How to Screen Your Potential Export Markets
When you’re screening potential export markets, pay attention to the needs of the markets as well as which markets are growing and offer you the greatest potential for success.
Step 1: Focus on needs
A logical first step is to conduct an initial screening based on need. A need is a lack of something. If a market doesn’t need your product, no amount of effort on your part will allow you to successfully market goods in that country. For example, if your product is air conditioners, you likely wouldn’t find much of a market for them in Iceland.
Try locating statistics on current product exports to the countries you’re considering. With this information, you can identify which products are being sold where and by whom. If a product is being sold in the market, you’ll be able to identify whether a need or demand exists for your product.
To get export statistics, check out the following:
International Trade Administration (ITA): The ITA promotes trade and investment and ensures fair trade and compliance with trade laws and agreements. On the ITA website, you can access information and services on U.S. international trade policy.
U.S. Exports of Domestic and Foreign Merchandise report: The U.S. Census Bureau publishes the U.S. Exports of Domestic and Foreign Merchandise (EM545) report. The report is extremely valuable because it allows you to compute the average price of the unit exported.
U.S. International Trade in Goods and Services report: The U.S. Department of Commerce releases trade statistics in its U.S. International Trade in Goods and Services report (referred to as FT900).
USA Trade Online: USA Trade Online provides U.S. import and export statistics from more than 26,000 commodities traded worldwide, as well as the most current merchandise trade statistics. You can subscribe online or by calling 800-549-0595, option 4, or 301-763-2311. The cost is $75 per month or $300 per year.
You can also access this site at no charge at more than 1,100 federal depository libraries nationwide. Find a federal depository library near you. This site is a service of the U.S. Government Printing Office (GPO).
Step 2: Narrow down the list of countries
Narrow down the list of countries by identifying five or so of the fastest growing markets for your product. Determine whether this growth has been consistent over the past few years.
Look at sales over the past two to four years. Try to identify those markets where the growth has been consistent from year to year. Also, try to figure out whether economic conditions (such as inflation or recession) could’ve impacted these trends.
Step 3: Develop a secondary list
Come up with a secondary list of countries — ones that may not be as large as your top five but that may provide opportunities for future growth. Look for markets that are beginning to grow and that have fewer competitors than those in your top five. If an emerging market is beginning to open, you may find the number of competitors less than you find in established markets. The countries representing these up-and-coming markets should also have higher growth rates, thus offering some exciting potential.
Step 4: Narrow down the list to the most-promising markets
Narrow down the list to what you consider the most-promising markets. Consult with the trade consultant at your local district office of the U.S. Department of Commerce. Also consult with Small Business Development Centers, freight forwarders, business associates, and others before moving on to the assessment stage.