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U.S. Department of Commerce | International Trade Administration | U.S. Commercial Service

EXPOTING

Guide to

Exporting

11th Edition

Doug Barry, Editor

U.S. Commercial Service

U.S. Commercial Service - Connecting you to global markets. A Publication by the U.S. Department of Commerce • Washington, DC A basic guide to exporting / Doug Barry, editor. -- 11th edition. pages cm “A publication by the U.S. Department of Commerce."

Includes bibliographical references and index.

ISBN 978-0-16-092095-0 (alk. paper)

1. Export marketing--United States. 2. Exports--United States. I. Ba

rry, Doug (Business editor) II. United States. Department of Commerce.

HF1416.5.B37 2015

658.8"40973--dc23

2015010057

Interviews, success story photos (excluding stock images), and other third-party content provided by and copyright their

respective owners; used with permission. Under U.S. copyright law, may not be reproduced, in whole or in part, without

written permission from their respective owners.

Stock images acquired from Thinkstock by Getty Images; used with permission. Under U.S. copyright law, may not be

reproduced, in whole or in part, without written permission from Getty Images, Inc. Selected forms in Appendix D appear courtesy of Unz & Co., a division of WTS Corporation.

All type is set in the Myriad Pro family, with the exception of the main cover and spine titles, which are set in variations of

Grotesque MT, and the above Catalogue-in-Publication data, which is set in Share TechMono.

This edition was created using Adobe Creative Cloud 2014 software, including InDesign, Photoshop, and Illustrator. Work

was performed on an Apple iMac 2009 and a Microsoft Surface Pro. Published by the U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.

First printing, 2015.

Federal Recycling Program.

Printed on recycled paper.

Printed in the United States of America.

This book is intended to provide general guidance for businesses and practitioners in better understanding the basic

concepts of international trade. It is distributed with the understanding that the authors, editors, and publisher are not

engaged in rendering legal, accounting, or other professional services. Where legal or other expert assistance is required,

the services of a competent professional should be sought. This book contains information on exporting that was current

as of the date of publication. While every e?ort has been made to make it as complete and accurate as possible, readers

should be aware that all information that is contained herein is subject to change without notice. export.gov/basicguide

Exported before, but things have changed?

Need answers, but not sure how or where to get them?

This is the book you need.

For more than 70 years, A Basic Guide to Exporting has given companies the information they need to establish and grow their business in international markets. Whether you"re new to exporting or just want to learn the latest ideas and techniques, and whether your product is a good or a service, this new 11th Edition—completely rewritten, revised, and updated—will give you the nuts-and-bolts information you need.

Here are just some of the topics we"ll cover:

(Chapters 3 and 6) (Chapter 2) (Chapter 15) (Chapters 12 and 13) (Chapter 4)

In addition, this book also includes:

Real-life success stories from companies we"ve counseled on exporting

Sample forms and letters

Details on how to get free or low-cost U.S. government export support iii None of the people responsible for this newest 11th Edition of A Basic Guide to Exporting was alive when the rst one came o? the printing press in 1936. At that time and for years after, exporting was dominated by very large companies. That may be why over the next 73 years there were only nine editions—the audience was limited.

Not anymore. More than 40,000 copies of the 10th

Edition and 10th Revised Edition have been printed since 2011. But since then, much has changed on the world economic scene, including a record 300,000 U.S. exporting companies in 2013. This completely updated and rewritten 11th Edition is dedicated to and a practical reference for the thousands of additional companies, mostly small and medium-size, that, in the coming years, will export for the rst time or expand into additional export markets. A new generation of export enablers is responsible for the book you are holding, or are viewing on your mobile device—a technology that wasn"t even science ction in 1936! Among the many contributors to this book are Anand Basu and Antwaun Grin of the senior leadership team of the U.S. Commercial Service, who early on supported the need for a new edition. Budget analyst

Carolyn McNeill made sure commitments were kept.

Making important editorial contributions were Curt Cultice and Roza Pace, a whiz at explaining free trade agreements. Student interns Brian Gerrard and Sara Abu-Odeh kept track of hundreds of text changes and crunched innumerable bits of data for the charts. Credit for the look and feel of the book goes to our designer Jason Scheiner. It was no small feat to integrate all the photos, charts, samples, stories, text pullouts, and changes. He also made sure that the print shop was faithful to the design. This book contains many new facts, gures, and analyses.

Dozens of experts from di?erent government trade

promotion agencies reviewed sections of the book and suggested changes. Special thanks to Jamie Rose of the U.S. Department of the Treasury for coordinating input on the export controls section and to Yuki Fujiyama from the U.S. Department of Commerce"s Oce of Financial and Insurance Industries for expanding the Trade

Finance section.

Our colleague April Miller served as business manager for the project, and her knowledge of how our system works ensured that the book appeared while topics and trends are fresh. Lastly, thanks to Progressive Publishing Services who provided text editing services and the index. Our friends at the Government Printing Oce helped us nd them, then later selected the print shop and arranged for book distribution through their commercial sales program.

To you, the reader, we hope this book challenges

your assumptions about engaging in the world of international business and gives you the condence to become an even greater success. Like the businesspeople featured in the pages that follow, we hope you will not only sell to the world—we hope you"ll help make it a better place.

Doug Barry, Editor

Washington, D.C. • 2015

iv

Table of Contents

Chapter 1: Introduction

The World Is Open for Your Business .........1

Success Story: DeFeet International .................................8

Chapter 2

Developing an Export Strategy ..............11

Sample Outline of an Export Plan ..................................22 Sample Elements of an Export Plan ..............................23 Success Story: Urban Planet Mobile ..............................28

Chapter 3

Developing a Marketing Plan ................31

Success Story: Zeigler Brothers .......................................42

Chapter 4

Export Advice .......................................45 Success Story: Advanced Superabrasives ....................56

Chapter 5

Methods and Channels ..........................59

Choosing a Foreign Representative or Distributor ...70 Success Story: In?nity Air ..................................................72

Chapter 6

Finding Qualied Buyers .......................75

Who Is the "Ideal" International Buyer? ........................83

Chapter 7

Tech Licensing and Joint Ventures ..........85

Success Story: Spancrete Machinery Corporation ....88

Chapter 8

Preparing Your Product for Export .........91

Success Story: Avazzia .......................................................96

Chapter 9

Exporting Services ................................99 Success Story: Home Instead Senior Care .................104

Chapter 10

International Legal Considerations .......107

Intellectual Property ........................................................116

Chapter 11

Going Online: E-Exporting Tools for

Small Businesses .................................121 Success Story: NuStep .....................................................132

Chapter 12

Shipping Your Product .........................135 Success Story: Bassetts Ice Cream Company ............144

Chapter 13

Pricing, Quotations, and Terms .............147

Success Story: Alignment Simple Solutions .............154

Chapter 14

Methods of Payment ............................157 Success Story: Giant Loop ..............................................166

Chapter 15

Financing Export Transactions ..............169

Success Story: Patton Electronics Company .............180

Chapter 16

Business Travel Abroad .........................183 Business Culture Tips........................................................187 Success Story: Lightning Eliminators ..........................190

Chapter 17

Selling Overseas and After-Sales Service ..193

Chapter 18

Rules of Origin for FTAs ........................201 Example Rules of Origin ..................................................207 Success Story: Jet Incorporated ....................................214

Chapter 19

Conclusion ..........................................217

Appendices

A: Glossary of Terms .............................218

B: De?nitions of Abbreviations .............224

C: Free Trade Agreements Chart ............225

D: Forms ..............................................226 Index ..................................................244

About the U.S. Commercial Service .......249

U.S. Commercial Service • A Basic Guide to Exporting

Chapter 1: Introduction

The World Is Open

for Your Business

In this chapter . . .

Selling globally is easier than ever.

More help than ever is available.

Your assumptions may not be accurate.

Transform your business—and yourself.

The World Is Open for Business—Your Business

Today, it"s easier than ever for a company like yours, regardless of size, to sell goods and services

across the globe. Small and medium-sized companies in the United States are exporting more than ever before. In 2013, more than 300,000 small and medium-sized U.S. companies exported to at least one international market—nearly 28 percent more than in 2005, the year in which the

10th Edition of this book was first published. In 2013, the value of goods and services exports was

an impressive $2.28 trillion, nearly a 25 percent increase since 2010. And 2014 topped the previous year, with exports valued at $2.34 trillion.

Additional Reasons to Explore or Expand Exporting

Global trade in goods and services is likely to grow in the future. The new World Trade Agreement on trade facilitation that was introduced at the end of 2013 and renegotiated in 2014 willquotesdbs_dbs8.pdfusesText_14

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