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How to be an expert exporter

Article · January 2021

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Suman Kumar Regmi

St. Xavier’s College
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How to be an expert exporter
Suman Kumar Regmi

A business opportunity and sourcing system can be developed to list online

Nepali exporters or firms interested in exporting which should be updated
yearly. Such a system can identify active exporters of exportable products. In
some cases, firms may have little or no experience in exporting products.
These firms will be unable to provide a valid, experience-based response about
which practical export skills are necessary to export or to provide a skill
comparison between the two market groups. Each firm seems to use a
particular set of export skills to manage its exports, although it draws upon its
skills in varying degrees as per the specific export market being served.

Competitive advantage

Among these skills, the ability to identify a firm’s competitive advantage and
define its international objectives is considered to be of equal importance.
Knowing how to work effectively with foreign cultures and being familiar with
international business travel documentation are considered significantly more
important for overseas sales than for sales in neighbouring countries. Of the
skills deemed to be of moderate importance, knowing the neighbouring
countries’ regulations affecting exporters was considered to be equally
important for sales both in neighbouring countries and overseas. However,
very low priority is attached to the use of strategic alliances. Trade and export
promotion insurance and financing, licensing and especially countertrade,
along with relatively high standard deviations, indicate that most businesses
are not involved in these types of activities.

Other general exporting knowledge about free trade areas and customs
unions, the impact of multilateral institutions such as the General Agreement
on Tariffs and Trade (GATT), how exports are classified, and trade rules such
as countervailing and anti-dumping are also viewed as being equally
important. It is significantly more important to know how to use foreign
agents and trading companies to enter overseas markets. Apparently,
businesses in the neighbouring countries are more willing to use international
trade intermediaries for overseas markets.
Knowing how to use strategic alliances, licensing, and countertrade to enter
export markets, as well as familiarity with trade and export promotion, export
credit insurance and export financing programmes, are all significantly more
important for overseas trade. The great importance of the skills needed to get
information to profile potential customers, prepare competitive profiles,
prepare market penetration plans, determine target market regulations, and
get country profile information are equally important for the neighbouring
and overseas markets.

The ability to assess product suitability for export markets and know when
product adaptation is necessary is viewed as being equally important for both
groups of export markets. The high priority accorded to the skills needed to
gather market intelligence and assess product suitability for export markets
can be viewed as evidence of the importance of knowing the market for export
marketing success.

Of the moderately important skills, the ability to ‘quantify additional costs

related to export marketing’ and knowledge of ‘various export pricing options
and approaches’ are viewed as being significantly more important for overseas
sales than for sales in the two neighbouring countries. Getting information
and planning marketing strategies is viewed as being equally important for
both market groups. Interestingly, the importance placed on collecting
information to assess market attractiveness does not extend to interpreting
secondary information on export markets or to do primary market research
which is given low importance. Using the support of the governments of the
neighbouring countries to promote Nepal’s export sales by participating in
government-led trade missions, participating in overseas trade fairs, and
selling to both groups is viewed as being of greater importance for overseas
sales than for sales in the neighbouring countries.

Finance skills

With regard to international finance skills, knowing how to process letters of

credit is viewed as the most important one. Interestingly, this skill had a very
high prioritised deviation in its importance emphasising both neighbouring
countries. The use of letters of credit in both neighbouring countries is much
more selective for Nepal's export market. Perhaps varying by buyer credit risk,
order size and standard industry practice would tend to lead to a letter of
credit terms.

Other important international finance skills include the ability to assess

international credit risk, prepare export-costing sheets, and prepare cash
 budgets for export sales. These mainstream financial skills are viewed as being
equally important for both neighbouring and overseas markets. Interestingly,
all other international finance skills are viewed as being of greater importance
for overseas markets than for the neighbouring countries. Of the remaining
skills, the more general skills of determining the best payment terms for an
export sale, knowing how to speed up international cash flow, being able to
determine foreign exchange risk for exports, and knowing how to process
bank collection orders are viewed as being of moderate importance to achieve
exporting success. So, the post-Covid-19 era needs to create professional
expertise and skills for export promotion to fight the adverse impact of the
pandemic.

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