As Rupert Lee-Browne of the Forbes Council puts it, “small and medium businesses are driving economies across the globe.”

But here’s the truth: expanding into global markets isn’t easy, by a long shot. SMEs grapple with a mix of logistical, regulatory, and financial hurdles – not to mention trade disputes. Thankfully, for SMEs, understanding global rules and available support resources can make international expansion far less intimidating.

The good news? North America has begun to invest heavily in training, upskilling, and advisory programs. These resources are helping Micro, Small, and Medium Enterprise (MSME) exporters enter new markets. Read on to learn how SMEs can turn global trade challenges into new and exciting growth opportunities.

Small Businesses Are Making a Huge Impact Across North America

The North American economy is powered by small businesses. Over 99% of Canadian businesses are small or medium-sized, and 99.9% of all American companies are small. Although mega-enterprises tend to dominate the headlines, SMEs (especially micro-firms with less than 10 employees) are making more and more headway in the world of international trade.

Canada’s Growing Export Engine

Canadian small businesses have steadily expanded their global footprint. Per this Government of Canada resource:

• SMEs generated over 53% of Canada’s GDP from 2015 to 2019.
• SME export intensity rose from 3.5% to 5.0% over the last decade.
• The strongest SME export industries range from manufacturing and professional services to transportation and wholesale trade.
• Micro-firms (1–4 employees) are the fastest-growing group of new exporters.
• Service exports have jumped sharply; by 2020, 62.4% of SME exporters were selling their services abroad.

The U.S. Picture

U.S. small businesses export in different patterns but show similar momentum:

• Roughly 97% of U.S. exporters are small businesses, according to the U.S. International Trade Administration.
• MSMEs generated over $542 billion in export value in 2021.
• More SMEs are exploring markets beyond the United States–Mexico–Canada Agreement (USMCA) region, particularly in Asia, Europe, and South America.

Deputy Assistant Secretary for the U.S. Commercial Service, Bradley McKinney, says the America First Trade Policy has helped create “opportunities for U.S. businesses, especially small businesses, to sell their products and services around the globe.” And specific to Canada, the WTO’s Joint Statement Initiative has been instrumental in modernizing trade rules, boosting transparency, and alleviating the administrative burdens on smaller firms.

Together, Canadian and American SMEs are reshaping what North American trade looks like; it’s more digital, more diversified, and more resilient overall.

The Main Challenges Small Businesses Face When Going Global

Even though SME’s global trade influence is apparent in the U.S. and growing in Canada, SMEs still face formidable barriers when entering international markets. Some of the most common obstacles include:

1. Regulatory Complexity

Each country has different trade rules, certifications, labeling standards, safety requirements, and documentation procedures. For SMEs with very limited staff and resources, it can be highly difficult to keep up. Regulatory issues and violations can have several negative effects:

• Slow shipments
• Increased trade-related costs
• Problems entering new markets

The World Trade Organization (WTO) sums this up in an informative briefing: “Small firms are less resilient to regulatory changes, have less resources to adapt, are less able to absorb the costs of administrative requirements, and cannot spread these costs across a larger cost base.”

2. Access to Financial Backing

Exporting requires working capital for expenses like production, shipping, compliance, and insurance, all of which are essential for successful international trade.

Considering the general business climate, smaller firms often struggle to secure trade financing, especially when selling to new or unfamiliar markets. Many of these companies are simply trying to stay afloat in their home market.

3. Limited Market Intelligence

Many SMEs don’t have the time, resources, or specialized expertise to navigate the complexities of international trade. Specifically, they often struggle to:

• Analyze market demand: Figuring out what will sell and at what price can be tricky without in-depth research into foreign markets.
• Find distributors or agents: Finding and collaborating with dependable local partners is a challenge, but it’s a must for smooth operations.
• Assess risks: Shipping delays, currency swings, and other risks are rife in global trade, and the uncertainties can be paralyzing.
• Understand cultural or legal differences: Missteps in global regulations, labeling, or business etiquette can cost a business dearly.

Attempting to export goods or services without this knowledge can result in:

• Missed compliance deadlines
• Rejected shipments
• Poor partner choices

These missteps not only eat into profits but can also damage a company’s reputation and delay its ability to scale internationally. Over time, repeated mistakes can completely stall growth and make global expansion exceedingly risky.

4. Logistics and Supply Chain Management

International shipping can be incredibly complex, and many SMEs are ill-prepared for its intricacies. To get products from point A to point B, firms have to navigate customs procedures, Incoterms, insurance requirements, warehousing options, and return policies that vary widely by country.

For companies that have grown accustomed to domestic operations, keeping track of each of these moving parts can be overwhelming. In addition to that, mistakes can lead to higher costs, frustrated customers, and various other negative effects.

5. Trade Disputes and Geopolitical Uncertainty

Disputes over tariffs, subsidies, and market access aren’t uncommon in international trade situations. They often disrupt supply chains, raise costs, or force companies to tweak their export strategies. On-the-fly changes can hit smaller firms harder since they have fewer resources to absorb sudden shocks.

The reality for small businesses may be sobering, but these obstacles are highly navigable with the right support.

Resources Available to Small Exporters

North America has built an extensive ecosystem of programs to help SMEs build global capability. Here are the most important categories and where to find trusted support.

Training Programs

These programs give SMEs the foundational skills they need to navigate global markets.

• FITTskills International Trade Training. Globally-recognized online courses that let you learn essential international business skills at your own pace.
• Trade Commissioner Service (TCS) Learning Hub. Offers free courses, webinars, and market intelligence on exporting basics, trade agreements, cultural considerations, and industry-specific opportunities.
• U.S. Commercial Service Webinars and Bootcamps. Covers export readiness, e-commerce, documentation, customs, and compliance.
• Small Business Administration (SBA) Export Training in the U.S. Includes step-by-step export planning modules, plus sector-specific sessions.

Upskilling and Digital Tools

When small businesses continually refine their skills and employ the right digital tools, they can operate with far more confidence in global markets. Start with the following:

• Canada Digital Adoption Program (CDAP). Helps SMEs implement digital tools, automation, CRM systems, and e-commerce stores.
• Export.gov’s Market Research Library. Grants free access to country reports, sector guides, and opportunity analyses.
• ITA Digital Strategies for Global Sales. Educates users on cross-border e-commerce, online marketplaces, and digital marketing.

These tools make exporting more accessible and predictable, reducing operational barriers that stand in the way of international business for SMEs.

Consulting Services and One-on-One Support

SMEs perform best when they have advisors who understand their industry, target markets, and risk profile. These consulting and support resources can be a tremendous help:

• Trade Commissioner Service Advisors. Deliver matchmaking, market entry guidance, local introductions, and trade mission opportunities.
• EDC Export Advisors. Offer consulting on financing, insurance, cash-flow planning, and buyer risk assessment.
• SBA Export Assistance Centers (USEACs). Provide hands-on help with regulations, financing, and export planning.
• Provincial Trade Promotion Organizations. Deliver localized guidance, mentorship, and industry-specific expertise.

Whether you train digitally or in person, advisory services help to propel MSMEs from intention to action.

Get Started in the World of International Trade

Exporting is no longer reserved for massive corporations with deep pockets and global networks. SMEs across North America are expanding into new markets at a growing pace, supported by stronger training programs, more accessible advisory services, and a steadily improving export ecosystem.

If you’ve been thinking about international expansion, now is the time to take the first step. Start out small:

• Take a FITTskills course.
• Book a call with a trade advisor.
• Explore one new market using government-provided market data.
• Pilot a single product or service internationally.

The global marketplace only gets broader with time. With solid know-how, professional support, and confidence, MSME exporters won’t just participate – they’ll thrive.

The post Why global trade is within reach for small and mid-sized businesses appeared first on Trade Ready.

HR managers are complaining that potential employees are ghosting interviews, job seekers are ranting about not getting interviews because of ATS (Applicant Tracking System) platforms, and companies are complaining that they are spending countless hours looking for the right talent to no avail. 

Simply put: It’s messy out there—and people are noticing. 

A recent article by The Atlantic cut right to the chase when describing the job landscape in 2025–2026, nailing all these issues on the head with a simple title and byline “The Job Market Is Hell: Young people are using ChatGPT to write their applications; HR is using AI to read them; no one is getting hired.” 

For those looking for work, it might feel like a chaotic and fruitless process, but there are things you can do to rise above the noise and stand out— especially if you’re looking to enter the international trade job market.

Unifying all of these tips is an important ethos: if you truly have the skills and experience to benefit an employer and their business, you need to prove this in detail.  

This means specifying your previous wins by the numbers, showcasing your verified and validated expertise and education, and offering specific solutions to their problems. Your resume should be less about what you can do in general and a lot more about what you can do for the employer right now and into the future, down to the percentages. 

Proving your worth isn’t solely limited to your 1–2-page CV either. Proof comes in what you say and do in real life. That means you also have to reach out and immerse yourself in international trade networks. Showcase your experience and problem-solving expertise at events, in blogs, or on LinkedIn. Whether you like it or not, people who usually stand out make an effort to stand out, and that’s what will get you noticed by recruiters right now. 

Not sure where to start? Don’t worry; we’ve got 5 concrete tips to help you get noticed in today’s international trade job market: 

1. Cater your summary and skillset to trade’s most topical issues

The global trade ecosystem has fundamentally shifted. The World Economic Forum (WEF) reports that 39 % of core skill sets are expected to transform or become obsolete by 2030. Simultaneously, the World Trade Organization (WTO) emphasizes that investing in skills for trade is not optional—it’s essential, in their report “Investing in Skills for Inclusive Trade.”  

For the job-hunter, this means two things: 

One, trade-industry employers don’t just value traditional trade experience; they also value 

• digital literacy—especially with AI 

• regulatory fluency and compliance (hello tariffs) 

• a global-market mindset (diversification is on everyone’s radar) 

Two, your CV must articulate your ability to sit at this intersection of tradition and trend. 

So, when it comes to your resume or CV summary, make sure you highlight these topical areas of knowledge. 

That means, instead of saying something generic like “Global supply chain expert who gets results,” try something like “Accredited trade specialist who combines import/export operations, tariff-and-compliance knowledge, and emerging-tech fluency (AI/data analytics) to support global supply chains.”

This tip also applies to how you describe your key strengths. Instead of a long list of generic one-word skills, like “supply chain, logistics, and technology,” make sure you explain useful areas within these core topics. For example: 

• “Global trade compliance and tariff management (incl. classification codes, sanctions screening)” 

• “Supply-chain risk mitigation in geoeconomically dynamic regions” 

• “Technology-enabled trade operations: e-commerce logistics, trade-data analytics, cross-border digital platforms” 

When you tailor your job-search narrative this way, you reflect not only what companies want today but what they will prize tomorrow. 

2. Showcase your measurable results

Today’s resumes need to lead with calculable results. That’s because numerical metrics prove that you can actually attain real-world success markers—like ROI and revenue—that businesses need to thrive. For example, instead of writing “experienced with customs clearance in the APAC market,” opt for quantifiable increases and percentages, followed by the skillset used to achieve the win. For example: 

• “Reduced customs clearance delays by 18 % across 12 export markets” 

• “Negotiated freight-rates yielding cost-savings of USD 350K annually while strengthening carrier network across Asia-Pacific” 

3. Understand how Applicant Tracking Systems work, then highlight your keywords

Many large organizations and HR departments use Applicant Tracking Systems (ATS) to screen for terms and skills that their recruits will need to focus on. So, if their company is hiring a trade compliance specialist, terms such as customs-broker liaison, Incoterms, HS classification, tariff-engineering, export-control, sanctions, trade-compliance analytics, regional trade agreements (RTA) expertise, origin-marking and digital trade platforms would be words to consider.  

When it comes to how you apply these words to your resume, make sure you insert only what you actually have expertise in, and detail how you use this skill in real life to get numerical results.

So, for example, instead of saying “Experienced with customs compliance and regional trade in international markets,” choose something like: 

 “Implemented HS-classification and origin-determination processes across 14 markets, reducing customs delays by 27% and ensuring 100% compliance with regional trade-agreement requirements.” 

4. Validate your learning mindset and expertise with credentials

Nothing showcases your true expertise quite like a recognized credential. Recruiters don’t have to question how much training you’ve had or whether your knowledge is up to speed. This work has already been done for them through the verification process of the certification body.  

More than just letters on the end of your name on a CV, designations like the Certified International Trade Professional (CITP®|FIBP®) designation are industry-backed, meaning that professionals all around the world in public and private organizations recognize their ability to improve the skills of their employers.  

Moreover, a CITP is governed by strict rules and bodies, meaning that their knowledge base is regularly being updated to suit the current-day markets, a relief to employers seeking hires versed in the problems of today. 

In fact, many companies actively recruit for people with designations like the CITP. Browse through current-day job boards and you’ll find many well-known brands, organizations, and government bodies labelling these specific certifications as “an asset” to their currently open positions. 

5. Use your network and align with trade-specific organizations

Earning a professional designation like the CITP can also broaden your trade network—connecting you with other professionals with the designation and their contacts. Use this benefit to your advantage. 

Frequently, certification bodies have networking events, celebrations, and webinars where you can find or showcase expertise, and even one RSVP can open several job opportunities for you.  

Organizations like FITT also have blogs and CITP-specific spotlights that highlight people in the industry, giving you access to individuals who might be hiring or their connections who are hiring. A few clicks and a short message could also be the key to getting that first interview.  

Get more than your foot in the door—showcase the person, the potential, and the practical applications

For jobseekers navigating the international trade job market, the message is clear: you need more than a standard skillset résumé or CV. You need to present yourself as a player in a transformed ecosystem, fluent in technology, agile in regulatory shifts, and ready to bridge global markets. You need to showcase your passion for lifelong learning and improvement in your field, and you need to put proof to your abilities with real numbers and data.  

You will stand out with effort, and that’s the first step to getting noticed. 

What are the fastest-growing international trade jobs of 2026? Read this article to find out! 

The post How to land a role in the international trade job market appeared first on Trade Ready.

Operating across borders routinely exposes businesses to complex legal and regulatory friction – friction that can lead to disputes. Trade disputes create substantial risks for supply chain integrity, the ability to meet customer expectations, and for profitability.

Reactive attempts at resolution are rarely a good idea.

In this article, we will explain how companies that trade internationally can resolve and, even better, proactively mitigate common types of international trade disputes.

Jump to:

• Contract disputes
• Intellectual Property disputes
• Tariff, origin, customs disputes
• Distribution, franchise, or joint-venture disputes
• Investor-state conflicts e.g. expropriation or regulatory disputes

How does an international trade dispute arise?

An international trade dispute is a formal disagreement between entities operating in different legal jurisdictions. These disputes arise when one party considers that there is a breach of contract, treaty, or regulation – and when that breach negatively impacts their commercial interests.

Triggers vary from operational failures (such as late delivery, non-payment, or quality issues), through to complex regulatory conflicts involving tariff classifications or rules of origin.

Intellectual property rights can also come into play, while it’s not uncommon to see claims by foreign investors of unfair treatment or expropriation by a host state.

5 common trade disputes – and how to solve them

If you want to effectively manage trade dispute risk, you need to understand the potential conflict zones and their specific remedies. Here, we examine five prevalent types of international trade disputes – including actionable strategies both for mitigation and for resolution in each scenario.

1.     Contract disputes in cross-border transaction

These disputes arise when one party to an international contract fails to fulfil its obligations. Think about late delivery beyond contractual terms, late or non-payment, and quality discrepancies. It can be exacerbated by external factors such as currency fluctuations or force majeure events.

For example, consider a South American soybean exporter that faces a dispute after contracting to supply a Chinese buyer. When China imposed new tariffs, the exporter attempted to invoke a force majeure clause on the contract while the buyer refused the shipments at the new price, creating a conflict over which party bore the financial risk of the new regulations.

The soybean exporter should try to resolve matters according to pre-agreed mechanisms. Their international contract should specify governing law and jurisdiction, prioritizing alternative dispute resolution (ADR) methods such as ICC arbitration or mediation, over potentially lengthy foreign litigation.

The risk of cross-border contractual disputes can be mitigated by:

• Precise drafting: Contracts must clearly specify governing law, jurisdiction, and currency terms.
• Use of international commercial terms (incoterms): Clearly define delivery obligations and the exact moment risk transfers between parties, as defined by the International Chamber of Commerce (ICC).
• Continuous monitoring: Discovering divergence from contractual terms early on allows for implementing a fix before there is serious damage to commercial outcomes or the contractual relationship.
• Secure revenue: Mitigate non-payment risk by requiring advance payments or using secure instruments like letters of credit.

It’s also worth including force majeure and change-of-law clauses to allocate risk for unforeseen regulatory actions.

2.     Intellectual property disputes

It’s not uncommon to see an organization in another country infringing on your trademarks, patents, copyrights, or trade secrets.

Whether it’s misuse of IP or improperly licensing these trademarks across borders, there is a unique challenge here: different jurisdictions maintain varying levels of IP protection and enforcement standards.

We often see major disputes that arise even at the WTO level, such as the United States of America accusing China of inadequate IP enforcement, leading to formal complaints to the WTO.

Resolution often involves complex litigation in the infringing party’s local courts or, for systemic issues, state-to-state dispute settlement through bodies like the WTO. Preventative action against intellectual property disputes is better:

• Comprehensive registration: Register trademarks and patents in all relevant jurisdictions, not just the home country.
• Protective agreements: Utilize strong Non-Disclosure Agreements (NDAs) when sharing sensitive technology or designs.
• Proactive monitoring: Actively monitor foreign markets for unauthorized use or counterfeits to enable early enforcement.

It’s also worth ensuring that licensing agreements clearly define rights, territories, duration, and termination mechanisms.

3.     Tariff, origin, and customs disputes

Cross-border tariff and customs disputes are disagreements with national authorities over the classification of goods: including the place of origin, applicable customs duties, or import/export restrictions.

For example, a common operational dispute occurs when customs authorities at the port of entry reclassify imported goods under a different harmonized system (HS) code than declared, triggering unexpected duties and holding up supply chains.

Resolution is possible, but it involves formal administrative appeals to customs authorities – complaints that rely heavily on a verified audit trail of the goods’ journey and transformation.

Complaints can take substantial time to resolve, at best frustrating the end customer, and at worst leaving goods such as perishables unsellable. It’s a type of international trade dispute to avoid at all costs:

• Meticulous documentation: Maintain detailed records of production, value-added, and input origins to substantiate claims for free trade agreement benefits.
• Regulatory monitoring: Actively monitor applicable HS codes, duties, and regulatory changes in both exporting and importing jurisdictions.
• Risk allocation: Include specific contract clauses that allocate the financial risk of potential reclassification or new duties.

Another useful measure is to utilize trade compliance partners to build robust traceability into your entire supply chain, protecting your trade flows against regulatory disputes.

4.     Distribution, franchise, or joint-venture disputes

Cross-border partnership models such as distributor agreements, franchising, and joint ventures can often lead to flashpoints such as termination rights, exclusivity clauses, control issues, and conflicts between majority and minority partners.

Consider a manufacturer that triggers a dispute because it’s trying to terminate a contract due to a lack of delivery. The foreign distributor may benefit from local indemnity rights not explicitly addressed in the original contract, thereby blocking contract termination.

Resolution typically hinges on the governance frameworks established at the outset. Well-defined exit strategies and dispute resolution clauses are essential:

• Clear agreements: Draft contracts with precise roles, performance metrics, exclusivity terms, and termination rights.
• Upfront governance: For joint ventures, agree upfront on reporting rights, exit strategies, and protections for minority partners.
• Due diligence: Conduct thorough due diligence on a potential partner’s reputation and the local regulatory environment before committing.

As always, the most damaging disputes emerge from unsatisfactory relationships that remained that way for too long, so it’s worth maintaining regular communication and formal review mechanisms to monitor partner performance.

5.     Investor-state conflicts e.g. expropriation or regulatory disputes

Disputes with another nation-state are high stakes: whether it’s unfair treatment, breached investment treaties, or expropriated assets without compensation.

A notable example is the Methanex case, where the corporation launched a claim against the United States following California’s ban on a specific gasoline additive. The company argued that the regulation constituted expropriation of its business interests.

Investor-state cases are typically resolved through specialized international arbitration tribunals. Which tribunal is usually stipulated in investment treaties or trade agreements. It’s a long and expensive process worth avoiding:

• Treaty protection: Structure investments to benefit from applicable investment treaties that specify investor rights and protection against expropriation.
• Risk assessment: Conduct rigorous political and regulatory risk assessments of the host country before investing, focusing on stability and the history of regulatory changes.
• Dispute clauses: Include clear dispute-settlement clauses in contracts, specifying the arbitration body and seat.

Trust is at the core of dispute-free international trade, so always maintain transparent operations and good relationships with local authorities – full compliance with environmental and social laws should be a given.

Best practice as risk mitigation

Effectively avoiding the risks of international trade disputes is predicated on proactive risk mitigation. Following best practices and using practical steps will significantly reduce your exposure:

• Every international contract should define the governing law, the seat of arbitration, and the language of proceedings.
• Contracts should explicitly require the use of alternative dispute resolution (ADR) mechanisms such as mediation or arbitration before resorting to formal litigation; ADR facilitated by the ICC is one example.

• Keep meticulous documentation, certificates of origin, quality inspection reports, and communication logs as evidence for use in defending claims.
• Establish early-warning systems to monitor key indicators such as delayed shipments, payment delays, regulatory changes, and currency fluctuations.
• Be acutely aware of currency/exchange-rate risk and potential payment risks in cross-border transactions. Consider secure payment instruments like letters of credit.

By implementing these best practices, trade professionals can create resilient agreements, identify potential conflicts early, and structure their operations to minimize the probability and impact of complex international trade disputes.

The post How to handle (and avoid) 5 of the most common types of trade disputes appeared first on Trade Ready.

From the young age of sixteen, living in his hometown in Venezuela with modest savings and bold aspirations, Ramón Pinto knew he wanted to pursue a life of international entrepreneurship. It began as an ambitious teenage venture importing clothing from the United States to sell at home and ignited a passion that would eventually lead him across borders, industries, and continents and to the field of international trade.

A journey shaped by curiosity, ethics, and global ambition

When Ramón later immigrated to Canada, he arrived with a clear sense of purpose: he wanted to build a career in global business the right way. He was drawn to the idea of importing and exporting, but wanted to do so with ethical standards and practices—especially those set by developing countries.

Understanding the often uneven landscape in global economies, he wanted to move products from counties with competitive advantages to developing nations.

By doing this, he could create access to products that weren’t easily made in developing countries, either because these countries had limited production capacity, or because certain products were far more expensive locally.

He could put in-demand items into the hands of common consumers in developing nations. Moreover, he could make a meaningful impact on global markets, a driving force that is still part of his business to this day.

After college, he threw himself into entrepreneurship right away. His first company was an advertising and marketing business, a venture that would introduce him to the paper industry, a field that he is still in today.

Today, his business is SOLUPAPER LLC, and under 14 years of careful guidance and leadership by Ramón it has grown into a trusted global partner with a strong international footprint.

$15 million growth built on relationships and integrity

Ramón speaks openly about the early challenges of building a company, the doubts, the risks, the feeling of being a newcomer in an industry dominated by giants.

“In the beginning, everything seems overwhelming,” he says. Competing with established players, earning supplier trust, and securing capital required persistence and clarity of purpose.

He started with $60,000 in working capital but his willingness to remain focused, trust the process, and learn from every challenge has skyrocketed the company’s growth. Currently, SOLUPAPER has earned over $15 million in sales for four consecutive years, a milestone Ramon credits to a belief in building authentic relationships, mutual trust, and honesty.

“As a newcomer, the challenge wasn’t just about offering quality products, it was about proving that we could be a reliable option. Earning the trust of suppliers was one of our toughest challenges.”

“We had to show that we were serious, that we’d be around for the long haul, and that our business relationships were about more than just transactions. They were partnerships for mutual growth.”

He also believes a commitment to transparency worked wonders. He made sure his business and teams delivered on promises, remained accessible, and were honest about what they could and couldn’t do at each stage.

Using a creative mindset to finance growth

Capital constraints also shaped his leadership. With tight resources in the business’s early years, Ramón took a sustainable approach:

“Instead of taking quick, expensive routes, we focused on sustainable expansion, reinvesting our profits and seeking financing only when absolutely necessary. It wasn’t easy, and many times it felt like we wouldn’t make it, but every financial hurdle taught us to be more resilient and manage our resources efficiently.”

“The key was always keeping the long-term vision in mind, knowing that each sacrifice today would bring us closer to success tomorrow.”

Knowing when and how to grow with cross-border trade: decisions based on data and trends

As the business grew, Ramon realized that his company could not afford to stand still. The industry and market were changing rapidly, so he knew his brand had to adapt to new technologies, consumer trends, and market demands to keep its competitive edge. “We had to innovate continuously, not just in our products but in the way we did business,” he recalls.

One of the most decisive moments in his career came with the decision to expand the company’s product line and explore new markets. Understanding that the company couldn’t stick to what they already knew, he and his teams had to take some calculated risks to keep growing:

“We made decisions based on data analysis and trends, and we weren’t afraid to invest in areas that seemed uncertain.”

‘Today, that vision has allowed us to maintain a solid sales trajectory and continue moving forward despite industry shifts.”

Valuable lessons from a storied career in global trade

With all his years of experience in international business, Ramón has learned many lessons along the way. These include the following:

• Patience is key: Results don’t come overnight, but every step forward, no matter how small, brings you closer to your goals.

• Trust is earned daily: Whether with clients, suppliers, or your team, your reputation is what really sets you apart.

• Never stop learning: Every challenge is an opportunity to grow, adapt, and improve.

• Teamwork is essential: You can’t do it alone. Surround yourself with people who share your vision and are committed at every stage of the journey.

Today, after over a decade of experience and steady growth, Ramón can proudly say that what started as a small dream with $60K has paid off in ways he and his valued team couldn’t have imagined.

“As we continue to grow, we remain committed to the same values that guided us in the beginning: trust, adaptability, and perseverance.”

To all the entrepreneurs starting out today, Ramón offers sound advice:

“Don’t give up. The obstacles will be many, but each one brings an important lesson. If you continue forward with passion and dedication, success will come.”

“Entrepreneurship is a marathon, not a sprint. If you’re able to learn from obstacles and keep your eyes on your goals, the future is yours.”

He also has more practical guidance as well:

“Make sure you are as clear as possible about the terms of negotiation, and clarify Incoterms because not everyone knows them.”

Supplying global giants and seeing impact in real-time

One of Ramón’s proudest accomplishments is supplying transnational corporations, such as Smurfit, PepsiCo, and McDonald’s with SOLUPAPER products.

“It feels very good to drop by a supermarket and see products that are packed with material supplied by your company and team.”

Earning his CITP marked a major milestone in Ramón’s already successful career journey

Ramón pursued his CITP®|FIBP® designation to reinforce his credibility and commitment to the highest standards in international trade.

“Being part of such a well-recognized organization, coupled with the extensive experience I’ve gained, marks a major milestone in my career. This is a major achievement on my path as both a professional and a business owner.”

Moving forward, he sees the designation as a key asset that will add a competitive edge to his professional profile. “It will not only help me stand out but also empower me to continue expanding my career in a more global context.”

Starting out as a determined teenager just testing the waters of importing, Ramón has now grown into a seasoned leader of a multi-million-dollar paper company. He is living proof that a true passion for international trade can be turned into profitable success with hard work, integrity, and vision.

The post CITP Spotlight: Ramón Pinto, President & CEO, SOLUPAPER LLC appeared first on Trade Ready.

The following discusses the six most common forms of international business agreements, how they function, and what businesses ought to be aware of when writing or signing such agreements. 

1. International Sales Contracts: The Foundation of Cross-Border Trade 

An international sales contract is a contract that regulates a sale between a buyer and a seller located in different countries. It establishes prices, product specifications, terms of payment, delivery terms, risk transfer, and dispute resolution procedures. The most significant element of these contracts is the application of Incoterms, the internationally accepted system of delivery regulations issued by the International Chamber of Commerce (ICC). 

Incoterms can be defined as the essential terms of trade for the sale of goods worldwide. According to the National Law Review, more than 90% of global trade contracts incorporate Incoterms in some form. 

Some of the common errors that exporters commit include the use of undisclosed terms of delivery, no reference to the version of the Incoterms, and the use of purchase orders rather than a comprehensive contract.

Exporters should ensure that the selected rule of Incoterms fits their logistics and capacity, confirm payment security, and that the law in force is properly defined before signing.

2. Distribution Agreements 

A distribution agreement is a contract where a foreign distributor purchases products and sells them in a specified area. The model suits companies intending to expand abroad without having to invest in a foreign branch or sales force. The distributor manages inventory, marketing, sales, and customer support – they usually take on the brunt of financial risk. For an exporter they are a cost-effective entry mode to new markets without having a physical presence. 

Distribution arrangements may become problematic in cases where there is uncertainty about the territory, exclusivity, or ambiguity in performance obligations.

Exporters are recommended to evaluate the distributor market coverage, financial strength, brand protection commitment, and reporting obligations. Clear regulations regarding marketing, digital sales, and intellectual property aid in the avoidance of conflict in the short and long term.  

3. Agency Agreements 

Compared to distribution, an agency agreement is different because an agent does not buy goods. Rather, the agent markets the products of the exporter and receives commission on successful sales. The exporter has full control over pricing, ownership, and invoicing.

In most jurisdictions, agency agreements are highly controlled. For example, as per European Union Law, “commercial agents are entitled to statutory termination compensation even if the contract states otherwise.” 

Companies often face issues when they blur the line between agents and distributors, do not clearly define authority, or fail to include confidentiality and intellectual property safeguards.

Exporters should review commission systems, clarify that the agent is allowed to sign on behalf of them, and verify that all domestic legal requirements (including claims to compensation) are familiar.

4. Licensing Agreements 

A licensing agreement gives a foreign firm rights to utilize intellectual property – trademarks, software, proprietary formulas, technology, or manufacturing processes –  in return of royalties or fees. Licensing also enables firms to venture across borders without transporting products or constructing facilities. 

The greatest risks are in markets where intellectual property protection is weak. Poorly executed licensing agreements may result in unauthorized duplication, brand damage, or a dispute over the calculation of payments. Licensors need to specify the scope of the license such as territory, exclusivity, duration, and quality-control conditions. Audit rights are necessary to facilitate the proper reporting of royalty. 

Companies need to consider the robustness of local IP laws, review the production or service levels of the licensee, and determine the precise sanctions against abuse of intellectual property before engaging in a licensing agreement.

5. Franchise Agreements 

A franchise agreement gives a franchisee the opportunity to run a business under the name of the franchisor, using their systems and business model. Franchising is common in hospitality, food service, retail, personal care and education sectors. 

According to the International Franchise Association (IFA), the growth of franchising remains high. In 2024 alone, U.S. franchises were expected to grow by more than 15,000 new locations, creating over 221,000 jobs. 

Globally, franchise and distribution legal services have been projected to expand at a double-digit CAGR in the time period ranging from 2025 to 2035, which shows continued global growth. 

Cross-border franchising involves adapting to the local laws, consumer behaviour, and standards of operation. Failure can be common when training is inadequate or when franchisees do not stick to the set standards.

Major points to consider before signing are the franchise fee, royalties, advertising expenses, quality-control measures, and the limitation of brand usage.

6. Joint Venture Agreements 

A joint venture (JV) is the process in which two or more companies establish a new business or a new business partnership to enter the market, create new technologies, or distribute the operational risks. JVs are widespread in fields where the entry barriers and capital requirements are high, or local knowledge is limited.

Nonetheless, JVs can be considered one of the most complicated international business contracts to negotiate. Mismatched expectations, poor governance systems, poor intellectual property rights, and exit systems are some major areas of dispute. Companies need to make clear profit sharing arrangements, decision making, dispute resolution, confidentiality, and jointly developed IP ownership before joint venturing.

Key Action Principles for Drafting Strong International Business Contracts 

In any international business agreement there are a number of principles when drafting. Words should be used clearly, expressions that are ambiguous may mean something different in different jurisdictions. All contracts must stipulate the law of governing and dispute resolution system including international arbitration over treaties like the New York Convention.

The appropriate version of Incoterms and the port or delivery point should be mentioned in contracts. In transactions focusing on intellectual property, including licensing agreements, franchise agreements, and distribution agreements, clauses of high level of confidentiality and IP-protection are absolutely non-negotiable.

Due diligence is also critical. Companies ought to research on the financial strength, reputation, and capacity of their foreign associates. Knowledge of local regulations helps to avoid unforeseen liabilities during contract negotiations, and especially in markets where there are agency law or foreign-ownership regulations. Finally, every contract must include a transparent and practical termination plan, without one, even strong partnerships can end in costly disputes. 

Helpful Resources for Global Exporters 

To deepen your understanding of international business contracts, these official sources provide detailed guidance: 

Trade Commissioner Service (Canada): Offers practical guidance on legal, compliance, and contract considerations. 

ICC — Incoterms® 2020 (International Chamber of Commerce): The official ICC page for Incoterms®: authoritative explanations, purchase information, and guidance on the 11 trade rules used in international sales contracts. 

U.S. International Trade Administration — Learn How to Export: U.S. government guidance on export readiness, documentation, payment methods, and compliance, helpful when structuring international sales contracts. 

WIPO (World Intellectual Property Organization) — WIPO Home: Global IP authority with tools and guidance for protecting trademarks, patents, designs, and other IP central to licensing, franchising, and distribution agreements. 

Strengthening Your Global Business with the Right Agreements 

International expansion rewards companies that prepare well. Exporters are able to reduce risk, protect intellectual property and establish successful cross-border relationships with well-defined, well-considered international business agreements.

The knowledge of international sales contracts, distribution agreements, agency agreements, licensing agreements, franchise agreements, and joint venture agreements assists North American exporters to act with confidence and grow sustainably in the global market. 

The post 6 types of common international business contracts appeared first on Trade Ready.

As Peter Harrell of Carnegie Endowment for International Peace notes, “trade is a key element of solving global challenges that affect us all, like the green energy transition and the risks of AI and the digital economy.”

To compete and avoid costly mistakes, it’s critical for business owners, consultants, and aspiring trade professionals to learn the language of international commerce. Read on for 25 international trade terms you should know to confidently navigate global markets.

Basic international trade terms

On the most fundamental level, everyone should know these basic terms. They help to shape the foundation of cross-border trade.

• Export – Sending goods or services from your country to another for sale.
• Import – Bringing goods or services into your country from abroad.

• Tariff – A type of tax one country places on goods coming in from other countries. It drives up the price of foreign goods for both foreign businesses and domestic shoppers. According to Michael Ligon of Forbes, tariffs may be used as a “tool to regulate trade, protect domestic industries, and generate revenue.”

• Trade Balance – The difference between a country’s exports and imports. A positive balance means the country has more exports (a trade surplus). A negative one means that they have more imports (a trade deficit). To calculate trade balance, you’d use this equation: Trade Balance = Total Value of Exports – Total Value of Imports.
• Exchange Rate – The value of one country’s currency compared to another. It affects how much it costs to buy and sell across borders.

Shipping and delivery terms

These shipping and delivery terms will help you clarify obligations and make the trade process more transparent for everyone:

1. Incoterms (International Commercial Terms) – Internationally recognized trade rules that outline seller and buyer responsibilities in an export transaction. These rules were created by the International Chamber of Commerce. The following terms are all examples of commonly used Incoterms.
2. EXW (Ex Works) – A situation where the seller makes the goods available at a specified location. The buyer pays all the transport and export costs.
3. FOB (Free on Board) – The point at which the seller no longer owns goods. It’s when ownership is transferred to the buyer. It also determines who is liable when goods are damaged during the shipping process.
4. CIF (Cost, Insurance, and Freight) – When the seller pays for transport and insurance to the destination port. Once the goods are shipped, the buyer becomes responsible for any further costs.
5. CFR (Cost and Freight) – The seller delivers the goods to the vessel at the port of shipment and then pays for transport. They do not pay for insurance. The buyer unloads the goods at the destination port and pays taxes, tariffs, import duties, and any further transportation costs. Risk transfers from seller to buyer as soon as the goods are on board.
6. DDP (Delivered Duty Paid) – A deal where the seller takes on all of the costs associated with the goods (transport, insurance/losses, and customs duties). Once the goods arrive at the agreed-upon destination, the buyer is typically responsible for unloading the goods and transporting them from the port to their warehouse.
7. CPT (Carriage Paid To) – The seller pays for shipping to a named destination (they don’t pay for insurance). The buyer takes on risk once the goods are handed to the carrier.
8. Group C and Group D Terms – Group C means the seller pays for transport but not risk (CIF, CFR). Group D means the seller handles delivery all the way to the destination (DDP).

How much do you know about Incoterms® 2020? Take this quiz to test your knowledge.

Payment and finance terms

Whether you’re an importer or exporter, these finance terms can help reduce risk in any trade transaction:

1. Letter of Credit (LC) – A guarantee from a bank stating that the seller will get paid once all delivery terms are met and the bank receives proof of shipment. Think of it as the buyer saying, “If the seller follows the rules and sends us the appropriate documents, we promise to pay them.” The letter will outline the payment amount and when the payment will be made.
2. Bill of Exchange – A written promise that the buyer will pay a specific amount on a set date. It’s much like an invoice, but for international trade agreements.
3. Open Account –  A sale where the seller ships goods before the buyer pays (usually 30, 60, or 90 days before the payment due date). This type of arrangement is typically reserved for trusted, long-time buyers.
4. Documentary Collection – A payment method where the seller’s bank collects payment from the buyer’s bank once shipping documents are exchanged. The banks don’t verify the validity of the documents, though. This form of payment is ideal for merchandise and commodity exports.
5. Forfaiting – Selling future medium and long-term receivables to a bank or finance company at a discount to boost cash flow.
6. Export Credit Insurance – Insurance that protects sellers if the buyer doesn’t pay or if political issues interfere with the transaction.

Learn more about trade finance terms.

Trade policy and compliance terms

Trade policies and regulations shape how goods cross borders. These terms help to define the rules behind tariffs, agreements, and market access.

1. Free Trade Agreement (FTA) – A deal between two countries that want to trade freely. As part of the agreement, tariffs are usually reduced or removed for certain goods and services. Other trade barriers may be eliminated as well (quotas, subsidies, etc.).
2. Non-Tariff Barrier (NTB) – Anything that makes it harder for two countries to trade with each other. Some of the most common NTBs are quotas, special standards, and licensing rules.
3. Customs Duty – A tax charged for any goods coming into the country. It is expressed as a percentage and is based on the item’s total value.
4. Harmonized System (HS) Code – The Harmonized System (HS) is a global system used to classify goods. This system is managed by the World Customs Organization. These codes have 6 digits, but individual countries may add more to allow for deeper classification.
5. Most-Favored-Nation (MFN) – A World Trade Organization clause stating that countries must treat all of their trading partners equally when it comes to tariffs and trade rules.

Logistics and documentation terms

Trade runs heavily on paperwork. These documents prove ownership, describe goods, and keep shipments moving forward without delays.

1. Bill of Lading (B/L) – This is a legal document that serves as proof that goods were shipped. It also acts as a title document and a shipping contract. Here’s an example of a B/L.
2. Certificate of Origin – A certificate that confirms where a given product was made. It’s used in the U.S., Canada, and Mexico. Although it’s not always required, a Free Trade Agreement (FTA) Certificate of Origin helps to determine whether a product qualifies for tariff benefits (low or no tariffs).
3. Commercial Invoice – The official document issued by the exporter to the buyer. It lists information about the goods, the buyer, the seller, and the shipment. It’s the main document used by the customs authorities in the importing country.
4. Proforma Invoice – A preliminary invoice is very much like a quote; it shows the buyer what a shipment will include and how much it will cost. It is sent to the buyer before the goods are shipped.
5. Packing List – A list of what’s inside each package. It includes quantities, weights, and measurements, and more. It’s used for customs checks and warehouse organization.

Mastering the language of global trade

Knowing the above terms can help you “speak trade” more confidently when negotiating contracts, shipping goods overseas, or reviewing customs documents. The more fluent you are, the smoother your deals and deliveries will be.

To dig deeper, explore more trade glossaries:

• Incoterms® 2020
• International Trade Council Glossary
• American World Trade Chamber of Commerce International Trade Glossary
• World Bank Global Trade Glossary

The post 25 International trade terms you should know appeared first on Trade Ready.

It’s an active, creative role, in export experiments.

Why? Well, let’s consider the alternative. If finance leaders don’t involve themselves in the early stages of the process or take their seat at the table, it’s easy (and sometimes tempting) for sales and marketing teams to work around them in the interest of speed (which can mean haste) and simplicity (which can mean lack of oversight).

So to avoid being worked around or waiting to be asked, you can reframe the role. What if international expansion wasn’t a plan to approve, but an experiment to help design?

This article breaks down, in easy-to-implement terms, how finance leaders can add value to international expansion conversations, collaborate successfully with their energetic sales and marketing teams, approach pricing, and help shepherd a sound strategy through the hurdles of budgeting and resourcing.

First off, why should you expand into international markets?

The usual reasons for seeking international expansion are overall business growth or diversification in pursuit of long-term sustainability. Simply put, many businesses see international expansion as a way to grow or maintain their business by finding markets that they can access efficiently, by leveraging their current capabilities and resources.

Simple enough in theory. But to avoid becoming embroiled in a complex reorganization of resources, or blocked by regulatory obstacles, it’s important to have a clear picture of what success looks like ahead of time and what could get in the way.

That starts by acknowledging the various entry paths, and selecting the one that best fits the organization’s needs and abilities.

And you, as finance leader, play a role in these early conversations, as you bring a unique perspective to the table. You’re helping design the experiment after all.

Choosing a balanced path to expansion

Organizations typically choose between two options, or attempt to strike a balance between them:

1. “Run & Discover”: Plan loosely ahead of time and revel in the agile adaptation process as you learn about the new market by actively participating in it
2. “Plan Ahead”: Work out as many details and contingencies as possible ahead of time and methodically enter the new market prepared to conform to its requirements

As you can imagine, these two paths benefit from balance. To enter a new market completely blind, even with a propensity for flexibility, would be fool-hardy. And assuming you could ever understand a market completely without ever being part of it would be naive.

A balance must be struck.

And you can strike that balance by running an “FVP check”:

Feasible, Viable, Profitable.

It’s here that you can speak up in those early export conversations and help the individuals planning for international expansion test the feasibility, viability, and profitability of their entry plans.

Core questions to be asked—and that Finance will help answer:

1. Is this idea feasible?

• Can we do this logistically with what we have today, or do we need to adjust something?
• Can we do this legally, with the permits and certificates we have today, or do we need other credentials?
• How much time and budget would we need to get ready? Do we have that available or accessible

2. Is this a viable path?

• Does this have longevity or is this a seasonal trend?
• Is this a reaction to a domestic market change?
• Are we responding to consumer demand or is this a blank slate approach?

3. Can we do this profitably?

• What is the profit margin we want (or need) to realize?

By identifying the feasibility, viability, and profitability of the expansion efforts, you are rewarded with clues as to which path to choose and how to balance its upsides and downsides.

For instance, if the organization determines FVP is a resounding ‘yes!’ and this is driven by both leadership energy and consumer demand with a seasonal timeline, it may want to lean toward a more adaptive and flexible approach (aka Run & Discover), making changes as the market context reveals itself.

But if the organization needs time to shore up logistical steps and is responding to changes domestically, with narrower profit margins, it may want to lean toward a more thorough and detailed plan before taking the next step. This could help ensure that it doesn’t financially overstretch itself in the early days and put undue pressure on the business and teams.

But it’s one thing to identify a market that might be ready for a new entrant. It’s entirely another thing to ensure the new entrant (your organization) is ready for the expansion.

How can Finance help manage these risks? By seeing things as experiments to be explored, established, and tested. This isn’t about creative brainstorming. It’s about shaping credible, constrained experiments. Ones that protect margin, mitigate risk, and give your team confidence to move.

Selecting the right sales channels

Once you’ve chosen your path, international sales and marketing expansion requires choosing your channels. And these have many financial considerations and impacts:

How will you sell and market your products or services in a different geography? How will customers become aware of the opportunity, how will they purchase it, and how will their purchase be fulfilled or delivered?

These can feel like Sales and Marketing questions, but savvy finance leaders get involved in these creative conversations.

The answer to these questions starts with an “assessment of control”.

Think about it this way: If the organization doesn’t need any control and doesn’t care to have it, you can partner with a firm that will handle all of these pieces for you and send you a cheque for sales and/or a bill for services rendered.

If it requires all the control, you’ll likely need to set up a permanent, local office to handle marketing, sales, distribution, and delivery. Not to mention the legal and regulatory paperwork and communication.

As you can see, the likely best path forward for most organizations is some balance between these two extremes. Therefore, you want to consider your capacity, your customer’s expectations, and the market’s behaviour.

For example, does anyone in the company speak the language? Can someone regularly travel to the market? Do you have the team bandwidth to manage a new market, or will you need to hire? What does your customer expect: hands-on help, asynchronous support?

The ensuing Venn diagram of your capacity, customer expectation, and market behaviour, will reveal an ideal market entry strategy to explore, and direct the pricing strategy to adopt:

• Direct or Indirect (aka Trading Entry) where you can leverage the supports of agents, resellers, distributors and wholesalers if you want extra help along the way
• Through licensing, franchising, or subcontracting (aka Transfer-Related Entry)
• With physical presence in the foreign market (aka FDI Entry)

You’ll notice that all of these have associated costs and/or savings and will impact (and be impacted by) the firm’s profitability.

Choosing the level of profit margin your organization wants to maintain or achieve is often either market-driven or value-based. And your export experiments will be structured around it.

Setting your starting price

Your prices can be set by the market and its expectations and bargaining power, or they can be set based on your costs and the value delivered with an additional margin added on.

This is another critical area for finance leaders to be involved in conversations and decisions. It may not be clear to sales and marketing teams what a planned price will do to the organization’s overall profitability, even if it makes the product or service easier or more likely to sell.

Conversely, sales and marketing teams may not be aware of opportunities to create savings or provide lower prices by benefiting from the firm’s financial capacity or tolerance for risk.

Pricing and selling decisions, made in a vacuum, are unlikely to fully account for your organization’s financial situation, requirements, or goals.

One key area to fully investigate is the “Export Price Floor”: That is, what is the absolute minimum at which you could sell into a new market without losing money?

To design the right experiment, you need to know it, including the often-overlooked export costs that can quietly undermine profitability.

Additional product costs can include:

• Modifications for market requirements
• Certifications for safety testing
• Packaging adaptations

Additional Sales and Marketing costs can include:

• Travel and trade shows
• Website adaptations
• Legal reviews

There are shipping and financial trade costs too:

• Duties, customs, and clearance fees
• INCOTERMS implications for insurance and payment timelines
• Commissions and professional service fees

If the price floor is higher than sales and marketing feel is feasible, this could trigger a careful look at the feasibility of the expansion. If the price floor, however, is well under what is deemed achievable, that represents a significant opportunity for profit.

And then, of course, there is the ceiling. Sales and marketing will likely have a clearer sense of the absolute maximum at which they could sell into the new market and still expect any customer uptake.

It is the balance, the just-right Goldilocks scenario, struck between these two boundaries that represents your “experimental space.”

No matter how thorough the pre-planning or preparation, it is unlikely that the first price will remain the permanent price. Costs will change as scale develops, competitors will emerge as success is demonstrated, and customers will assert their bargaining power as familiarity builds.

That’s why it’s key to see this range of possible prices as a space in which to credibly experiment. To find the right price by experimenting with what is possible and what is preferable to the firm and its customers.

It’s imperative for you to be comfortable with the terms and structure of those experiments. And that’s done by being at the table, collaboratively designing them from the start.

The winning mindset is a team mindset

Success is a team effort.

Financial leadership can guide teams toward successful expansion into new markets. But only if you’re playing an active, interested, and engaged role on the team.

When it comes to international expansion, nobody gets to stand on the sidelines and still expect to influence the final results. Your leadership will be critical to your team’s success.

So, with these reminders and questions on your mind, it’s time to proactively guide your organization’s expansion.

Because when you help design the experiment, you don’t just approve a plan.

You create the ideal outcome.

The post Why the finance team should be part of your international expansion plans from day one appeared first on Trade Ready.

As an example, Singapore and Malaysia are bordering countries and members of ASEAN, but very different in social, legal, economic, political and technology contexts. Simply put, the markets are unified under the ASEAN framework, but highly fragmented and unique, and as such each market needs different entry and development treatment.

Competition should be reviewed and assessed during the trade readiness stage.

Price decisions must be made based on factual market intelligence and a logical thought process which takes into account customer demand (price elasticity), total addressable market, cost function, logistics, and competitors.

A SWOT analysis (figure 1) should be completed, keeping in mind that you will most likely be facing local and imported brands. Without exceptions all competitors and alternatives must be reviewed and analyzed.

High-end elite and luxury brands command a price premium in most global markets. However, as a new entrant you may not be able to leverage your home market brand equity. In that case, you will need to build brand equity to achieve that premium price.

There are 4 stages to reaching that premium price level:

1. establishing brand awareness
2. building brand acceptance
3. attaining brand preference
4. achieving the “holy grail of branding”, brand insistence

All of this this takes time and investment.

There is a longer-term hierarchal approach to developing an international or overseas market. This approach begins with exporting your product to your new market – entering it for the first time. When the business builds traction and gains momentum, a local sales and marketing support office and inventory can be established.

Investing in local production assets eliminates value-detractor costs like shipping, handling fees, and duties (depending on relevant trade agreements). Moreover, local production could serve as an export platform to neighbouring countries as you expand geographically to continue growth.

In this hierarchical approach a company may accept lower profits to fast-track the initial stages, with the intention of maximizing profitability during the growth stage after investing in local production. This is often referred to as the “market entry fee”.

Not many companies will consider foreign direct investment (FDI) without first establishing a sustainable and scalable business model.

Again, it’s important to be patient. Establishing a foundation for a business could take three to five years.

5 pricing strategies to consider

Price positioning options should be evaluated, and a pricing strategy selected during the trade readiness – situational analysis and strategic planning stage.

There are many different price positioning options available, depending on:

• route to customers
• layers of distribution – retail or wholesale
• business-to-business (B2B)
• business-to-consumers (B2C)
• type or nature of the business

As an example, if you’re selling through a distribution network, the business model is business-to-business-to-consumer (B2B2C).

Multiple layers of distribution can be effective at reaching large or remote target customer segments. However, additional layers increase consumer cost, and it’s crucial to be mindful of this when selecting a pricing strategy.

There are many pricing and price configuration strategies to consider, and a business needs to decide the most effective strategy to achieve financial and non-financial objectives for each market and segment.

Selling directly to consumers or through a distribution network will also influence the price strategy choice. Most businesses entering the Southeast Asia or Indo-pacific region will sell through a distribution or channel partner network.

The most popular and relevant pricing strategies are premium pricing, penetration pricing, competitive pricing, cost-plus pricing, and value-based pricing.

1. Premium pricing

Premium pricing sets a high price for products or services reflecting superior quality, customer experience, and exclusivity. This strategy works well in the luxury goods segment where products are highly differentiated and unique with strong consumer brand affinity.

However, in most emerging and developing markets there are three distinct customer segments – premium, mid-level, and economy (figure 2).

The premium segment may be profitable, but it may also be the smallest customer segment with limited growth potential. Product and price positioning must be organizationally aligned with target markets and customer segments.

2. Penetration pricing

Penetration pricing is a strategy that sets the price lower than marketplace pricing to more quickly gain market-share. The idea is that lower prices will attract a larger number of customers. The profitability focus is higher-volume lower margin percentage, but higher margin dollars based on volume.

As an example – $1m sales at 50% GM = $500k margin dollars. $3m sales at 40% GM = $1.2m margin dollars. Ten percentage points lower, but 140% or $700k additional margin dollars.

The premise is as market share is built and brand equity develops and customer loyalty is gained, you can gradually increase your prices.

This strategy can be highly effective at penetrating intensely competitive markets where lowest price prevails and is the determining factor in deciding brands and suppliers.

However, it will be extremely challenging at any time to increase prices without alienating customers, especially if you’re the only one increasing. On top of that, competition will retaliate and it becomes a race to the bottom, and a race that’s unwinnable – in most cases local manufacturers will have lower cost structures.

3. Competitive pricing

Competitive pricing is a strategy that prices products similar to brands already available in the market. You should also review products that are dissimilar that could be used as an alternative.

As an example, a nut and bolt and a rivet, both are mechanical fasteners similar in functionality but different. The rivet might be more expensive but it’s faster to install and offers an overall consumer cost-savings (the value proposition).

Alternatively, you could price your products slightly lower as you would with a penetration pricing strategy, but Southeast Asia or Indo-pacific markets are intensely competitive, and competitors will respond aggressively.

4. Cost-plus pricing

In my opinion, this is the most overused and simplistic method to establish pricing. This strategy factors in all contributing fixed and variable costs to establish a selling price to distribution with a fixed margin.

In most cases incoterms are FCA (free carrier), channel partners and customers arrange to have loaded containers collected from the manufacturer, trucked to rail yard, railed to port, and port to export destination.

The strategy is simple and generally applies to all products across all regions, markets and segments. The downside to this strategy is that it doesn’t take the consumer or market price into consideration. The strategy also excludes regard for channel partner margin, and if your product line is not profitable and salable, channel partners will soon lose interest.

5. Value-based pricing

Value-based pricing is grounded on target customers’ perception of value. I have found this strategy to be most effective in determining the right price to drive revenues and maximize profitability for companies and their channel partners.

The price point is determined using a demand curve that illustrates the relationship between demand at different price points. Corelate that data with VOC (voice of customer) to determine the threshold of affordability – in essence what the target customers are willing to pay for the products or services, considering the added value being delivered.

Figure 3 compares cost-plus and value-based pricing strategies.

The difference is determining the market price first as the threshold of affordability, then working backwards. Subtract distribution margin,  duties (if applicable) and logistics cost. That will determine the distribution selling price or distribution cost of goods.

The difference in profit between the two is cost-plus delivers 50% margin, and value-based 42%. As explained in the penetrating pricing section, you may need to accept a lower margin to increase demand.

The goal when determining a pricing strategy is to rapidly develop market share and drive profitable revenues for the business and any channel partners while considering the threshold of market and customer affordability.

As mentioned, this might take some experimenting before you get it right, that’s to be expected. Take the time to get it right, pay close attention to competitors and fully understand their key differentiators and value propositions.

Let research and data and a logical thought process drive your product and pricing decisions.

The post 5 pricing strategies for international markets appeared first on Trade Ready.

Politics drives economic policy and economic policy guides business decisions. Its critically important during geopolitical influenced economic uncertainties that we minimize assumptions and emotional biases to our products and companies and make data driven decisions and choices.

These decisions should be based on facts derived from keen research and analytics and a logical thought process. There is no shortcut, you need to do or contract-out the work.

Focusing on Southeast Asia markets

After living in Singapore and working throughout the Asia Pacific region for more than 20-years, I offer my opinion based on my experience and expertise to help companies navigate the inherent challenges and barriers and  successfully compete and win in the fastest growing region on the planet.

In particular, the ASEAN, Indo-Pacific, or Southeast Asia region has emerged as the global growth engine of the next decade and beyond.

Companies worldwide should be pivoting to the region to take advantage of new and emerging growth opportunities.

Export is crucially important to any growth-minded company. It establishes the first step to entering a new market. As your business scales you can decide upon progressive steps like establishing a local sales office, bonded warehouse, or local manufacturing. In most cases exporting leads to foreign direct investment (FDI) in local manufacturing assets, either greenfield or acquisition.

Southeast Asia is not a homogenous marketplace. Each country is a different ecosystem, with its own vibe and set of preferences, values and norms. New entrants must be capable of understanding and embracing social and cultural diversity.

One-size-fits-all cookie-cutter strategies fail in Southeast Asia, – you need to tailor your approach to each unique market.

Don’t just adapt to Southeast Asia, become a part of it. Take the time to understand the culture, the history, and the emotions behind customer buying behaviors.

Getting started with market research

So where do you start? The first step is to identify, validate and quantify opportunities, and determine your company’s export readiness. The second step is to craft your market(s) entry or go-to-market strategy and business plan – think of strategy as your logic and compass, and your plan the roadmap or process.

The third step is to develop a distribution network capable of reaching your target customers. If you’re selling B2B2C you need channel partners. This article will delve into the first step of evaluating export markets for your business.

Finding the best sources of secondary research

Normally, when I approach a new research assignment, I purchase two industry reports. A typical and focused market survey or industry report will cost between $2,000.00 – $3,000.00 US.

Industry reports are a market assessment tool that provide a comprehensive examination of a particular industry in specific countries.

In my Indonesia example below (figure 1), the company wants to sell its fiber cement exterior finishing products. The total market volume for exterior finishing products is 79 million M², fiber cement products represent 4% of the total market volume. The company’s addressable market in Indonesia is 3.16 million M². I then convert volume into economic value, (volume x wholesale cost per M².) Most reports will provide compounded and annual growth rates and trends.

Other valuable sources for secondary data are Export Development Canada (EDC),  Asia Bank, IMF, government websites, Channel News Asia, and a few of my favorites that require a subscription are Nikkei Asia, Oxford Business Group, Focus Economics. I also use a segment specific project and leads directory when needed – as an example in the Asia Pacific construction segment I use BCI Asia. Secondary research data can cost between $8,000.00 – $10,000.00 US, depending on the scope of the research project.

Presuming we now have loads of secondary data, the data now needs to be translated into quantifiable, meaningful and useful information that can be shared and understood cross-functionally.

Analyze your data using the PESTLE model

One of the most useful analytical tools to evaluate markets is the PESTLE model, (Political, Economic, Social & Cultural, Technology, Legal, and Environmental factors.)

The PESTLE tool has evolved over the years, starting as a PEST analysis more than 20 years ago, then to the SLEPT analysis, and to what is used today the PESTLE analysis. An interesting and important addition is the Environmental factors.

The importance of Environmental factors and compliancy and how this can be leveraged or translated into differentiation and customer value should not be underestimated.

Southeast Asia customers make brand choices based on personal value perceptions and the environmental benefits and impact of your products. In addition to the PESTLE model, I use a weighted scorecard to visually organize and present my findings.

In my abbreviated example below (figure 2) I am only comparing three countries, all countries under consideration must be evaluated. Each main factor will have five to ten sub-factors. Each sub-factor is weighted on importance and given a score, the scores are tallied, then each main factor is calculated. In my example the total score for Singapore main factor political is 36.

We then create a graph chart (figure 3) to visualize our comparative and quantitative analysis. Every company’s analysis will differ due to different metrics or criteria. Each company will also have a threshold, in my example my minimum threshold value is 120, so Indonesia and Singapore would be selected as my target markets for further evaluation.

Further evaluation would come in the form of primary data collection, so get your passport ready, you need to travel to meet the potential customers you intend to sell to.

Get your passport ready for primary research

The best source for primary data collection is “voice of customers” (VOC), and I am a strong supporter of trade shows in the Southeast Asia region. However, trade shows are expensive, and the merit of a trade shows needs to be carefully considered.

In the post-Covid environment trade show costs have increased to pre-Covid levels. Trade show space and booth design cost will vary, I try to cap this cost at $15,000 US. You also need to consider travel expenses, and that cost could be $10,000 per week including airfare.

Considering this, we need to establish clear and attainable goals or outcomes to justify the expense. For me my goals are to:

1. understand the market and customers and begin building relationships
2. interview potential customers
3. identify key competitors, and
4. recruit distribution and channel partners.

I have learned from past experience to add a week post trade show to follow up with contacts and prospects gleaned from the event.

As an example, prior to Vietnam’s economic awakening, we identified Vietnam as a rising economy and attractive market. We attended a relevant trade show and then the following week was filled with business development activities, visiting potential distributors and customers, and we appointed two new distributors.

At this point we have conducted our initial PESTLE analysis through secondary data collection, participated in our first overseas trade show, visited potential customers and channel partners, and we can now amend our PESTLE analysis based on the more comprehensive information gleaned from our overseas trip. Next, we need to assess our capabilities and ensure we are correctly positioned and aligned to capitalize on the opportunities uncovered. Are we export ready?

Evaluating your export readiness

Being export ready is more than a mindset, it’s a commitment of resources and funding to support a successful export endeavor. The export ready self-evaluation process will help define your strategy and plans. FITT’s Feasibility of International Trade course provides thorough and contemporary training on how to assess organizational readiness. Typical questions

• Are you willing to invest in resources, people, time and capital without an immediate return on investment (ROI)?
• Will your pricing strategy enable you to compete profitably?
• Is product customization required to meet specific market or customer needs?
• Are your products compliant to relevant codes or standards?
• A new one for me recently, will your bar-codes scan in overseas markets?
• If exporting to a non-FTA country, what is the duty impact to market pricing and profitability for you and your partners?
• What are your trade terms and conditions, do you need credit insurance?
• Have you established clear, relevant, and attainable goals?
• Do you have senior leadership and cross-functional support?
• Do you have an international freight forwarder?
• Do you have experience with export documentation, do you understand incoterms?

Each company is unique and will have specific questions relevant to their business and chosen markets. Go beyond the superficial qualitative narrative and translate the data into actionable quantitative information.

The next step is to craft your market-entry strategy and business plan. Remember each market is unique, and the Southeast Asia marketplace is not just about products and price-points, it’s about people and relationships founded on symbiotic trust, confidence and collaborative partnerships.

I will share my thoughts on strategy and plans in my next article.

For more valuable tips and concepts follow me on FITT, LinkedIn, or my website.

The post How to evaluate new ASEAN export markets for your business appeared first on Trade Ready.

With the Teamsters union reaching a tentative contract deal with UPS management just days short of the July 31 deadline, what is said to be the largest strike in a century against any U.S. employer, has been narrowly dodged.

Since UPS is responsible for almost a quarter of all U.S. deliveries, the strike would’ve been devastating on the U.S. economy. According to a study conducted by the consulting firm Anderson Economic Group, a 10-day UPS strike would stand as the costliest strike in at least a century, inflicting a staggering $7 billion economic impact on the U.S. economy.

UPS delivers more than 24.3 million packages everyday and its competitors like FedEX and DHL would not have been able to bear that kind of backlog had the strike taken place. “In the event of a market disruption, no carrier can absorb all UPS volume,” FedEx executives wrote earlier this month.

These disruptions have far-reaching implications for U.S. imports and exports, as delays and bottlenecks in key ports can ripple through the entire supply chain, affecting businesses across the continent.

And as we talk about supply chain disruptions, the impact of the Canadian BC port strike adds further challenges to North American shipping. Canadian National Railway Co., the country’s largest railway, predicts it will take two months to recover from the B.C. port strike. The recent two-week strike at B.C. ports halted freight flows through West Coast terminals, leading to a minor impact on earnings this quarter.

Projected impacts on North American shipping

The strikes have triggered considerable supply chain disruptions across North America. Additionally, freight forwarding and shipping services are under pressure due to increased demand amid global trade uncertainties. These disruptions have led to delays, congestion at ports, and challenges in meeting delivery timelines.

“I expect we’ll see shortages of inputs, higher shipping prices, which will ultimately be passed on to consumers, and longer lead times for deliveries if the strike takes place,” Bart De Muynck, chief industry officer at project44, a supply-chain data company told Bloomberg in an email.

According to survey results released by the Canadian Federation of Independent Business 53% of business owners believed that the strike will affect their operations.

Even though a tentative resolution has been met in both cases, the surge in freight forwarding demand will likely cause prolonged delays in the supply chain. This situation can lead to increased costs, reduced profitability, and potential damage to business reputations. As U.S. and Canadian imports and exports are affected, industries relying heavily on timely shipments, such as retail and manufacturing, may face significant challenges in meeting customer demands.

7 ways businesses can mitigate the unforeseen

As the shipping industry grapples with ongoing disruptions, businesses must consider mitigating actions to protect against further crises.

1.    Diversify shipping routes

To mitigate the impact of port strikes and disruptions, businesses should adopt a proactive approach and work to diversify their shipping routes. It is crucial to collaborate with reliable freight forwarders who can assist in identifying alternative routes that can be utilized during times of disruption.

By exploring and establishing contingency plans for various shipping options, they can ensure smoother operations and minimize the adverse effects of potential disruptions on their supply chains.

2.    Leverage multiple carriers

Relying solely on a single carrier at any point along a shipping route can leave businesses vulnerable to delays and bottlenecks when a strike occurs.

Experienced freight forwarders and logistics experts can help you plan for back-up carriers, both domestic and international, to spread the shipment load and minimize dependency on one provider.

This strategy not only minimizes the impact of major disruptions but also enhances flexibility and adaptability in the face of even minor challenges, allowing for the best service available.

3.    Optimize technology and tracking

Businesses can utilize advanced tracking systems and technology to monitor shipments in real-time. These systems enhance visibility and enable more proactive responses to potential delays or rerouting. This enhanced visibility provides businesses with crucial data and insights, allowing them to stay informed about the location, status, and potential challenges their shipments might face.

With real-time tracking, companies can  identify any potential delays or deviations from the planned routes sooner, enabling them to take immediate actions to address these issues.

4.    Re-evaluate contracts

Having full clarity on liability and compensation terms within shipping contracts and freight forwarding agreements is essential to navigate through periods of uncertainty. Are the correct Incoterms identified throughout the contract? Seeking professional legal advice during contract negotiations can help businesses to identify potential gaps or loopholes that could leave them vulnerable during crises.

By renegotiating contracts to include specific clauses that address issues related to labour disruptions, force majeure events, and supply chain delays, they can establish a solid framework for handling unforeseen challenges.

5.    Proactive communication

When faced with potential delays or disruptions, it is essential to keep customers informed in a timely and honest manner. Openly sharing information about the challenges being faced and the steps being taken to address them fosters trust and confidence in the business relationship.

By providing regular updates on the status of shipments and any possible delays, businesses can manage customer expectations and allow them to plan accordingly.

6.    Identify opportunities for flexibility

Another important thing businesses can do to is assess their logistics operations and identifying areas where they can be flexible. This involves recognizing parts of the supply chain where slower delivery or alternative transportation methods can be accommodated without compromising overall operations.

By identifying areas of flexibility, businesses can proactively communicate with suppliers, freight forwarders, and customers to set appropriate expectations and develop contingency plans.

7.    Invest in risk management

Investing in risk management is crucial for businesses seeking to enhance their supply chain resilience. By developing robust risk management strategies, companies can proactively address potential disruptions before they escalate into significant challenges.

A comprehensive risk management approach involves carefully analyzing the supply chain from end to end, identifying vulnerabilities, and understanding how various scenarios could impact operations.

What does the future look like for businesses impacted by the North American shipping strikes?

In the face of ongoing challenges, businesses must prepare for a future that prioritizes resilience and adaptability.

The recent strikes and disruptions have highlighted the need for diversified shipping routes, efficient risk management strategies, and transparent communication with customers.

Embracing advanced tracking technology and collaborating with reliable freight forwarders will become essential components of successful supply chain management.

Looking ahead, the future of shipping in North America will likely witness a growing emphasis on optimizing imports and exports through robust and flexible logistics networks. By proactively addressing potential disruptions and investing in innovative solutions, businesses can position themselves to thrive in an evolving and dynamic shipping environment, where the new normal is to expect the unexpected.

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