Typical Problems International Traders Face

Typical Problems International Traders Face

Typical Problems International Traders Face

Venturing into international trading is never an easy thing. When you talk about bringing your business to the global stage, you speak of dealing with people from a different culture which intrinsically have a unique set of beliefs or otherwise similar to yours. Although money is a “religion” which people across the globe understand, there are some elements in international trade that make the process less simple as rooted in the disparity between legal norms.

But while legality is one thing in business, politics is not the sole reason why international business is rough for many, if not all. Yet, there are also other factors at play that makes the process of making trades more complicated than it could be.

Here are the most common problems which international traders face that add friction to their business:

 

Location and Transport

A business will not be considered “global” by scope if it does not go overseas. Whether it is a country next to yours or from a faraway place, an international business is always concerned on a few critical areas, namely the geography and the transport of goods towards the location.

But although there are now a handful of means by which the goods are safely transported from one destination to the next wherever in the globe, there are also underlying issues in this matter that is truly a concern to the exporter, like the prevailing norm to the target locations and the risk of losing the cargo at any point in the delivery process.

To offset these latent problems, it is always wise to make due research to learn about your new target market and adjust your business plan accordingly while also making sure that your goods are insured in whatever troubles it may face, either on sea or on air.

Payment Process

When dealing with customers from far-flung places, having the right method of conducting financial transactions is very important. By tapping with today’s available technology, cashless payments should already be at the core of your business.

Considering that each country has its own currency and whose value may be more or less than others, digital transactions make for a boon in international business where easy conversions are made without fault.

Language Barrier

In business, trust is everything. But trust is that fickle thing that is not easily formed, especially between two people who speak two different languages. Although many people nowadays have grown accustomed to speaking English as a vernacular in business, that is mostly in the formal sense and may not necessarily apply at the local scene. If you want to foster trust with your target market, you must learn how to communicate using their language.

 

The Right Importer to Deal Business With

The process of exporting products to another country is not a one-way thing where you, as an exporter, just simply send out goods to an intended country and it will just be received by whoever and let its distribution go to the market. It does not really work that way.

When there is an exporter—which is you, for example—there also has to be an importer, too, who basically handles the goods you sent for sales and distribution.

Yet, while it may sound so simple, finding the right person to do proper business with you is not always easy. In any undergoing which involves money, there are potential scammers who are dishonest enough to take away money from other people. Otherwise, they may simply be ineffective in the trade they ought to be doing.

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20 Comments

  1. Vivien Elaine A. Gavieta

    For a venturer to survive and stand out in the international business arena, it has to be fit in all aspects to the standards of the global market and be able to cope with the trend of times.

    With the growing popularity of Negrenses in the field of business, being labeled as the “sugarland” and Philippines’ major sugar producer, it is not impossible that it can possess dominion in the international business realm. From Negros Occidental’s famous “piaya” to “puto bongbong” and all sweets you can name, from the rise of organic farming to emergence of BPO industries within the province, Negros has so much strength to offer.

    However, it is not exempted with the barriers that every business has to hurdle in its venture towards internationalization. First consideration is: Will the Negros businessmen and their products be able to suit the “interests” of people from all walks of life, in the whole world? Second, Do the Negrense traders possess the financial means to conduct research on the varying attitudes of the global market and be able to align their products with the given varying tastes and preferences? Third, How much would be the marketability rate of the negrense products? Does it have what it takes to have the “global market appeal” and be “preferable” than all its other global competitors? Will the import/export expenses, including the compliance efforts and costs to the legalities of every country, be worth it in the end? Lastly, with the fast changing world, is Negros ready to patch up with the technological innovation?

    If we’d go through the specific of the specifics, the list would go a long way. Nevertheless, with the Land of Sugar being consistently stable in the national economy for years, coupled with sweet and hardworking people behind its success, we would not be surprised one day if province’s famous label will be changed from “Country’s sugar capital” into “World’s land of sweets.”

  2. Ma. Carmela Joy D. Alegada

    As been presented doing international trade is never easy as they require an ample need of trust, the right choice of person to deal business with, the patience to wait and the courage to take the risk. As a Negrense there are difficulties that we may encounter as we pursue our goal of international trading. The era of technology is flourishing right now and the ways and means of product transport and cashless payment arises but we are yet to face and realize this continuing process of urbanization. Negros is a province that has a rich heritage and natural resources but we are not yet ready to go urban since we still have cities and municipalities that are still stuck with the rural living and with that doing international trade can’t be realized. In order to address this there should be a joint initiative with the local government and those local entrepreneurs to update their means and ways in doing business and inject an innovative trend in their products. We can’t be just stuck with the old ways, we need to step up and be aware of the current trends in order to compete globally.

  3. Geiczar Ross D. Real

    Negrenses rely to the ports of Iloilo to export the best quality sugars of the province. To address such, I believe Negros will be more competitive if it has its own international port where we can ship and receive goods immediately from the international market. Aside from this, Negros have a trend where most of the farmers’ children don’t already have an interest on agriculture and this makes it more difficult to obtain manpower to harvest all those crops. Mentioning those, it will result to price increase and lower productivity.

  4. Rodolfo A. Song

    Negros failed on the issues of industrial ization program.Industrial development had not performed as well as the other sectors of the economy. Many of our neighbors with farless natural resources than Negrosa marched steadily forward in industrial development.There is no reason why we cannot keep pace with them. We can address this problem by accelerating the implementation of our major Industrial projects,develop and organize export promotion effort,hardened the rationalization of our industry and let’s give the best assurances to our farmers to our farmers investors exporters to continue and encourage to invest in foreign investment.with this new development strategy we are determine d to carve out our rightful place in the world of business.The government must accelerate the economic growth through increasing public investment,improve agricultural performance,by offering big incentives to farmers,expand irrigation and other inputs. Economic and social progress can be attributed to a number of factors, political stability, general strong commitments to development, a large increase in our investment levels high priority given to agriculture and export sectors. Increase the international trading and last but not least strictly impose a sound and pragmatic economic management.

  5. betsy mariz demontano natavio

    The other concern that Filipino business people need to address is choosing the right people. Having a business internationally may require them to hire local people. Employee is one of the best assets of a company or a business. Due to cultural differences, it may be hard to choose the right people to represent the company or the business itself.
    The government may offer low interest loans to small businesses in the local market.
    Another way to help and protect local businesses is to impose high tariffs to imported goods. They must also have close monitoring to the employees and strengthen their campaign in combating corruption in Customs.

  6. betsy mariz demontano natavio

    Negrenses may have a hard time in exporting the goods to another country considering the location and transport. Negros itself does not have international airport and seaport. The cost of transporting the goods from one location to another is very costly. There is also a high risk of damaging and losing the goods during transit. What they have to do is to partner with trusted couriers to make sure that the goods are in safe hands and it will be delivered on time. They may also need to partner with other local businessmen that are into exporting and they may come up with bulk delivery. In that way, the freight and tariffs will be lessen and will be divided at the same time. Another issue is the payment process. Negrenses may have to fully adapt the technology for cashless transaction. Language barrier is another issue that may encounter by negrenses when going into international business. Although we may be good in speaking English, other countries may not still be fluent with it. Negrenses must hire the locals of that specific country that is knowledgeable enough about the culture and can speak the language. Another concern would be taking the risk to trust someone with the goods being imported and handles the distribution of the products. They must coordinate with agencies like Export Marketing Bureau to check and to make sure that the person you are dealing with are legal and legit.

  7. Ma. Lourdes B. Navarosa

    Negrense Producers faces issues on packaging and product quality improvements and tough competition in the global market. Competitors who had state of the art marketing scheme and packaging were on its edge. Negrense Producers, especially exporters has to further improve their products quality and a need to innovate its packaging – for it is noted that packaging is one of the major challenges for entrepreneurs. We have good products but still there is a need to be improved compared to other foreign entrepreneurs. Negrense Entrepreneurs particularly need to consider improvement on the packaging designs, kind of materials being used and make it more enticing to the buyers both in local and global target markets.

    Our government agency specifically the Department of Trade and Industry (DTI) including Department of Agriculture (DA) has to consistently do or provide something i.e. training or any assistance to the local entrepreneurs or producers on packaging and others– specifically to those who are in the export arena for the improvement of the product packaging to equip producers to be globally competitive. Joining International Food Expo (Ifex) with the support from the government of Negros will be a big boost to Negrense Producers.

  8. Gekka Kaye Eusebio

    1. On my own opinion, given the common the problems presented, the issue that Negrense are facing is the person dealing their trade. I have talked to one Negrense who will going to have his outward remittance for payment is that they need to investigate first the Company they are dealing with and if they have friends in that country they are asking favors to check if it is really legit. As what he said, today’s trading trust is a big word and that losing money for nothing is regretful. In addition commuting to other traders is also an issue, considering the time difference and the language barriers that some traders misinterprets what you mean to say. The government should coordinate with the traders and helped them investigate if the person that the traders are dealing with is not a scammer or not taking advantage of them.

  9. Mirriam Dickinson

    The pointers on articles helps a lot to those who plan to venture their business abroad and go international. I fully agree on whom you do business with. Language barriers is very important when dealing with other nationalities. I think Filipinos can really do well in exporting their business if they are well-versed enough with the diversityof people of that specific country, their culture and practices, and the government itself. Taken for example our local Bong Bong’s piaya. They just started joining in a fare trade in UAE and now you can see their products in a local shops as well as hypermarkets and supermarkets. I think its because of the population of Filipinos living in UAE. But even so, if you do not have a solid case study on your business on how to be known internationally. You wont be able to expand your business globally.

  10. Claudine Faith Ignacio

    International trading is a transaction between two different countries. It allows businesses to expand not just locally but also globally. It is an opportunity to grow wherein your products will also be known in international setting. When going global you have the opportunity to innovate more about your products offered so that may people will patronize and will use it. You have to make sure that your products can compete well in the market. Importing and exporting of consumer goods is one of the best example of international trading and most of the businesses are already engaged in this type of business venture. If there are benefits or advantages in international trading there are also disadvantages. Here are some of the issues when doing business abroad:
    1.Legal differences – every countries have different rules and regulations that should be followed. It is important to apply those legalities, on how those products should be taxed in a certain country so that you can operate your business well.
    2.Currency exchange – this is one of the issues to be considered also because exchange rate is not stable and it is changing all the time. It is important to create a long term planning and budgeting.
    3.Local competition – being aware of your competitors so that you can create a marketing strategy to compete globally. Connect with the people who have the knowledge and expertise so that it can be more easier to expand in global aspects.

  11. Gene Claude Mapa

    Negrense people have also the ability to do business abroad. Some business men and even small entrepreneurs have undergone training in aspects of international trade. But when dealing with global transactions, negrense also faces different types of problems. Because of the differences in trade partterns and business policies among countries, restrictions and constraints is imposed on exportation or importation of goods. Another problem is the strict regulatory measures, foreign exchange rate volatility and higher tariffs and taxes being paid which is very costly for Negrense people. Some entrepreneurs also lack knowledge in handling new and recent equipment which is very useful in the production of their raw materials.
    To address the issues mentioned above, I think the provincial government should give focus and boost the international trade agreements with other countries. They should support even small, medium and micro enterprises by allocating enough funds for training and capitalization. This is a great investment since it will attract foreign investors which will be beneficial to the province of Negros.

  12. Joe Salvador Mercado

    Erratum.
    1. Given the common problems presented, what do you think are the specific issues Negrenses face when doing business abroad? How can we address this?
    Basing from the post, the first issue that needs to be addressed as soon as possible is language barrier. Although English is the second language for us Filipinos, and we are good at it, it’s not all the time that other countries in which we want to do business with is good at it as well. Learning the language of the country, custom, tradition and culture is a must when doing business.
    We Filipinos can adapt to the change of culture drastically, we are one of the most flexible people in the world, but we need to be on our best when it comes to flexibility especially when we do business.

    Another issue that needs be addressed is the right importer to deal business with. Trust is not easily earned, getting the right person at the right job at the right time is as hard as finding a needle in the hay stack. So, before we get contract or deal with the person or company, research first and get as many options as you can, that way you can choose the best person to have a deal with.

  13. Joe Salvador Mercado

    1. Given the common problems presented, what do you think are the specific issues Negrenses face when doing business abroad? How can we address this?
    Basing from the post, the first issue that needs to be addressed as soon as possible is language barrier. Although English is the second language for us Filipinos, and we are good at it, it’s not all the time that other countries in which we want to do business with is good at it as well. Learning the language of the country, custom, tradition and culture is a must when doing business.
    We Filipinos can adapt to the change of culture drastically, we are one of the most flexible people in the world, but we need to be on our best when it comes to flexibility especially when we do business.

  14. Joshua Japitana

    It had been long proven that our ancient ancestors had been in trading relationship with our neighboring countries which started a very long time ago. It allowed us to be able to enjoy the products and things that are not native here in our country. It allowed us to establish relationship with other people, learn their language and eventually, their culture.

    Nowadays, trading is very much different compared to what we have before. We have to follow certain rules and regulations so we can trade seemlessly with different countries.

    Below are the specific problems i think negrense faces when doing business abroad:

    1. Lack of Financial Assistance from Our Government
    -For us to be able to go global, we have to ensure that we have enough capitalization. If only government can provide and grant loans at the lowest interest rate possible, our exporters will have a better chance of reaching the global settings.

    2.Proper Training and Seminar
    -Our government should equip our exporters with proper skills and training so they would know how to deal with other countries. This way, they have a better chance of surviving the global market.

  15. According to this blog, typical problems international traders face drift among location that specifically draw issues on geography and the transport of goods to the target market, payment process which requires digital transactions through cashless payments availability, language barrier that shall help establish trust between the exporter and importer, and choosing the right partner to deal business with especially with matters that involve money. With these common problems presented, I think Negrenses that do business business abroad specifically face the problem of location and transport which is a result of Philippines as an archipelago. Before the product arrives to the target market, it goes through various sea or air transportation which is vital in doing international trade that can compromise the quality of the product. Hence, this can be addressed by Negrenses that enter international export shall carefully research, study and analyze the factors pertaining to such in order to guarantee that goods shall be delivered as it is in whatever circumstance it may go through along the process of transporting.

  16. Nadia Diana S. Casas

    The specific issues that Negrenses facing when doing business abroad are the payment processing this is generic for the entire term for expenses on the operation of a particular business, and it is also the basic need. When you’re planning to having a business abroad it is safe to have secured big amount of bucks. This essentially ensures you have the capacity to pay out bills all throughout from the need of manufacturing such as manpower, resources and delivery to taxes and other fees for exporting required when having such since other countries’ currencies has highest money value. Another issue is the location and transport, this may sometimes cause delayed for deliveries and product damages because of this you have to reproduce new sets of products,monitor areas of delivery and its efficiency.
    In order to avoid difficulties when doing business abroad, is that you have to secure your capacity on paying of bills, and your consistency of paying those. Step by step try to expand business nationally. Selling of products specially with a fame of its name already in it is a big advantage that other locals would dare to buy it.

  17. Pearl Joy Ortiz

    i think the specific issues Negrenses face aside from the problems mentioned in the article is the huge tariff and export fees. most countries have different kinds of fees charged on goods coming into their country. Thus, making your product more expensive and less desirable/competitive than domestic products in their country. In short, if your product price is high, consumer consumption will reduced, the smaller your profit is. The emergence of cheaper China products are also a threat to Negrenses business because they are penetrating the global market nowadays. In addition, Negrenses also faced with very strict and difficult customs procedure in our country.

    Government should review unnecessary domestic regulations about export procedures. Make strategies for regulatory reforms about trade and export in the country.The DTI should collaborate with other sectors or organizations like Philexport and Export Development Council to help exporters diversify new products to new market. Identify and develop capable products for global demand. Address export competitiveness by harnessing potential goods and services for the Philippines to attain comparative advantage.

  18. Jonathan Reeve B. Miranda

    Business is difficult to manage when you do not have enough knowledge about the business itself and the location where it is established. Many business fails to last long. It is because they don’t have enough preparation to research and study about the business they will build.
    The issues of most business people especially the Negrenses face when doing business abroad for me are; the exportation of the product are too expensive than the original price because of the tariffs or taxes the government charge for every product to enter in their territory. Laws of the country or state also is one of the issue since Negrenses are not familiar to what legal and illegal things to their place. Getting permits to a business is also difficult to other countries especially if you are not a resident of the country. Adopting and locating what or who you will market is also a must. People don’t have enough idea of the product that they are selling and you have to adjust your styles or taste of your product according to what religion or place you are dealing with.

  19. Jackie Lou A. Lasola

    First, the language barrier, yes Filipinos specifically the Negrenses are good in English however, there are many countries around the world who doesn’t know how to speak English. Dealing with this kind of problem should any parties bring with them a good interpreter to speak well on their behalf or study first the language of the specific country you’re planning to deal business with.
    Second, culture differences. Bringing business in the global is one of the toughest decision you will ever made. A culture shock of course the Negrenses will be facing at first. Culture differences will vary from one country to another. Learning, understanding, and adopting the culture of the country should be fully embraced.
    Third, aside from the mentioned above, going global has many areas to consider, the following are; transportation of the products, payment process, trust, laws, rules and regulations and politics. Before entering into the global business do a thorough research, more inquiries, and study first of the areas mentioned above.

  20. Jholina B. Indac

    A major challenge in doing business business globally is to adopt excellently differences between each other culture.Such adaptation to language religion, beliefs, way of living and culture. Making your business globally as a high risk on other hand a big achievement also to the company. Thus, it should still take into respect language barriers as well as different attitudes.
    As part of company’s vision-mission to be the top and globally competence, it must prepared and understand the cultural ways in propagating business worldwide. To offer a universally competent business and to satisfy customers.
    While navigating those all prospects cross-cultural differences of country’s, its a big challenge to all of us the impact and risk to our business but all of those challenges through familiarization, sensitivity, openness to make everyone lives easier.

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