Re-Export or Entrepot trade is a means of importing goods and services from one foreign country and exporting them to another with higher prices or decreased tariffs. Nowadays, with fluctuating trade costs and the high sanctions imposed due to trade conflicts, many foreign businesses practice re-exportation for ease of trade and convenient B2B transactions.
The re-exported goods are exported again in the same state as they were imported from an area that does not involve processing, custom checking and commercialization. These products do not go through any value-added processes thus they are not counted as a nation’s regular exports. For instance, the UAE is involved in the re-exportation of goods to Iran – sending products and services imported from the USA as a way for Iran to circumvent the trade sanctions imposed by the US. None of the goods is processed nor transformed.
WHY DO BUSINESSES NEED TO OPTIMIZE THEMSELVES FOR RE-EXPORTATION?
To act as a re-exporter, your business needs to focus on a number of strategies. One such example is from China. Despite the rapidly scaling China B2B Marketplace, many foreign businesses in the US can’t explicitly trade in the Chinese markets due to trade conflicts and the high tariffs imposed by the US government. This, however, gives an opportunity to many other business companies in the West and the Middle East to act as re-exporters.
If you’re also looking out for such an opportunity, follow the practices below to optimize your business and become proactive in re-exporting activities.
1. CHANGE YOUR MARKETING PLANS
The first step to begin re-exporting is to update your sales and marketing campaigns. You need to clearly explain that you are interested in exporting and importing products from foreign nations. Make it obvious because many investors don’t really notice overseas businesses because of massive competition among China B2B platforms.
2. CHECK YOUR DISTRIBUTION CHANNELS
Before you start, know and identify your markets. If you plan to re-export to nations with free or lower tariffs, you must be aware of the export taxes and regulations within the countries you’d be re-exporting to. In addition, investigate all types of risks such as payment, climate, political and economic in both the places you will be importing from and re-exporting to.
As you explore international opportunities and favourable trade agreements, many potential partners will offer new business structures, joint ventures and trade bargains. Determine each carefully prior to entering the international forum.
3. UPDATE YOUR DIGITAL PLATFORMS
Since digital media is everything nowadays, you must optimize your business websites and update digital platforms in order to stay in the hunt for global opportunities. Expanding to new foreign markets may require websites to be according to the needs and demands of the local people. To do that, create different versions of your website and social media so people from different regions can easily go through and hit you up for any potential trade transactions. You can also register your imported products on many e-commerce platforms, China B2B trade sites and shopping portals to attract a larger customer base.
4. FOLLOW EXPORT REGULATORY RULES
Despite how little your re-export goods are, you still have to follow and comply with the Export regulations worldwide. In most countries, re-export goods aren’t considered as exports since they are not manufactured by the country itself. However, even then, you need to make sure they comply with the international standard and regulations.
5. UNDERSTANDING LOGISTICS AND PACKAGING
When working with foreign partners, it is important to be very particular with logistics and product packaging so you can not only be competitive but also put up a good impression. Although you can’t change the state or refurbish the already imported goods, you can understand and update other requirements like labelling, packaging, documenting etc. Make sure to provide complete export forms and documentation for each product and goods you re-export. For instance, in the past couple of years, Dubai has emerged as one of the major re-exporters for the entire region of Middle East – with importing products from the West and Europe due to the bilateral trade ties and then re-exporting them to the Middle East and South Asian Region.