So, How do I Export?And, do I want to?

The topics

How do I decide to export, and what do I need

A real opportunity - Cuba

Michigan Bean Commission

Bob Green-Executive Director

9 Years as Executive Director 25 years trading

The Michigan Bean Commission

100% grower funded Currently about 250,000 acres About $100 Million per year Number 1 in production of

Black Beans Small Red Beans Cranberry Beans

Export every other row

More on Beans

Grow 12 to 16 classes yearly Health Aspects

High in anti-oxidants Have a DGM Food Pyramid

Why the Export Market?

Higher price? Domestic Market flooded? Larger piece of the pie? More margin? Too much production? Time Gap fill in? Excitement?

Do I have the Capabilities?

Computer/email/web Financing Production Time Quality

What do I need to export?

MARKETS!

Where are the markets?

FAS Web site is the first stop

Now What?

You have the countries, how can you find the customers? FAS can help you find the customers List of importers Status of current imports and

origination Define your competitors

Trade Shows

Jamie will address Buyers stopping by, Looking for

you! Not wandering around “in country” Passport/language

Find the right buyers

Meet and Greet Best alternative for any business deal

Understand buyers needs and problems Understand their definition of quality Quality Control

Meet the people/set up rapport Contact information – a must

Make the offer Small aggressive offers

Payment! The Ultimate Goal!

Open Invoice Just what it implies Lots of horror stories! Know your market Take time for buyer to qualify

Some Countries/Regions never qualify Not an immediate way to do business

CAD – Cash Against Documents

Bank Charges Apply – yours and theirs Theory is no cash, no documents, no

containers Banks in some countries seem to not know the

procedures. Is it a bank or someone’s garage?

Doc’s not picked up? Still have bank charges Other charges as well-demurrage and so on. Plus you still have product in wrong place

Letter of Credit

Certainly considered the safest Cost

To open To amend To collect

Descriptions Exact wording Grade certificate/quality certificate (stamp) Safety (Good and Bad News)

Payment in Advance

Best option Hardest to negotiate

Partial payment with balance CAD 50-50 Incentive for buyer to finalize

Basis of Sale?

INCO Terms are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities, and clarify when the ownership of the merchandise takes place. They are used in conjunction with a sales agreement or other method of transacting the sale.

International Chamber of Commerce

FOB

FOB (Free On Board) - The seller has fulfilled his obligation to deliver when goods have passed over the ship’s rail at the named port of shipment. All costs and risks of loss or damage pass to the buyer from that named point.

CFR/C&F/CIF

CFR/CIF (Cost & Freight / Cost Insurance Freight) - This term means in addition to deliver goods onto the vessel, the seller must pay the costs and freight necessary to bring the goods to the nominated port of destination. CIF term – adds the element of insurance where the seller is responsible for above and for obtaining and paying for marine insurance against buyers risk of loss or damage to the goods during carriage.

FAS

FAS (Free Alongside Ship) - (port, after all origin port charges) Title and risk pass to buyer including payment of all transportation and insurance cost once delivered alongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller.

Other things to consider

Shipping time/loading time Booking/receiving containers/truck time to

port/ocean time/port time/truck time to plant Freight

Freight Forwarders Importing Government regulations

Duty/phytosanitary Requirements/NAFTA/CAFTA/

Ocean Marine Insurance General Average

But, What if there is a problem?

Quality: Submit samples prior to shipment Retain Samples Use the knowledge you obtained on

your visit Freight

Delayed Shipment – keep customer informed

Advice of Shipment

REJECTION – Negotiate!

To Expensive to bring home Re-sell

Hard to accomplish How big the discount

Re-clean Expensive

Create a plan Plant notes (mud balls) Ask for buyers permission to call QC Buyers don’t like problems

Two rules for Exporting

Be Cautious

Do your homework

Questions

"You can tell whether a person is clever by his answers. You can tell whether a person is wise by his questions."

Cuba – An opportunity?