Finding Qualified Buyers

Finding Qualified Buyers

Once you've identified the markets that you’re going to target, you’ll need to find the buyers for your product in that market. There are various strategies you might want to consider:

• Search online. Use Google, Kompass, or Alibaba.
• Attend trade shows. For a list of trade shows, refer tobiztradeshows.com. 
• Contact industry associations. When researching your targeted export market, look for any relevant industry associations as they will often publish a list of their member companies or be able to provide one to you. 
• Use the Department of Foreign Affairs and International Trade (DFAIT) Trade Commissioners Service. For companies that are export-ready and have a commercialized product, the Trade Commissioners Service has offices in Canada, as well as over 150 offices internationally.

Taking Care of Logistics

Once you've made a sale, you’ll have to ship your product to your international customer. Because of the complexity of moving products out of the country, exporters will often get assistance from freight forwarders (companies that arrange the shipment of goods from one country to another). You can find a freight forwarder by visiting theCanadian International Freight Forwarders Association’s website.

Export Documentation: It’s All in the Details

Canada Border Services Agency (CBSA), the customs agency in the foreign country to which you're exporting, and even the buyer, all might require you to complete documentation to comply with import regulations.

The CBSA offers free seminars on exporting commercial goods from Canada. We recommend that you attend one of these seminars to understand what your responsibilities are.

If you’re exporting for the first time, we also recommend that you work closely with your freight forwarder to make sure your documentation is all in order.

Pricing it Right

There are various methods for you to determine the pricing of your product. The most common include:

1. Cost based. In this method you calculate all of the costs associated with manufacturing your product and exporting your products. Using this method, you can determine if exporting is a financially viable option for your company. Some important costs to consider are:
   • Fees for market research
   • Production costs
   • Export documentation
   • Freight and insurance
   • Import duties 
   • Wholesaler mark-up
   • Importer/distributor mark-up
   • Retail mark-up 
   • Travel expenses
   • Translation costs 
   • Product adaptation costs 
   • Commissions or other costs associated with foreign representatives
2. Market demand. Here, you’ll research the market to find out what consumers are willing or able to pay. If you determine that your current selling price is too high for the new export market, there might be ways for you to modify your product to bring its cost down.
3. Competitor pricing. If there are a lot of competitors in the new market, you might be forced to match your competitors’ pricing to compete effectively.

Payment Terms

It’s important to clarify with your buyer the terms of sale that outline the obligations, risks, and costs of the buyer and the seller.

Incoterms are the most commonly agreed upon terms of sale in international business. Please visit the International Chamber of Commerce website for a full description of incoterms.

Methods of Payment

You’ll want to make sure that you get paid in full and on time. How you manage this will depend on how trustworthy your buyer is. The basic methods of payment, listed in order of least risky to most risky for the exporter, are:

• Cash in advance. Your company receives payment for the goods, usually by wire transfer or sometimes by cheque, or even credit card, in advance of the shipment. Once you receive the money, you arrange to ship the product to the buyer. 
• Documentary Letters of Credit (LCs). These are usually a good compromise for both the buyer and the seller, and are the most common payment method in international business. LCs work by relying on banks to receive and check shipping documents and guarantee payment. For more information on LCs, contact your business bank.
• Open account. If the buyer is well established, very trustworthy, and has been thoroughly checked for credit worthiness, you might consider simply billing the buyer who will pay you at a later date.

Export Financing

In Canada, there are programs and associations that support and promote exporting by offering financial assistance. For more information on the programs available read the How to Finance Your Growing Export Business article.