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WG774
21st Apr 2005, 22:07
Hello to all.

I realise this is probably not the place to raise such issues (if you think it isn’t maybe you could provide a link to the right place?), but after months of developing my widget, and selling it via a few retailers in the UK, I’m now getting emails from overseas distributors asking for prices / MOQs etc.

Although I come from a family of engineers and business people, I don’t know anyone to get advice from as manufacturers are a bit of a rarity in the UK these days... The bank doesn’t seem to have a lot of advice, although they’ve had no problems passing my number onto their “sister concerns” such as factors.

My query revolves around the “right” way to export. Dealing with retailers in the UK has given me a grip on how to handle shops etc, but I’m slightly intimidated at the prospect of overseas firms wanting credit etc.

Apart from “winging it” and playing things as they come (which could be costly if errors are made) I’m not sure what provision to make for the export market. Should one make them pay upfront always, and then despatch the goods?

In short, I’m a one-horse outfit looking for a few tips - any advice would be gratefully received.

Before you tell me this isn’t aviation-related, bear in mind that profits will be put into the field of recreational aviation ;)

Jerricho
21st Apr 2005, 22:15
I exported myself....... ;)

Onan the Clumsy
21st Apr 2005, 22:20
Yes, but look at the overheads. The MIL came with you.

Solid Rust Twotter
21st Apr 2005, 22:21
If you're sending them anywhere near Africa, definitely money up front.


All of it, including freight and handling, plus a contingency. Better yet, let the buyer sort out the transport and taxation.

Howard Hughes
21st Apr 2005, 22:50
If you're sending them anywhere near Africa, definitely money up front.

Or Indonesia or South America.....The list goes on!

Cheers, HH.

:ok:

Kiting for Boys
21st Apr 2005, 23:59
If in England contact Business Link, locally.

But better to contact Scottish Trade International and lie about considering relocation north.

They have some serious experts and people in overseas markets.

In any case look out some of the DTI how-to guides. They are on the Interweb.

The Embassies often have good people (there is a great PR scheme where they write articles for you in local language).

Best initial advice is go small, find a market where you speak the language, find a trusted local seller.

Be clear about the ownership of goods etc

A Distribuor buys from you and then has the credit risk (but will want extended credit etc).
An Agent sells on your behalf and expects 15% to 35% of the sales price. Make sure that the deal is not On Invoice but when you get the dosh.

Or use the Internet and Credit Cards

Good Luck

Main_Tenant
22nd Apr 2005, 01:41
Might be a case for Letters of Credit (http://www.crfonline.org/orc/cro/cro-9-1.html).

Loose rivets
22nd Apr 2005, 07:37
Tell us a little about the item, is it hi tech / heavy / costly to ship?

My pal made Traps for clay shooting at home in Essex. They had to be made here cos of the sheer cost of the carriage. It ended with some guy here not really making any headway with what was a RR of a product. He just could not measure up to my pal's quality.

send me a message direct if you feel that it might go outside the pprune guidelines.

WG774
22nd Apr 2005, 13:34
Many thanks for the comments, I'm thumbing through the links / suggestions as I write this.

I appreciate that the nature of the query was possibly outside Pprune guidelines, but wasn't sure where the hell else to ask for advice as everyone I ask seems to have an agenda of sorts.

It is apparent that there is no "magic bullet" for this one. I guess it's a case of building an infrastructure that is suited to your industry / type of product.

Out of interest, a pack of widgets is 1.2KG, and I think a sensible MOQ is 12 packs. It's mechanical btw, so no need for intensive tech-support.

Thanks again.

Capt.KAOS
22nd Apr 2005, 14:11
Ask yourself beforehand:

1) Is it a unique product? If so, is it patented? If not, is it worth the risk of exporting it to countries outside the UK?
2) Do you have knowledge of targetted markets? What volume do they absorb? Is there any market?
3) Can it be easily copied?
4) Where can I manufacture it most cost-effective, to cope with price erosion in the future.


If you don't know the markets, you might consider to use export agents who know the local market and or attend various trade fairs to get a feeling and information of the area.

Be very, very suspicious when it comes to payments. Probably the amounts involved in your case are not that big and L/C is too complicated and expensive, so better ask for upfront payment on your bank account. If the client rejects, forget him. Lost product and money is twice suffered.

WG774
22nd Apr 2005, 14:21
Thanks again.

I looked into patents, but didn't bother in the end as I don't think the product will create more than £2mil profit, and patents don't make sense for a product that won't make more than that.

I was granted a European Registered Design with the Patents Office though, so that will stop any copycats in Europe. I'd like to extend it to the US, but can't see myself finding the cash... What a great system we have, where you need six figures just to protect your idea...

I know the worldwide market well, and trade regularly abroad for one-off items. My biggest concern is with "Export", i.e. getting paid, but without putting so many restraints on the other party as to make them jump through hoops.

btw, I have a UK-based dealer who takes CC orders and posts worldwide, but US buyers have told me they will only purchase from a company based in the US...

Cheers

bear11
22nd Apr 2005, 18:53
Forget the US for the minute - it's too messy to start, however tempting. Stick with the EU - no export paperwork these days. And forget banks - they're a waste of space. Have a look at the following links:

http://www.link2exports.co.uk/

http://www.export.co.uk/index.htm

https://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/splash

http://www.chamberonline.co.uk/exportzone

The official sources COULD be very helpful to you in supplying free information, grants, and invaluable contacts. Mind you, you need to assess the information very carefully, as they are not business people themselves, although some of them may fondly think they are. In Ireland, we have a system where local chambers of commerce employ retired people who have pots of experience to mentor part time for startup firms - this is absoloutely invaluable if you have it in the UK and they have good people mentoring.

If you're ever going to make money, the time is now, as your product sounds new and you have registered the design. You don't need to take over the world - just get the business to a level where the product catches the attention of a larger company who have the wherewithall to take it on. As Capt KAOS says, the best product and all the advice in the world is no use to you if you don't get paid, or you get stung on currency exchange rates. There are ways of doing it, but cashflow is the killer for every company.

It's far too big a subject to cover in one mail, and you really need to get into specifics on your product and what you want to do with it. I hope this helps!

OldCessna
22nd Apr 2005, 19:51
Check your PM messages!

WG774
22nd Apr 2005, 22:12
Speaking in all honesty, I am somewhat humbled at the quality of response I've received so far.

The bookmarks have been saved Bear, thanks!

Many thanks to those who sent PMs - I'll be onto them tomorrow when I haven't been near a pub.

Cheers :ok: