On 12 July 2022, the Euro became worth one ‘Greenback’. The last time that happened was two decades before – on 6 December 2002 to be precise. The Pound Sterling has also declined markedly against the mighty US Dollar in recent months. On the face of it, it’s bad news: companies and consumers located in the UK or European Union will find they are paying more for imported American-made goods.
Yet for exporters of goods and services to the USA, this could be very good news. The strengthening of the Dollar puts more foreign currency in the hands of the American buyer. That means they can buy more of your stuff. Your goods and services have become ever more competitive pricewise against domestic incumbents. If you have been hesitating about selling to the USA, it may be the ideal time to take a look.
Doing your homework to research opportunities in the 50 States is a crucial first step in building an international business. You don’t have to do it alone. Your own government has a department dedicated to encouraging export sales, such as the UK’s Department for International Trade (DIT) [Department for International Trade - GOV.UK (www.gov.uk)]. Not only does it have reams of market data available to search, but it has market experts on its staff with knowledge of sectors ranging from food and drink to information and communications technology, from aerospace to agricultural machinery. You can learn a
lot from studying reports and talking with subject matter experts. When you have done this desk research, it is appropriate to plan a field trip. Helpfully, DITs arrange trade missions for specific industries, and they can also help with the cost of exhibiting at many trade shows in their national pavilions.
What you are looking to establish is the size of the opportunity, the fit for your product or service, the structure of the market with regard to competition and channels and their impact on costs and pricing, any regulatory and compliance issues, and as much as you can learn about prospective buyers – whether they are B2B, B2C or D2C.
Exchange rates matter in international trade. There’s certainly a lot of technical detail to consider, but a weak Pound or Euro may be just the moment for you to think bigger and to examine the opportunities for you in the USA. But do your homework first.
-- Lindsay Powell
Commentaires