For small companies looking to expand their market, exports can be an appealing way to go. According to Swiss Federal Statistical Office, Swiss companies exported goods worth approximately 312 billion francs last year. “The most popular country to export to is Germany,” says Henrique Schneider, Deputy Director of the Swiss Trade Association. “For one thing, this is due to its geographical proximity, but also due to the linguistic and cultural ties.” In addition to the UK, France and Italy, other top-ranking countries that Switzerland exports to also include the USA and China. “I advise small companies in particular to focus on one or two markets.” This is because the work involved at the beginning should not be underestimated. Any company looking to export should ask themselves the following four questions.
Going international: some start-up help for small companies looking to export
With the right product, small companies can also acquire new customers abroad. But what do small companies need to bear in mind if they are looking to export their products? Henrique Schneider from the Swiss Trade Association has the answers.
Small companies should ask themselves the following questions if they are planning to develop an export business:
Why: what are my reasons?
What: what products/services do I want to sell?
Where: what markets do I want to sell the products to?
Who: who are my target customers, and how can I find them?
What with: what resources (funds, staff) will I use on exports?
How: what is the best way to go about distribution?
When: when do I want to reach my export goal?
How much: what sort of volumes am I looking to sell?
Question 1: Is my product suitable for my preferred target country?
“Just because a product sells well in Switzerland, that doesn’t mean there will be demand for it in another country,” says Schneider. What’s more, people often have very different ideas, and not just about price and quality. “I know one company that wanted to sell LEDs to Senegal. The owner reasoned that this was a good idea because of the long lifespan of LED bulbs. But the person on the other end was not interested in this aspect at all. For her, LEDs were an innovation, and that was just what she wanted to hear. It initially never occurred to the owner to emphasize this aspect because this technology was well established in Switzerland.” This is why it is very important you really familiarize yourself with your target market.
Question 2: Can I export my product to my preferred target country?
Despite open markets and free trade agreements, exports to certain countries may in fact not be allowed, for instance due to security policy. You also have to think about problematic products such as chemicals, military products and dual-use goods. “Goods like this are problematic because there is potential for them to be used in weapons,” explains Schneider. “These products require authorization from the State Secretariat for Economic Affairs (SECO)”. It is also important to clarify what the import provisions are for the country in question. “In South American countries, for instance, production often has to be completed in the country itself.” If this is the case, a company will have to find a production partner. And remember: individual provinces, regions or federal states will often have their own rules on top of national provisions.
Question 3: How do I go about selling my product to my preferred target country?
“Ideally a company will have contacts in the target country who can help you to gain a foothold there,” explains Schneider. “Trade fairs are also a big help.” They can be a good entry point, even if they’re better for gauging the market than actually selling anything. A company that exports directly will have less work to do, which in turn means lower costs and actual face-to-face contact with the customer. You usually don’t have this with an intermediary. With an intermediary, you have a local expert who is familiar with the local market. However, their expertise and connections will not come for free. “Given the complexity of the food declaration process, I would be more inclined to recommend a partner. With that said, I do know one small Swiss food processing company that exports its goods to China completely independently.” Ultimately, whether it’s better to export your product independently or with a distribution partner will depend more on the company than the product itself.
Question 4: How do I go about transporting my product to my preferred target country?
How you transport the product will depend on what that product is. Some products are easy to send by post, whereas others require a haulier. “I’d personally get a logistics company on board,” suggests Schneider. “They will know the requirements for a given country, and can take care of customs duties if needed – something that tends to be a very complicated process.” You can, of course, take care of this process yourself as well. Exports need to be cleared with Swiss customs. Export duties and VAT are not charged for exporting goods, but almost all countries charge import duties, and many also charge VAT. You then have transport costs on top of these charges. “Within the European Union, these costs are straightforward.” But there is no getting around the need for a bit of arithmetic beforehand.
If it’s your first time exporting products, it is a very good idea to use a haulier. They will be familiar with all the procedures, and will know what to bear in mind. You can also get useful information on exports from the Federal Customs Administration, the State Secretariat for Economic Affairs (SECO), Swiss Post , trade associations or the relevant chamber of commerce.
About our expert
Economist Henrique Schneider is the Deputy Director of the The link will open in a new window Swiss Trade Association (SGV), where he is responsible for economic policy, energy and environmental matters.