer pay you in your own currency and some will want to buy in their currency. However you do it you will need to be aware of currency fluctuations as they will affect both you and your international customers. You can track currency rates regularly and convert back to pounds when the price is right. You can also lock in a fixed price in advance from FX providers.
- You are on first-name terms with the top 5 freight forwarders
Many export deals involve shipping to a UK based freight forwarder that specialises in shipping abroad and usually consolidates all of the orders that your customer has made in the UK into one shipment to them. Having good relations with these companies helps to ensure everything runs smoothly, all of the paperwork needed for export is sorted and your customer is kept happy.
- You can accurately estimate a pallet size and weight by eye
Knowing how much your pallets weigh and what their dimensions are is what every freight forwarder wants to know from you, so get used to having this information handy. It’s also important to be aware of safety requirements regarding the heights of pallets and weights of boxes. Some customers may also have special requirements regarding the pallet construction and load capacities.
- You know your ECSL from your EUR-1
You need to record all of your EU sales and their recipients EU VAT numbers to comply with HMRC requirements. Cloud accounting software such as Sage One can help you manage this information. You will also need to submit this information to the authorities on a regular basis, so be sure to cross your ‘t”s and dot your ‘i”s and get your paperwork filled in accurately. Some countries like Switzerland require other paperwork like a EUR-1 when your shipment values exceed a certain amount.
- You use USD instead of $ in your emails
You use terms like USD (US dollars) and GBP (Great British pounds) instead of symbols on your emails so that there is no confusion with pricing.
- You have your UKTI contact on speed dial
UKTI are a government body set up to assist UK companies looking to grow through exporting. They provide useful data and analysis on international markets and how best to approach them. Set up a meeting with your UKTI rep to start growing your export sales.
- You negotiate for ‘ex works’ over ‘free on board’
It is cheaper to agree to deliver ex-works (ie, to your customer’s freight forwarder) instead of ‘free on board’ (ie, on to the boat they are shipping on).
- You get ten calls a day from different FX providers
Once you exhibit at trade shows the foreign exchange providers start to call offering you the best currency deals. As with all suppliers, find three options that you can work with and then cross check them each time when looking to convert foreign currency back into your own currency.
- You use the term MOQ
You will need to have a minimum order quantity in mind for export sales to make the whole process worthwhile for your business. Often distributors in other countries will want discounts so it’s important to have an export price and minimum sales required to meet this price.
- You have pound, euro and dollar bank accounts
If you export a lot and don’t buy your currency forward it can be useful to have different currency accounts to hold money in until you are ready to buy back into pounds. This can also be useful if you purchase supplies abroad as it reduces the number of times you have to switch currencies which saves you money.