Small and midsized exporters want to know on which new export markets they should focus. Until now the best approach available was to look at indictors such as GDP, tariff and non-tariff barriers, political risk and so forth. For exporters who like data and aren’t intimidated by online data tools offered by the federal government, there are data available on what countries historically purchase from the U.S.
Thanks to advances in big data analytics and government’s so far limited use of them, exporters now have a more sophisticated tool to hone in on best markets for specific products. Named Market Diversification, this tool supports a favorite goal of past presidential administrations to get smaller U.S. companies to increase the number of countries they sell to. Historically, the majority of small business exporters sell to only one market, typically Canada, which is geographically close and relatively easy to deliver products to the buyer. So, imagine the impact on employment and bottom lines if U.S. companies can, say, double markets served from one to two!
It is a great reason to celebrate moves by the government that help exporters.
What’s different about Market Diversification is that it scores potential markets based on a number of factors. Instead of dealing in generalities, there is now some quantitative rigor behind selecting markets to enter. And even if the tool does nothing more than validate hunches or less rigorous forms of analyses, the knowledge that a lot of data have been crunched on your behalf should be reassuring.
The first thing you should do is go to the Department of Commerce trade promotion website and the new section devoted to the tool. https://beta.trade.gov/marketdiversification . Here you’ll enter your Harmonized Code Number, a string of digits that represent in general terms the product you are selling. The Code is used worldwide, in part to help customs officials to know what’s in the shipping box, track what comes in and to apply the appropriate tariff to the value stated on the shipping documents. Here’s an online tool for finding your HS codes if you don’t know them or if you do but want to double-check. https://hts.usitc.gov
In addition to adding your HS Code Number, Market Diversification will ask what other countries you export to. This enables the algorithm to determine whether there are similar markets you should be considering. You can filter results by region of the world, specific country, or you can choose to see all of the results worldwide. Eleven factors are involved in the analysis and include:
You will end up with a numerical score. The higher the number, the more suitable your product is for that specific market. One interesting feature is the purported ability of the tool to spot markets that are underperforming as importers of this product compared to other similar country markets. By crunching these numbers, the tool calculates the underperforming in percentage terms. If the number is 1o percent, one way to view it is to conclude that based on the information available, this market could be importing more. While it doesn’t answer the why or how questions, it does suggest a potential market for you and suggests questions to ask during additional research.
Indeed, the government authorities encourage users of this tool to view it as but one means to get a fuller picture of where you might concentrate your resources. We’re not quite yet where we can ask Siri to tell where the best markets are for our products. But we’re getting closer.
Enjoy this blog and want more insight on global trade? Check out the WebPort Global blog at https://www.webportglobal.com/Blog-Community/International-Trade-and-Global-Business
If you want more information on how WPG can help your business grow & go global contact Stephanie Misar at email@example.com for more information.
Northern Virginia Chamber of Commerce Applauds Amazon’s Decision to Locate Second Headquarters in Northern Virginia
President and CEO, Northern Virginia Chamber of Commerce
Last week, Amazon announced that it will locate a portion of its second headquarters – “HQ2” – in Northern Virginia, bringing tens of thousands of additional jobs to the region over the next decade. 238 North American cities and regions responded to Amazon’s HQ2 RFP, and our region, along with New York, was selected. This is something we should be extremely proud of as a region.
In January 2018, Amazon selected twenty finalist regions, including Northern Virginia. Among its requirements, Amazon noted its desire to locate HQ2 in a major metropolitan area with access to a talented workforce, a robust transportation network with an international airport, and a stable, business-friendly environment.
HQ2 represents the culmination of Northern Virginia’s unprecedented transformation over the course of a generation. That Amazon selected Northern Virginia over many other strong options reemphasizes what makes our region a premier business destination – world-class, highly-educated, diverse talent, robust infrastructure, and a positive business climate at the local, state, and regional level. We are excited to welcome Amazon’s extraordinary investment of resources, innovation, and talent to our region – these contributions will certainly serve as the catalyst for Northern Virginia’s next great chapter.
As we welcome Amazon’s new investment in our community, we, the business community must continue to advocate to address our regional challenges and opportunities. The ability for our region to grow or attract the next Amazon is dependent on our continued ability to recruit and retain talent, move people efficiently, build our entrepreneurial ecosystem, and enhance our quality of life. With your support and leadership, your Chamber will continue to be the place where the business leadership of the region will convene, engage with one another, and build the platform that will support our region’s long term prosperity.
As we already know, Northern Virginia’s business community is second to none. The Northern Virginia Chamber is proud to represent and serve those businesses that contribute to our thriving region. I am excited for what’s to come for our business community and for Northern Virginia.