American manufacturers are looking for ways to identify new customers and increase sales. Manufacturers can tap into new markets and become more profitable by embracing exporting initiatives. The U.S. Department of Commerce’s Export.gov reports that “95 percent of the world’s consumers live outside of the United States,” providing opportunities for manufacturers to become more competitive and support business growth.
Manufacturers who export are realizing the financial benefits. A recent survey conducted by McGladrey Manufacturing and Distribution Monitor, relayed that 60% of exporters found that their company was “thriving and growing”. A separate UPS survey of small and medium-sized exporters reported that “nearly two-thirds (64 percent) of exporters polled saw a financial return within two years.” Furthermore, the study found that “34 percent saw a financial return in less than six months,” and “almost half (49 percent) of respondents said they expect to double their businesses’ exports by 2015.” Additionally, “About two-thirds (66 percent) reported that up to 25 percent of their annual revenue comes directly from exporting.”
While increasing sales is a top priority for many manufacturers, exporting can help businesses in many different ways. Understanding the needs of consumers from different markets can lead to experiences that can ultimately help manufacturers develop new processes, technologies and skills. Engaging with customers overseas also challenges American manufacturers to become more innovative. Working with foreign customers can ultimately help our manufacturers test new methods for producing materials or introduce new product lines.
Although there are numerous benefits from exporting, many manufacturers have yet to realize the advantages. According to an International Trade Administration fact sheet, of America’s 30 million companies, less than 1 percent export, and of those that do, 58% only export to one market.
This may be the case because of the common misconception that only large manufacturers can manage exporting initiatives. This couldn’t be farther from the truth. According to the National Association of Manufacturers, ninety-seven percent of exporters are actually small or mid-sized businesses. Furthermore, Export.gov estimates that more than two-thirds of exporters have fewer than 20 employees.
Exporting also helps narrow the trade gap and improve the U.S. economy. A recent report from The Bureau of Economic Analysis announced that the U.S. goods deficit decreased from May to June. Not only did U.S. exports of goods increase thanks to products like automotive vehicles and industrial supplies, but we also imported fewer goods. Furthermore, The International Trade Administration states that U.S. exports reached a new record of $1.48 trillion in 2011 and exported goods and services accounted for 13.8 percent of our nation’s GDP.
Manufacturers should consider engaging in exporting initiatives today and see their organization:
- Increase sales
- Spark innovation
- Introduce new products
- Develop new processes and technologies
If you are a manufacturer who is interested in learning more about exporting initiatives, MEP has resources available to help. MEP and the U.S. Commercial Service are partnering together to offer the ExporTech program, which helps companies develop and implement an international growth plan. Click here to learn more about the ExporTech program.