Q: My jewellery business is suffering a bit, but I’ve heard there’s great demand for British-made jewellery abroad, particularly in developing countries like India. I’d love to tap into these markets, but how do I decide when to take the plunge?
Nov 22 2011
Answered by: Neil Kuschel Ask a question
It’s great that you’ve spotted an opportunity for growth, particularly as the domestic market is currently slow. Many markets internationally are experiencing growth and selling abroad is a great way to diversify and spread your risk.
You’ve already taken the first step in researching possible markets, so now you need to consider the practicalities. In thinking about timing, be ruthlessly practical. Consider your business’ readiness; do you have sufficient volumes of stock to fulfill overseas demand, or the right infrastructure in place to get your product to market? Cash flow and funding are also key – you must ensure you have working capital in place at every stage of the exporting cycle.
Don’t forget that factors like exchange rates can also be a consideration; for example, the weakness of the sterling over the last few years has meant robust margins for the UK export market.
Once you’ve done your research and examined your timing and target market, you must also understand your chosen market in depth before beginning to trade internationally, including the language and cultural differences.
For example, although English is widely spoken in India, the culture is very different so think about joining with a
local partner.
You also need to consider how to ship your goods – something which is often overlooked. Different modes of delivery have varying costs, and different products require different methods. Jewellery is lightweight but high-value, so an express carrier could be the most reliable means of transportation. Note that some carriers may quote a rate that is just one component of the total cost without taking into consideration the cost of collection in the UK or the preparation of declaration and customs charges (in the origin and destination country). Also bear in mind that different countries can have a myriad of regulations and customs that an experienced third party carrier will be able to navigate; for example, it is not permitted to import pairs of shoes to India, only single shoes.
You might find the idea of setting up internationally initially daunting, but there’s lots of help and advice available. The UK Trade & Investment offers a range of services for UK exporters, including the Overseas Market Introduction Service. The British Chambers of Commerce offers export training services, export communications reviews, and support around export documentation.
This might all seem like a lot to consider, but the benefits are potentially very lucrative. Good luck!
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