eCommerce is Great! -- Global eCommerce sometimes won't work

Sure, we have all seen how great Amzaon, Alibaba and other eCommerce giants are doing. Lots of small businesses are leveraging them to get their own products sold and delivered around the world. Amazon even has set up operations with warehousing within their different regions to give local, fast, efficient sales, delivery and service.

But eCommerce, as most people envision it, doesn't work with anything that requires an export license and has the additional burden that you legally need to know not just what you sell, but where you sell it, to whom you sell it and what the end user will use if for, BEFORE you transact the sell (more on this in a moment)

I am not crazy - check the shipping documents for DHL, FedEX, and all the rest of the 3rd party shippers and you will probably see an innocuous little check box for you to affirm that the shipment is NLR (No License Required). That means they want you to tell them that no export license is needed. That is important because an export license, if it is granted, can take several weeks to obtain and no shipper is going to hold your product for several weeks waiting for an uncertain license and most customers don't think of eCommerce as taking several weeks to ship (eCommerce being instant gratification after all).

Back to that silly list of things you legally need to know.... It's true in general, but especially true of US exports, that you cannot sell things to the bad guys or bad things to companies or people you haven't checked out. In the US part of that checking out could include an export license and certainly includes some due ciligence checking the right information, lists, etc. (and documenting your due diligence).

In the end you need to know what you are selling and whether or not it needs an export license (and it's not as simple as you hope because many products are "Dual Use" and you need to know whether yours is or not).

Then you need to make sure the country you plan to export to isn't on any prohibited country list (yes, there are a few, mostly well known countries on these lists).

Once you get this far, then you need to check the Denied Persons Lists to make sure the Company, Person(s) or address are not on the list.

And finally, though it will definitely cause some heartburn, you technically need to know what the end user will use your product for... a vegetale store probably shouldn't need biochemical equipment, a clothing business probably shouldn't need super computer parts, so if they order it you need to ask and understand what they will use your product for. Okay, Okay, so there is not way for you to know to whom your distributors will ultimately sell to or for what purpose, BUT you need to do due diligance and at least attempt to determine this and document the distributors reply.

So, yes, eCommerce is a great thing and many businesses will benefit from it, but don't do it blindly without checking the questions above.

Can you get the Export Grandslam?

The bad news is that new exporters do not generally qualify for the export grandslam, but if you are an existing exporter with at least one year of export experience then you could qualify for the Export Grandslam:

First Base: Department of Commerce Gold Key Program to find highly qualified and vetted Distributors or customers in your Target export country.

Second Base: one of at least three Small Business Administration Export Loan Guarantees to capitalize your export business.

Third Base: Export Import Bank‘s Export Credit Insurance to reduce the risk of non-payment by your export customer who required you to extend them credit to do business.

Grandslam Homerun: Center for International Trade Development’s STEP grant, export marketing reimbursement for example to pay for the Gold Key Program.

Yes, it can be a little complex since it deals with four different agencies but we can help you put together this phenomenal play and get an Export Grandslam. Just ask!

If you have never shipped further than your family in Texas or your customer on the other side of the country, it may seem that shipping is pretty straight forward or even simple. But when you start thinking about shipping to one of the hundreds of countries outside of the US, things suddenly become potentially disastrously complex. Suddenly there are multiple governments and their respective laws, regulations and tariffs, people, languages and cultures to make something that should be simple shipping into a potential nightmarish headache.

For example, almost everyone has heard the term FOB, some actually know it means "Free On Board", but most people can't actually tell you what it means about shipping risk and costs. What would happen if this gets translated into the other country's language and they really don't define "On Board" the same way. How would you negotiate a shipping contract?

To avoid this nightmare the International Chamber of Commerce has developed a set of INternational COmmerce (INCO) terms that are defined and accepted globally. When you use the term FOB it means the same thing around the world, thus eliminating translation, cultural and other differences.

So you should definitely include the proper INCO term in all of your shipping documentation. Of course, "proper" is subject to negotiation, but that is one of the advantages of using INCO terms - since every INCO term is accepted worldwide you know exactly what each term means in terms of risk and costs, so you can clearly negotiate with your customer how you both agree to share the risks and costs of shipping.

A number of existing resources can help you find out how much money is being spent on specific market segments in many different countries. They may not address your specific product or service, but they can tell you a lot about that group or market segment of similar things that people are spending money on in specific countries, what percentage of GDP that represents, and so forth.

This list includes Export.gov, US Census, United Nation Internatíonal Trade Association, etc.

Some are free or have a free version:

https://comtrade.un.org/data

https://traademap.org

There are some with paid subscriptions but others like US Census only require registration:

https://usatrade.census.gov/index.php

General information sites include

https://www.export.gov

https://globaledge.msu.edu

And of course you can always get help at your local Small Business Development Center (SBDC) or contact us.