Eight tips for successfully exporting into the U.S. market



exporting-into-the-U.S.If you’re looking for a good place to break into exporting, the United States can be an excellent choice.

With a population of over 300 million people and a 20 percent share of the global economy, it’s the richest market on earth, and it’s right on Canada’s doorstep. But the United States can also be a tough market—it’s intensely competitive, fast-paced and unforgiving, and an exporter who dives into it without careful planning will usually flounder, if not sink.

Conversely, a well-prepared Canadian company that has a good product and positions it carefully can do very well south of the border.

So how do you improve the odds of being one of those successes? If you keep these eight tips in mind, you’ll be off to a good start:

1. Get a handle on U.S. regional markets.

The U.S. market is actually a mosaic of many regional markets, each with its own economic characteristics and key industrial and service sectors. Depending on your product, some regions may offer you more opportunities than others, so market research is essential. You can start with the Canadian Embassy’s State Trade Fact sheets and the United States section of the Canadian Trade Commissioner Service’s web site for a regional overview of the country.

2. Get your product and marketing right.

Although the Canadian and U.S. business and consumer environments are similar in many ways, you may still need to modify your product, its packaging and/or your sales approach to match the expectations of potential U.S. customers. Keep those regional differences in mind, too—what works well in New England may not fly in the South.

3. Be sure your company is ready to export.

Take a close look at your company to see if you’ll need to boost your financial, managerial and production capacity to meet the demands of foreign trade. You’ll also need a detailed export plan that sets out your U.S. goals and how you’ll achieve them. The Exporting section of the Canada Business website can help you assess your export readiness.

4. Get advice from professionals.

The U.S. business and legal environment is extremely complex and varies from state to state. At the international level, the customs rules and regulations that govern U.S.–Canadian exports and imports are complicated and can be hard to follow. This means that obtaining professional advice about taxes, laws and compliance should always be part of your export planning and operations. For a general overview of compliance, you can refer to EDC’s online guide, Compliance in International Trade.

5. Pay a visit to the U.S. market where you want to do business.

But before you go, contact the Canadian Trade Commissioner Service for that region.

Trade Commissioners can provide you with information about market prospects and local companies, and can help you out with face-to-face briefings, contact searches and introductions.

6. Pick the right entry method.

There are several ways to enter the U.S. market. Direct selling—that is, traditional exporting—is the simplest method and works well for many Canadian companies. Depending on your business needs, though, you could opt for a representative or branch office in the country, or establish a U.S. subsidiary there. Setting up a joint venture with a U.S. firm, or acquiring an existing U.S. business, are other possibilities.

7. Get your financing in order.

Most companies work with their banks to get working capital for their domestic operations. But it can be harder to obtain financing for foreign deals because the risks are higher. Export Development Canada (EDC) can often help in these situations by providing various kinds of financing support, such as export guarantees.

8. Protect your bottom line.

The risk of non-payment is always higher in foreign trade than it is domestically. Also, your U.S. customers will normally expect open-account payment terms, which for you is the riskiest payment method. For protection, many Canadian exporters use EDC’s Accounts Receivable Insurance or Single Buyer Insurance, which can cover up to 90 percent of losses resulting from customer non-payment.

Sweet success

Ottawa-based HoneyBar Products International produces healthy snack bars that contain only nuts, seeds, dried fruit and honey. Until 1995, the company made its bars by hand and marketed them only locally. Now, though, it sells them by the millions through grocery stores across the United States and Canada, including retail giants Walmart and Safeway. The company uses EDC insurance to eliminate one of the big risks of selling across the border—non-payment by a foreign buyer.

Want to learn more about exporting into the U.S.? Download EDC’s Doing Business in the United States and watch a video with me and Dominique Bergevin.

 Disclaimer: The opinions expressed in this article are those of the contributing author, and do not necessarily reflect those of the Forum for International Trade Training.

About the author

Author: Mélanie Carter

Knowledge Partnerships Lead, Export Development Canada

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