Exporting goods from Australia can significantly increase your turnover and profits as you expand into new, international markets. Although there are challenges with international trade and exports, there’s plenty of guidance and support available if you know where to look. Our introductory guide will help you understand what you’re getting into, and link to some of the best resources to help your expansion plans go smoothly.
Understand if you have the time, energy and resources to start exporting
Exporting to an international market can be difficult. There are lots of areas you’ll need to consider, regulations you’ll need to follow and costs you’ll need to pay. It’s vital that you and your business has the capacity, commitment, expertise and resources to pursue exporting outside Australia.
Some areas to think about:
- Australian rules and regulations on export.
- Rules on import, tariffs and taxes for the country you’re exporting to.
- The costs of exporting – Logistics, shipping, freight handling, travel, insurance and more.
- The division of responsibility between you and any importers.
- Market research to understand demand in another country.
- Costs of modifying products for the new market.
- Planning all the areas you’ll need to cover for export.
If you don’t have the expertise yourself, it’s essential to hire people who do. They will be able to guide you through the challenges of international expansion. You can also look at hiring a specialist export agency that can handle some of the complexities on your behalf.
There’s a very helpful “Export Readiness Indicator” tool that you can use to find out if you’re ready to export, and identify any gaps in your current business you’ll need to plug before international expansion.
Put the time and management expertise in place to deal with exporting
The challenges of exporting will take your attention away from your domestic operations. Make sure you’ve got people in place that can handle the existing side of the business while you focus on the new export market. Ideally, you should have strong domestic sales and an expert business operations team in place before you start looking at exporting.
Make sure you’re financially prepared for exporting goods
Exporting goods can challenge the financial reserves in your business. Make sure you’ve got enough money in the bank to cover all of your domestic operations and keep everything running smoothly. Separate out your export budget into another area so you won’t need to touch the money you need for your regular business operations.
Understand that exporting is a great way to build your business, turnover and profits
Even though exporting can be challenging, it’s one of the best ways to grow your business and your profits. Research shows that businesses with an international market are more profitable than those who only cater to Australian customers.
Explore and use all the resources available to you
AusTrade was setup by the Australian government to give Australian businesses access to all the knowledge, support and resources they need to get ready to export goods. There’s a wealth of information available on AusTrade’s website including downloadable guides, tools and resources so you can cover all the essential areas. These include:
- Getting ready for export.
- Creating an export strategy.
- Carrying out market research.
- How to market when you’re exporting.
- Pricing your exports.
- Dealing with freight and logistics.
- And much more..
The information in these guides is excellent, and you should spend time studying them in detail so you can understand the various nuances of international trade.
Understand the support that’s available
In addition to providing training and guides, AusTrade also has a number of trade services that can help you. These include:
- Information and advice on doing business internationally including marketing briefs, cultural tips, local commercial practices, strategy, marketing, promotion and more.
- Tailored services including specific market and country research, partner and customer profiling and identification and market introductions.
- Referrals to specialist service providers in Australia and oversea covering areas like lead generation, laws, accounting, financial services, networking and industry specialists.
Understand the taxes and tariffs you’ll need to pay
- You won’t normally need to pay Goods and Services Tax to the Australian authorities on exports out of the country.
- You may need to pay other processing fees for exporting goods.
- You will typically need to pay import duty, customs fees, and other taxes when you import into another country. There’s lots of great information on the main international markets here.
Learn about prohibited and restricted exports
The Australian authorities do restrict or prevent some types of goods from being exported. These include some biological materials, some chemicals, some animal and plant species, weapons, pharmaceuticals, and more. You can find a complete list here. It’s also important to understand the rules around quarantine. You should also learn what Australian Customs needs from you if you want to export.
Find out about financial assistance
The Australian government is keen to help businesses expand overseas. To achieve this, they have several incentive schemes to help you get financial assistance:
- Export market development grants – These are special grants that can be provided to certain exporters once they start exporting and for up to eight years after that. Find out if you can apply and what you can claim.
- State, territory and other assistance for Australian exporters.
- Efic – Finance for Australian exporters – This is a loan system backed by the Australian government to give small and medium sized businesses access to money to fund international expansion. You can apply here.
Exporting internationally doesn’t have to be daunting, as long as you know what you’re getting into. Please do read through all of the guides, understand the support that’s available to you, ask questions, and hire the right people to move your business forward. Expanding into international markets can be very lucrative as long as you have the right guidance and management.
Receiving payment from overseas customers: Foreign Exchange for Exporters
If you have overseas customers who are paying you in foreign currency, the exchange rate you receive could be eating away at your profit margins.
Consider using the TransferWise Borderless Account.
Until recently, Australian businesses had 3 options to receive money from overseas customers:
- Get paid into a local Australian based, Australian dollar account.
- Open a Foreign Currency Account, usually with a bank
- Use a payment gateway like PayPal, Braintree or Stripe
Unfortunately, these options are usually filled with fees, balance requirements or massive exchange rate mark-ups.
In October 2017, TransferWise released the Borderless account in Australia and it's really impressive. It allows you to receive, hold and transfer 27 different currencies.
The unique feature though, which is particuarly useful for businesses, is the ability to have local bank account details in USD, EUR, GBP or AUD. This makes receiving money from customer abroad, exceptionally ease.
Please note: All information is accurate as of October 2017, but rules, regulations and charges can change. Please check the websites and agencies listed in this post for the most up-to-date details. This covers most common ways of sending money. it doesn't cover EVERY single method of payment. Some, but not all of the companies mentioned are affiliated with The Currency Shop. If you choose to use any of these companies, we may receive a referral fee.
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