Do you want to make your company recession proof? Jennifer Simpson, the Export-Import Bank of the United States (EXIM) Regional Director in Miami, Florida, recently shared some thoughts for small companies dealing in luxury items or sales of products that are impacted by seasonality. Read on to learn how exporting can drive revenue even in the toughest of market conditions.
Seasonality: It’s summer in Australia when it’s winter in New York
The Ben Kaufman Sales Company is a small business in Miami, Florida, that distributes printed towels and apparel. When summer is over in the U.S., Ben Kaufman Sales smooths their revenue flow by exporting their products to countries throughout the Caribbean. The business is extremely competitive and price is the primary buying criteria. Working with EXIM, the company increased their competitiveness by offering "open account" credit terms, expanding into new markets and acquiring new customers in existing ones. As an added bonus, companies that export seasonal products can retain employees year round, rather than hiring and firing every six months.
Luxury: It’s nice to have
Remember 2009? According to a report by the National Association of Manufacturers, the 2007 – 2009 recession, “was both the longest and deepest in the post-World War II era.” But China’s economy was growing by almost nine percent and Lamborghini sales there jumped 23 percent (autoevolution). When the economy is down in one place, smart companies shift selling efforts to other markets with extra spending power.
Also, consumers in the U.S. like to buy this year’s model. Other markets are more open to last year’s stock and there’s no need to short-sell old inventory when you can export it.
Currencies: They go up. And down.
A weak dollar may not sound good, but it actually could fuel international sales. When currency strength in one country drops, other countries may receive a better exchange rate and purchase more U.S- made goods and services. Companies that export can take advantage of currency fluctuations to drive revenue.
Trust: But protect yourself
Exporting is a gateway to new experiences and new relationships. Enjoy expanding into new markets. Enjoy it more by protecting the receivables generated by international sales with export credit insurance. Insure up to 95 percent of the gross sales invoice against nonpayment by foreign buyers. Leave no good deal on the table! Contact your local EXIM representative to learn more.