How to Become an Exporter Guideline

How to Become an Exporter Guideline

The export trade is governed by both national and International rules and regulations. In other words, it covers a large distance of lands and it involves divergent socio-economic conditions and rules that prevail in the various trading countries.

Thus the decision to enter in an export market should be taken after a careful assessment of the advantages and disadvantages to be had. To be an effective exporter, one should critically take a look and make assessment of one’s company based on the following points:

I. Internal Company Assessment:

By this one can diagnosis the readiness of the company and the product to the targeted market destination.  List of factors are:

  1. The commitment thereto of the top-level management;
  2. Adequate managerial and qualified staff;
  3. Skilled and experienced personnel to handle the various aspects of exportation;
  4. Sufficient production capacity-that is adequate factory space, warehousing, machinery, and accessibility to raw materials.
  5. Adequate financial resources to purchase capital equipment and spare parts, raw materials to as well as working capital
  6. Ability to produce and adopt products with real export potential using cost-effective methods, and
  7. Ability to provide after-sales services in the importing country, if required.

II. Foreign Market Assessment:

After the internal assessment is done; the potential exporter has to embark on a market research, before taking any steps.

The purpose of making market research is to identify the marketing opportunities and constraints abroad, as well as the prospective buyers of the export product. In this step market information is gathered and analyzed critically, to get and determine which foreign markets have the best potential for one’s product.

In general the following outputs are expected to be reached in the critical marketing assessment step:

  1. The largest and most promising markets for its product;
  2. The fastest growing markets for the product;
  3. The trends and outlook of these markets; and
  4. The practices of these markets and of the other exporting companies of the product with which the company has to compete.

Market Research generally consists of two elements: desk research and field research.

I. Desk Research

This is the initial step that involves collecting and analyzing the data available from local sources: such as, chamber of commerce, and sectorial associations, the National Bank of Ethiopia and the Ministry of Trade and Industry.


II. Field Research

This research used to test the findings of your desk research and to meet with key potential customers, agents and distributers.

In this step the following core points should be addressed in satisfactory level.

  • Screening potential markets:  involves obtain export statistics that indicate the most common export products, from the Ethiopian Revenues and Customs Authority and the Central Statistical Authority, and identify five-to-ten large and fast growing markets for the firm’s product. Asses the history of these market during the economic recession. Then identify   smaller and fast-emerging markets that may provide ground-floor opportunities also with fewer competitors than there is in established markets.  Then targets three-to-five of the most statistically promising markets for further assessment and consult the Ministry of Trade and Industry, the National Bank of Ethiopia, the CSA, business associates, freight forwarders and others to further evaluate targeted markets.
  • Assessing Targeted Markets:  examine the trends for your company’s product as well as related products; calculate the overall consumption of the product and the amount accounted for by imports. Ascertain the sources of competition, including the extent of the production of the domestic industry and the major foreign countries with which the firm is competing in each targeted market by using competitive assessment and ISA’s (Industry Sector Analysis).
  • Drawing conclusion:  after the analysis conclusion will be made about the product type, the potential export markets, and other details. It is recommended to have fewer than 10 export markets.

The following general informations should be assessed by the exporter as well;

  • Use of Trade Intermediaries:  the distribution network should be studied carefully and before one embarks on exporting.
  • General Information: geographical area, location, population defined by race, religion, income, age, and sex, languages, major commercials’ and industrial regions and centers, the average educational level of the targeted country/ies.
  • Form and Nature of Government: the responsibility of central and regional governments, political attitude towards Ethiopia, economic and social policies, etc.
  • General marketing Factors: general marketing conditions, consumers’ tastes and preferences, trends in competition, price quotations and payment terms, the standards used, the weight and measures, the advertising and publicity media, the leading import houses, the main shipping air links, the pertinent government ministries and departments, the pricing structure of products, free trade zones, trade fairs an exhibitions and list of potential distributers and agents.
  • Economic indicators: the national currency and the stability of exchange rate, and import export statistics.
  • Banking infrastructure: the number, types and competency of the banks, and import and export statistics.
  • Transport and communication: the main ports and facilities, shipping services, airports, freight services, inland transport routes, and the condition of the roads.
  • Data in foreign trade: total trade, main imports, main exports and trade with Ethiopia, in terms of both value and volume.
  • Market access: general import policy, membership in a customs union or in any other free-trade area, special trade relations.
  • Importing licensing: categories, basis of allocation and procedures.
  • Import tariffs: rates, basis of assessment, surcharges and other taxes.
  • Special customs provision: entry regulations and procedures, free ports and bonded warehouses, and samples advertising and postage packages.
  • Other factors: foreign exchange controls, repartition of profits and convertibility of currency, food health, safety and quarantine requirements, marketing, packaging and labeling regulations, and shipping and other required documents.

III. Product and Market selection

  • Product selection: in product selection stage assessing company’s profile domestically is helpful to start a step in other similar countries. Another means is identifying unique feature of one’s product, that are hard to duplicate abroad, then at this point it is likely to win the export market. In general finding a competitive advantage in the targeted foreign markets.
  • Market Selection: initially it is recommended to focus on two markets and gradually expand, selected with good potential in terms of size and purchasing power; also recommended to choose market that offers preferential access to Ethiopian products, start with accessible markets is good. Accessible in terms of distance and transportation. Consider political and peace situation of the country.

IV. Establish and Maintain contacts with Foreign markets

  • To establish new contacts and to maintain them activities like, participating in trade fairs and exhibitions, visiting the targeted market, contact and use Agent/Distributer Service (ADS), sourcing international buyers by using international directories, trade information etc.

V. Source of Market Information

  • Many Institutions are established in Ethiopia with the aim of giving services to the exporters and traders like, Chamber of Commerce and Sectoral Associations, Business Development Services (BDS), the Export Facilitation and Incentives Directorate of the Ministry of Trade and Industry and others.
  • Their respective websites are
  • There are also different websites and electronic sources, that gives information about market and even international prices at international and national level.

Address

Ethiopian Pulses, Oil Seeds and Spices Processors and Exporters Association (EPOSPEA)

Tel: +251 11 662 35 45

Fax: +251 11 662 35 04

Mob: +251 914 70 33 34

E-mail: epospea@gmail.com, epospeajossy@gmail.com

Website: www.epospeaeth.org

Office address; Haile Gebereslassie Avenue, 22 mazoria
Rebecca building next to Axum Hotel
7th floor room # 703

Monday the 23rd. Ethiopian Pulses, Oilseeds and Spices Processors Exporters Association
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