The Pros and Cons of Exporting February 9, 2012Posted by SBDC in Small Business General.
Exporting can really boost the bottom line for a small business. It can generate extra revenues which may not have been possible in the domestic market and opens up all sorts of possibilities and opportunities. That’s when it runs smoothly. Exporting can have its downside too and can leave your business exposed to risks over which you have little, if any, control. So before committing your business to exporting your product, you must be aware of the benefits as well as the disadvantages.
Economies of scale
Exporting will mean that you will have to buy larger amounts of products or raw materials from your suppliers. This should boost your negotiating position and enable you to get better deals. You may qualify for discounts or buy at a cheaper price per unit or you may be able to negotiate longer credit terms meaning that you can keep potential borrowing to a minimum.
Access to new customers
Customer acquisition can be an expensive business, particularly when you are trading in a crowded market. A new foreign market can mean a new and fresh customer base to which you can sell.