[ad_1]
Without trade finance, there would be no Indian spices, fabrics, or jewelry in the United States. Or Apple’s iPhones in China, let alone any other international product at any respectable distance from its origin.
In fact, according to Investopedia, the World Trade Organization (WTO) estimates that trade finance accounts for 80%-90% of international world trade expansion.
For this to continue, companies need to incorporate trade finance into their business development strategies.
How do you do that? Learn how you can incorporate trade finance into your business development strategy.
Involving inland trade finance in market entry and market development
Market entry and market development are key parts of a business development strategy. Market development involves selling more of your service or product to repeat customers.
While market entry is about expanding your product or service to other cities and provinces, it can also involve inland trade finance. As you may have to renegotiate local and provincial business deals.
For example, let’s say you sell jewelry. A business in a neighboring town can buy your jewelry and sell it to its customers.
You have a long history with this client. And know that your product is selling fast in your customers’ shop. In which case, you can make an offer to sell the customer more jewelry at a wholesale price.
After negotiation, the customer agrees. However, the customer may not feel comfortable paying you before you export the jewelry, despite your long, positive history with the customer.
This is where a trade financier or banking institution comes in, providing a letter of credit that you will export the jewelry upon payment.
Consider the Internet and Brick-and-Mortar Stores
If you are already selling more of your product or service to your customers, perhaps it is time to move to another channel, such as the Internet?
If you run a successful e-commerce store, maybe it’s time to start a brick-and-mortar store too?
This way, your customers will have more options on where to buy your products.
Especially when it comes to brick-and-mortar stores, trade finance can help you secure new import and export business deals—especially when multiple currencies are involved.
Creating a new product or service for repeat and new customers
With repeat customers, you are doubling the number of products that repeat customers are importing.
And, along with new customers, your new product or service will expand your customer base. It is important that you create new products for your repeat customers before going directly to new customers, as there is more risk involved.
Again, trade finance can help build more trust during this period of growth. Since trade financiers or banking institutions can draw up letters of credit, prescribing the conditions that importers and exporters must comply with.
Final Thoughts About Your Business Development Strategy
Know that growth does not happen in a day; It’s hard for businesses to make the jump from market entry to supplying new products to new customers.
This is why we recommend that you take development slowly. Know, however, that trade finance can help you increase the number of customers you do business with, wherever they are.
What is your take on trade finance? How has it helped your business? Share your views, comments and feedbacks with us.
[ad_2]