Tapping into Export Profitability
With exports on the rise, is it time to send your product abroad?
According to the Institute for International Economics, “U.S. companies that export not only grow faster, but are nearly 8.5 percent less likely to go out of business than non-exporting companies.” [As recorded by the International Trade Association.]
However, it’s found that less than one percent of U.S. companies export, which is appreciably lower than all other developed countries. Surprisingly, of those American companies that export, 58 percent send products to only one country.
With more than 70 percent of the world’s purchasing power located outside of the U.S., if you’re not exporting, you’re missing a tremendous international opportunity.
The Benefits of Exporting
Exporting Increases Company Sales and Revenue
Exporting is the next big step after expanding and saturating the national market. There are many rapidly growing economies out in other parts of the world just waiting to purchase your products and increase your bottom line.
- As recorded by the U.S. Census Bureau, those exporting businesses with fewer than 250 employees had 1.9 times more revenue than those that chose not to ship products out of the county.
- The U.S. International Trade Commission reports that small to medium-sized exporting U.S. manufacturers earn more than non-exporting companies.
- Revenue per employee is 70 percent greater for exporting manufacturers than non-exporting manufacturers.
Exporting Helps Companies to Grow Faster
The U.S. International Trade Commission found that U.S. businesses that export are regularly outperforming non-exporting competitors. Companies that export manufactured products show faster revenue growth, higher overall revenues, and increased labor productivity.
Exporting is of particular importance for companies where the local market is just too small to support specific products. Expanding to global markets increases the number of goods sold, which then leads to acceptable product price levels and a justified investment.
Companies That Export Are Likely to Be More Innovative, Efficient, and Offer Higher Quality Products
Branching out to other countries is not for the faint of heart. Initially, a considerable amount of time is devoted to setting up procedures. If you have the patience and stamina, exporting is shown to offer big payoffs beyond revenue.
Research has found that in as little as two years, exporters are seen to file seven times more patents and four times more product innovations than non-exporting companies. Many of these exporters contribute innovative ideas to the diverse nature of working in expanded markets.
In addition to becoming more creative thinkers in these highly competitive global markets, companies are forced to take the steps needed to become more efficient while improving product quality. Fortunately, any improvements made to increase innovation, efficiency, and quality at a global level also trickles down to helping sales at local levels.
The benefits of exporting are plentiful, but business success requires careful planning.
To learn more, The U.S. Department of Commerce’s resource, A Basic Guide to Exporting, is for you!
Are you wondering if it’s a good time for your business to export? We’ll point you in the right direction. Give us a call today to discuss all your manufacturing needs. (651) 451-9397