In an increasingly global world, the advantages of international trade can give your business a substantial boost.
According to Abhi Golhar, serial entrepreneur and co-founder of Nurse Practitioners Clinical Rotations, chief among the advantages of international trade are market-risk diversification and less competition.
“If there happen to be increasing regulations in the business owner's home country that may inhibit the sale of the business's widgets, identifying other markets with less regulation could be vital for the longevity of the business," Golhar says. “Also, the business owner may find that by expanding into a different market, there may be fewer competitors, which can result in higher profit margins and more business volume."
Added to the advantages of international trade are lower production costs.
"Business owners should consider international trade when the cost of labor or products they can source locally negatively impacts their bottom line," says Scott Kacmarski, CEO of business process outsourcing company Reps Direct.
Additionally, becoming proficient in international trade in the early stages of your business can help you avoid prohibitively high costs down the line—another perk of expanding globally.
“The cost of one product or service may seem like a small issue at the beginning," Kacmarski says. “The problem comes when you have many products or employees. High costs then lead to cash-flow problems, and it's harder to go international once your business is more mature and operating at a larger scale."
International Trade Has Its Downside
Of course, there are disadvantages of international trade as well.
For one, if you don't have what Golhar calls “boots on the ground," it could increase your probability of failure.
“When my father opened a business in his hometown in India, his brother—who he trusted completely—assisted him," he says. "Without a partner with an established track record and contacts, international trade can be enormously difficult."
To read more, check out the full piece on the AMEX OPENForum.
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