Market, price, and growth: why to import or export

You see opportunities on the Dutch market for a foreign product, you want to grow your business, or there is little demand for your products on your home market. There are lots of reasons that may prompt you to start importing or exporting goods. Three entrepreneurs share their experiences and talk about the challenges they encountered when they embarked on their international adventure. Read this article and find out whether you are looking to start importing or exporting goods for the right reasons.

A survey (in Dutch) by Statistics Netherlands shows that one-third of the 1.3 million independent SMEs in the Netherlands are engaged in international trade. The Central Planning Bureau (CPB, in Dutch) has more information on world trade developments. Doing business with foreign countries remains popular.

Reasons for importing

You can get a better price abroad, you want to expand your product range, or you have spotted a gap in the market. There are lots of reasons why you may want to start importing goods.

Gap in the market

You have found a promising opportunity on the Dutch market. You import a product from abroad and start selling it here. Take hand-woven products, for instance, which are rarely made in the Netherlands, but are sold by countless suppliers in India or Turkey, to name but two examples.

Expanding your product range

Adding new foreign products to your product range gives your customers more choice. The first step is checking whether you are actually allowed to import the goods you have in mind. Most products can be imported without any hassle, but some import restrictions and requirements do apply. On top of that, it is important to take EU and Dutch product requirements into account.

Better price

Engbert Lamberts is the owner of Stepdirect, a company that sells electric scooters. Lamberts turned to foreign suppliers at an early stage. “I figured there was no harm in looking for the product I had in mind on Alibaba, a Chinese online marketplace. After I placed a trial order, the Chinese supplier turned out to have a warehouse in Germany. The products are high-quality, affordable, and compliant with European requirements.”

Limited supply

Noah Ruesen, the owner of Cityfit Supplementen, is a personal trainer and nutrition coach, but he also has an online shop selling nutritional supplements. Ruesen embarked on his importing adventure as part of a quest for eco-friendly packaging for his products. “I found out that the supply in the Netherlands was very limited and none of the packaging options I found were up to par. My company is based in the east of the Netherlands near Germany, and when I went to see what our neighbours had on offer, I found exactly what I was looking for.”

Communication can be a challenge

For Ruesen, communicating with his German supplier was a major obstacle. “My German is downright bad, but I assumed that my supplier would speak English. I was quite taken aback when I discovered that Germans speak little to no English. It really caught me by surprise. Fortunately, I knew someone who speaks German fluently. I asked her to help and she now communicates with my German supplier on my behalf.”

Less red tape

Lamberts is very lucky to have a supplier who already keeps products in stock in Europe, because it means that he does not have to worry about customs. The Chinese supplier has already paid all import duties and VAT. “It means we have to deal with a lot less red tape. If you are responsible for clearing imported products, I would recommend hiring a specialist to make life easier for you.”

Reasons for exporting

You receive an unexpected requisition from abroad, are looking to boost your revenue, or discover that your product is more in demand abroad than in the Netherlands. There are countless opportunities to seize if you decide to start exporting goods.

Unexpected requisition

Out of the blue, you get a requisition from an overseas company who found you online or at a trade fair. You would love to work with them and their spontaneous request makes you think. Perhaps there are more opportunities to be had abroad. The first step is conducting market research. Identify your potential customers and research the competition.

Overcapacity

Your production facility has excess capacity or buying full containers is cheaper. You have more inventory than you can sell in your home market, so you want to start selling all excess products abroad.

Extra revenue

Marcel Kok is the owner of Sunmax, a company that sells heating units and filter pumps for swimming pools. On his shopping site, he mainly sells products to consumers. “There are over 17 million people in the Netherlands, but I realised that of the 11 million Belgians (in Dutch), about 7 million speak Dutch too. Entering the Belgian market looked like an easy way to expand my customer base. The Dutch market is not saturated yet, but who ever said no to extra revenue? My company is based in Limburg, so looking over the border was an obvious choice that did not take long to make.”

Zero chance of survival

In addition to his company Stepdirect, Lamberts is co-owner of Bluecon International BV, which sells compact wastewater treatment units that convert domestic wastewater into irrigation water. Bluecon’s customers are mainly based overseas. Lamberts explains: “Our products are more urgently needed abroad, in countries where water scarcity is a bigger problem. As it happens, we developed our solution with those very countries in mind. The demand for our products is minimal in the Netherlands, so if we only served our home market, our company would have zero chance of survival. Exports are our bread and butter.”

Expanding your market potential

For Kok, it is a big advantage that he can sell his products in other countries as is. “When I realised that I had everything I needed to expand, I cautiously took a look at German-speaking countries,” Kok explains. “My market research showed me that over 80 million people speak German, and I am a fluent German speaker myself. The move to German-speaking countries marked another way to expand my market potential. Danish and Austrian consumers now also buy my products through a German marketplace.”

Local rules

While language was not an obstacle for Kok, he did face other challenges, such as international shipping. “Fortunately, my carrier provided a lot of assistance and made a good offer for shipping within Europe. I chose to outsource shipping to avoid all the desk research involved.” Local regulations were the main obstacle when it came to expanding to Germany. “To find out more about local laws, legislation, and tax rules, I reached out to a German accountant and lawyer, to make sure that I was getting accurate information.”

Patience is rewarded

For Lamberts, the most frustrating part of becoming an exporter was the time it took until he got his first order, which was about two to three years. “Bluecon offers a new product in an existing market, so it took time to persuade our potential customers. Time costs money, and without revenue you can’t run a business. We financed our business ourselves and always estimate that it can take anywhere from 2 to 5 years to establish a presence in a new country.”

Useful tools

Buying and selling products abroad is more complicated than in the Netherlands. The tools below are a great way to get started and gain more insight.