Gambia Import / Export Business
Advantages of Exporting: Increased market size.
Market suitability. Some products might be more suited
to certain overseas markets than to the UK. This might perhaps
best be illustrated in terms of luxury goods which the domestic
market might not be able to afford but which might find
a ready audience in more affluent locations.
- Currency benefits. Changes in exchange rates can prove
advantageous when selling to a customer against whose
currency sterling is weak.
- Protection against a downturn in the domestic market.
- Protection in the event of world recession since it
is unlikely that all countries will be equally effected.
- Economies of scale from manufacturing in larger batches.
There is the option of exporting without being a manufacturer,
for instance where one operates as an export merchant or
export agent and sells goods bought from British manufacturers.
Some British services are much in demand in worldwide markets,
examples being design, financial and managerial consultancy
services, engineering, computer software provisions, and
so on.
On perhaps a less business-like note, opportunities for
foreign travel can prove stimulating and refreshing to the
entrepreneur used to operating in purely domestic markets.
Import / Export Business : Disadvantages of Exporting
Sometimes higher costs of travelling abroad to obtain orders.
High management fees, shipping charges, agent's fees, etc.,
can sometimes increase the exporter's prices to a level
which makes goods and services uncompetitive in overseas
markets.
- Market unsuitability. Different cultures, customs and
languages can all present problems to the exporter and
can mean that a product and service suitable in the UK
has virtually no market abroad.
- Import rules and regulations vary between countries.
Sometimes rules change rapidly and dramatically.
- Shipping rules and regulations can prove complicated
and represent a vast body of knowledge which the exporter
will at least have to familiarise him or herself with.
- Currency. That earlier advantage of a strong currency
in exchange for a weak sterling might in alternative circumstances
prove detrimental to the exporter.
Starting an Import Export Business: Pricing and Getting
Paid
Costs of exporting can of course make products far more
expensive than when sold in domestic markets. Pricing
must therefore be carefully monitored and controlled and
take into account costs of freight, shipping insurance,
overseas agent's commissions, and other incidental expenditure.
Product insurance is essential and can be arranged through
insurance brokers.As a rough illustration of what factors
make for accurate pricing controls, the following must
be taken into account:
Collecting long-standing payments and debts can prove
a very serious problem, particularly for the small business.
One of the major attractions of dealing through domestic
export houses or buying agents in one's own country is
the relative certainty of being paid promptly, and in
sterling. Extended credit is not usually encountered.
Exporting direct on the other hand brings certain problems,
mainly of ensuring payment and avoiding risks incurred
from fluctuating currency exchange rates. It is no secret
that some countries have a reputation for speedy payment,
whilst others prove quite the opposite. Advice in this
respect is available from the following section of the
Department of Trade and Industry: Export Credit Guarantee
Department, Export House, 50 Ludgate Hill, London, EC4M
7AY
The normal procedure with a new customer to whom one exports,
is to use either Letters of Credit or other documentary
collection handled and co-ordinated by banks. If you plan
to offer credit, you should take up references in the same
manner as would be the case for a new UK customer.
Amongst the many methods of payment for which the exporter
might opt are the following:
Cash With Order - Before Delivery. This is of course
a normal business requirement for firms operating in domestic
markets. You might not actually get payment in advance and
some other method might be requested by the importer. But,
you can always ask!
Open Account - A large percentage of transactions take place
on open account, where invoices are provided, goods delivered,
and payments made by bank transfer. This is ideally a form
of payment used when a certain level of trust has been established
between parties to the transaction.
Bills of Exchange - This is a document that enables
the exporter to provide a period of credit to the importer,
usually sufficient to have goods shipped, collected, and
possibly sold before payment is made through the importer's
bank. A 'sight' draft is one that must be paid before title
passes in the goods concerned. A 'term' draft on the other
hand allows for payment some time after received, usually
in multiples of 30 days. Term drafts are normally extended
only to known clients of good financial standing. The main
benefit of term drafts is one of the customer being able
to sell goods well in advance of payment. In EEC countries,
some banks will avalise (guarantee) payment by their customers
of bills of exchange. Normally, because the exporter is
agreeing to some delay in receiving payment, a reasonable
amount of interest will be included.
Documentary Letters of Credit - This comprises an
irrevocable letter of credit, raised by the importer upon
instructions to his or her bank. The bank opens a credit
in favour of the exporter in which very precise conditions
are laid out in respect of supporting documents, methods
of despatch, details of the goods, and so on. Both parties'
banks confirm the agreement and payment is guaranteed. One
problem with regard to documentary letters of credit is
the amount of paperwork known to accompany the transaction
- commercial invoices, certificates of origin, shipping
documents, customs declarations, bills of lading and so
on are all required often with multiple copies of all documents.
Others form of documentary letter of credit exist. The most
desirable is the irrevocable letter of credit, given that
payment is guaranteed in all circumstances, including those
of revolution, currency crash, insolvency, and Act of God.
Factoring - Becoming increasingly more popular this
method is one of dealing with an international factoring
company which will handle all collections on behalf of the
exporter and provide credits in sterling. Usually factoring
companies are backed by major banks. Information on appropriate
factoring companies can be obtained through your bank or
upon request from: The Association of British Factors, 24-28
Bloomsbury Way, London, WC1A 2PX 0207 831 4268
|
Gambia Holiday News can offer you advice on shipping
to the Gambia. Within the Africa region, the Banjul
Port is unrivalled, turning around vessels much faster than the regional
competition and continuously being upgraded and modernised to meet the
needs of a growing trade sector anticipated in the Gambia
Trade Gateway Project (TGP). The
River Gambia is the main artery that runs through the entire length
of the country, and is navigable throughout the year by smaller vessels
up to 300 kilometres. Ferry operations are under the management of the
Gambia Ports Authority (GPA),
a public enterprise in the transport industry.
Do you have any questions about our shipping and business services
to and from The Gambia?
Then please contact us directly
|
|
