International trade is something that is more accessible than it has ever been to companies across the world. With advanced technology and endless opportunities using the internet, as well as things like global trade software, you may be able to access international trade easier than you thought. Many businesses may believe that international trade is out of their comfort zone, so we want to convince you that you can reap the rewards by sharing our 5 top benefits of international trade.
1. Less competition
When you enter international markets, you may believe that you are opening yourself up to more competitors, but the opposite may actually be the case. Here in the UK, you are likely to have lots of direct competitors that you are trying to win business from, but if you expand overseas, the likelihood is there will be some countries that do not have many businesses similar to yours. You will of course be competing with more firms on the whole, but there may be regions in which you are able to dominate your niche, lowering the competition.
Make sure that you do your competitor research, as this could be the key to finding the ideal countries to sell your products in.
2. More revenue
As I’m sure you expected to read here, one of the greatest benefits of international trade is of course the opportunity to gain more revenue. If you only sell products or services in your home country, you are limited to the spending of the people of that region. If you branch overseas, you are opening up a whole new target audience across every country that you wish to trade in, which of course means they can spend their money with your business.
Every business owner knows that making money is the key to growing your business. You need money to reinvest in people, products and all the important factors of your business. The increase in revenue will also help you continue to expand into other markets and other countries, which will benefit you further for all the reasons we are talking about in this article.
3. Easier Risk Management
When you focus your business only in one country, you are often at a greater risk of something going wrong. This can be due to things such as social, environmental or political changes in your country. Essentially, if consumer trends change in your country for any reason, and this turns people against your type of product, you are at risk of losing a lot of business and sales.
In a very broad example, this could be a business that sells meat products, and an upturn in vegan and vegetarians in a particular country could mean that less people want to engage with the product.
Whereas, if you are operating in multiple countries across the globe, the likelihood is that not every country will follow the same beliefs and trends that you may encounter in your home country. Therefore, by having a market share in lots of countries, these potential issues are less likely to have a damaging effect on your business. You are now less reliant on a singular market, thus mitigating the risk.
4. Longer product life cycle
Product life-cycle is the amount of time that a product is introduced to a market to the time it is taken off the shelves. Essentially, it is how long people will be interested in buying your product or services. This is similar to the previous point, but when buyer trends change, people lose interest in a particular product. This is of course less of a worry when you are selling in more countries.
It is likely that if people in your home country become tired of your product, this will not be the case in all other countries, therefore prolonging how long you can sell your product and reducing the risk of losing your audience and sales altogether. International trade will get you in front of many different audiences around the world and help you to keep pushing your product out for as long as possible.
5. Currency exchange
This may be something that flies under the radar, and it will only benefit you in certain situations, but currency exchange can actually be an initiative to engage in international trade. I will explain this using an example. If you are based in the UK and you do business in the US, and the US Dollar is strong in comparison to GBP, you will make your revenue in USD. When you convert this money to GBP you will get more worth out of your money. This of course feeds into our second point that making money is important, so this is certainly a huge positive of international trade.
As well as currency conversion benefitting you, when your home country’s currency is low, you may be able to export more, as consumers from different countries may benefit from the currency exchange rate.
After reading these 5 benefits of international trade, we hope that you are able to make these work for your business and reap the fantastic rewards!