A: Many exporters fail because they are unable to deliver their products in a timely and reliable manner. We recommend that you consider the following factors before selecting your freight forwarder:

• Location and operating hours of their local office. Visit their office often. If they are located nearby, you will save on communication and travel expenses. Make certain that they will be accessible evenings and weekends in case of emergencies.

• Location of branch offices. This will be especially important if you have to locate an export shipment quickly. If they have worldwide branches and affiliates, they will be able to trace your misrouted or delayed shipments from both ends of the transaction without involving third parties.

• Make sure they are a full-service forwarder. Can they handle ocean shipments, air shipments and container consolidation to reduce transport costs? Could they handle importing? Check their references to make certain they can process your shipping documents correctly and efficiently.

• ·A directory of North Carolina freight forwarders can be found at:  http://www.forwarders.com/StateDirectory/NC.html

(Source: The Export Institute USA, Ask the Experts, Category Six.)

A: A freight forwarder will make arrangements for and expedite shipments to overseas destinations. Your freight forwarder should perform these services on your behalf:

• Act as your agent per your power of attorney to transport your products to the foreign port of import and, if requested by you, directly to the importer’s location in the foreign market.
• Prepare and examine shipping documents for accuracy, completeness and compliance with the legal requirements of importing countries.
• Distribute international shipping documents and, if requested by you, submit them directly to your bank for collection and deposit to your account.
• Act as your "Customhouse Broker" per your power of attorney and arrange for clearance of your import shipments through the designated port of entry.

(Source: The Export Institute USA, Ask the Experts, Category Six.)

A: The final customer in the foreign market ultimately pays legal and banking fees. However, they are usually handled differently in the invoicing process.

(1) Legal fees are estimated in advance by the exporter and are included in the purchase price. They may include legal counsel to:

• Review contracts
• Ensure compliance with export licensing requirements
• Protect the exporter against violation of intellectual property rights.

Legal fees are paid by the seller and the buyer does not know the estimated amount for these fees.

(2) Banking fees are usually known in advance of the sale and are added to the price quotation/proforma invoice to the buyer as a separate item. They are usually for processing of shipping and financial documents.

Banks act as financial intermediaries between the buyer and seller in export transactions. The buyer knows the amount of the banking fees prior to placing the order.

(Source: The Export Institute USA, Ask the Experts, Category Five.)

A: The following are resources for export financing:

• Export financial assistance of less than $750,000 is available from the Small Business Administration (SBA), including working capital guaranty programs, and direct loans. SBA has numerous state and local offices. For a SBA office in your area refer to website or call a TIC trade specialist (see FAQ: What is the Trade Information Center (TIF)? NEED LINK).
  
  
• The Export-Import Bank of the United States (Ex-Im Bank), dealing with transactions greater than $750,000, has programs which provide trade finance and assistance including insurance, working capital guaranty programs, and direct loans to foreign buyers. For more information on Ex-Im Bank Programs, call their export finance hotline at (800) 565-EXIM (3946).
  
  
• The Bankers Association for Finance and Trade (BAFT), a non-profit association of approximately 150 banks, matches exporters in need of trade financing with interested banks. BAFT can be contacted at (202)  663-7575.

A: Unless you have the expertise of an international currency trader, your primary objective as an exporter should be to sell your products in foreign markets at a predetermined profit margin. The easiest way for you to do that would be to require payment in dollars.

However, if this is not possible, we recommend that you "hedge" your profit margin against the devaluation of your customer’s currency. Establish a foreign currency account at your bank and arrange for a foreign exchange credit line. Your bank will then agree to purchase most of the foreign currencies that you receive from export sales at a fixed rate in dollars against future deliveries.

You can use hedging in export transactions involving letters of credit, documents against payment, consignment of goods, and open account. Hedging is also advantageous to importers because they can guarantee a firm purchase price in local currency when they sign the order.

(Source: The Export Institute USA, Ask the Experts, Category Eleven.)

A: It will almost always be more effective if you advertise and promote your products in the language of the export market. If translators are not familiar with the current idioms and word usage in the export market, words and phrases with multiple meanings could seriously damage the image of your company and products.

It may be cheaper and less risky to have your advertising and promotional materials translated by locals within the export market. If you are using a foreign trade representative, you may ask if he/she would arrange for and supervise the translation.

Specify who will pay for these services, and whether the final translated materials must be submitted to you in advance for approval. Advance approval of translated materials can be impractical because of the delay, the need to react quickly to local marketing conditions, and the lack of language expertise within your organization.

(Source: The Export Institute USA, Ask the Experts, Category Twelve.)

A: Contact the U.S. Council for International Business  in New York City and apply for an ATA Carnet. Assuming the countries you will be visiting are also members of the ATA Carnet System you will receive an ATA Carnet that will allow you to bring commercial samples into these countries without paying import duties or taxes.

Carnets are “Merchandise Passports.” They are international customs documents that simplify customs procedures for the temporary importation of various types of goods.  In the U.S., two types are issued: ATA and TECRO/AIT Carnets.

ATA Carnets ease the temporary importation of commercial samples (CS), professional equipment (PE), and goods for exhibitions and fairs (EF).  They facilitate international business by avoiding extensive customs procedures, eliminating payment of duties and value-added taxes (minimum 20% in Europe, 27% in China), and replacing the purchase of temporary import bonds. 

TECRO/AIT Carnets, used between the U.S. and Taiwan only, appear similar to, and serve the same function as the ATA Carnet. TECRO/AIT Carnets result from a bilateral agreement between the US and Taiwan, covering only commercial samples (CS), and professional equipment (PE).  Merchandise entering countries in addition to Taiwan may also be accompanied by an ATA Carnet.

Benefits of Carnets

Carnets save time, effort, and money.  They: 

• May be used for unlimited exits from and entries into the U.S. and foreign countries (Carnets are valid for one year),
• Are accepted in over 75 countries and territories,
• Eliminate value-added taxes (VAT), duties, and the posting of security normally required at the time of importation,
• Simplify customs procedures. Carnets allow a temporary exporter to use a single document for all customs transactions, make arrangements in advance, and at a predetermined cost,
• Facilitate reentry into the U.S. by eliminating the need to register the goods with U.S. Customs at the time of departure.

(Be aware that Carnets do not exempt holders from obtaining necessary licenses or permits.)

Merchandise Covered by Carnets

Virtually all goods, including commercial samples, professional equipment, and items for tradeshows and exhibitions, including display booths.

Ordinary goods such as computers, tools, cameras and video equipment, industrial machinery, automobiles, gems and jewelry, and wearing apparel.

Extraordinary items, for example, Van Gogh Self-portrait, Ringling Brothers tigers, Cessna jets, Paul McCartney's band instruments, WorldCup class yachts, satellites, human skulls, and the New York Philharmonic.

Carnets DO NOT cover: consumable or disposable goods (e.g., food and agriculture products) giveaways, or postal traffic.

To secure an ATA Carnet, you will be required to pay an issuing fee and a refundable security deposit. Basic processing fees are determined by the value of a shipment.  Fees range from $200-$330 and the normal processing time is two working days, if the application and security deposit are received by 4:00p.m. ET. As the National Guaranteeing Association, USCIB is required to take security, usually 40% of shipment value, to cover any customs claim that might result from a misused Carnet.

United States Council for International Business
1212 Avenue of the Americas
New York N.Y. 10036

Tel: (212) 354-4480
Fax: (212) 944- 0012
Websites
General: http://www.uscib.org/
ATA:http://www.merchandisepassport.org/

(Sources: The Export Institute USA, Ask the Experts, Category Twelve and http://www.merchandisepassport.org/)

A: Advertising for international sales representatives at trade shows is done often and it can be very successful. It depends upon the type of trade show and where it takes place. Foreign agents and distributors attend major international trade shows on a regular basis looking for products they can sell profitably in their domestic markets.

Here are some recommended steps to help you advertise:

• Place a tastefully-colored sign in a prominent place inside your display area stating "Export Sales Representatives Needed".

• Be prepared to explain the types of representatives you are seeking, the support you will provide to them, and the services they will be expected to provide to customers on your behalf.

• Avoid going into too much detail at the booth. There are distractions that can make it difficult to concentrate.

• Make appointments to meet before and after normal trade show hours. Keep your evenings and early morning hours open to accommodate meetings at the convenience of potential representatives.

• Bring a blank copy of your standard representation agreement so you can discuss its terms and conditions in detail. Interested representatives can then take the sample agreement with them to discuss within their organizations.

(Source: The Export Institute USA, Ask the Experts, Category Three.)

A: There are four basic types of export sales representatives:

• Commissioned Export Sales Agents (often referred to as export brokers)
• Export Management Companies (EMCs)
• Export Trading Companies (ETCs)
• Full Stocking Distributors.

Before you decide which types of export sales representatives you will use, we suggest that you ask yourself the following five questions:

(1) Through what channels are similar products being sold in your export markets?

(2) How much capital do you have and what financial risks are you willing to assume?

(3) What degree of control do you want to retain over the marketing of your products?

(4) When do you want your representatives to take title and physical possession of your products?

(5) When, how and from whom do you want to receive payment for your export sales?

How to select an export sales representative is too broad a topic to cover here. There are countless resources available that outline the basic characteristics of the various types of export sales representatives. The 2007 Export Sales & Marketing Manual, published by the Export Institute and offered for sale on its website, provides a thorough study of the advantages, disadvantages and client services provided by each type of export sales representative in Chapter III, LOCATING POTENTIAL EXPORT SALES REPRESENTATIVES

(Source: The Export Institute USA, Ask the Experts, Category Three.)

A: The answer depends upon the laws of the country in which the cancellation takes place. In many countries, a representation contract can be terminated relatively easily. However, in other countries, it can be very costly and time-consuming to sever a business relationship with an agent or distributor.

You could be required by local law to compensate the representative for a portion of the original investment, promotional money spent in advance to secure future sales, and the projected income they would have earned during the remaining period of the contract.

Because business customs and laws vary in different countries, it is important you present your representation contracts to an international attorney who is knowledgeable of the laws and regulations of the country in which you will be selling your products. While doing so will be more expensive in the initial stages, it is a sound business investment which could save money fighting litigation in foreign courts.

(Source: The Export Institute USA, Ask the Experts, Category Three.)