How to Export Handloom and Cotton Yarns from India
Exporting handloom and cotton yarns to the other countries is very profitable as these products enjoys the demands of high quality and can be produced with environmental friendly material in India.
Nonetheless, the export procedure may not be very easy to manage if one is new to export operation. In this guide, you will learn how to export handloom and cotton yarns from India and various helpful suggestions will be also provided.
Furthermore, we will demonstrate to you how Siomex is your one stop shop for all import/export data that you will need to get the job done efficiently.
Understand the Global Demand
There is no point in exporting your products without researching the market, first and foremost to know where they are popular.
Therefore, since the needs of different countries are not the same, it is important to define what ‘open’ means with regards to online social networks. For instance, the Germany and France are much more interested in organic cotton yarns, while USA and Australia may be more interested in handloom products.
Being aware of your market enables you to provide market demands hence raising the propensity to succeed.
Example: Suppose, you are an exporter operating from Gujarat. This is evident through Siomex data where you find that there is growing demand for organic cotton yarn in Germany.
This knowledge enables you to channel your energy in putting a product on the production line with the view of exporting only that product to Germany, not to serve other markets.
Register Your Business and Get an Export Licence
The following prerequisites should be met before exporting; however, in order for the aim of exporting, you must register your business legally. Such license includes acquiring an Importer Exporter Code (IEC) from the Directorate General of Foreign Trade (DGFT), India.
It is similar to passport in the sense that every person cannot do export or import business if he or she does not possess the IEC.
Steps to Register:
Business Registration: It is a requirement that your business be registered under the legal categories of sole tradership, partnership or private limited company.
Get the IEC Code: You can download the IEC application online from the DGFT website and fill it up. It is a simple process and most of the code orders are delivered within one week.
Example: Assume that you have a small handloom business in Kerala and are conscious about the local problems. The acts of registering your business and obtaining the IEC mean you only can legally export your products thus expand your opportunity to penetrate into the international markets.
Choosing what products to export is not an easy task to do.
When considering exporting there is no doubt that selecting the right products is critical. Handloom and cotton yarns are of some types and their demand is different based on the market availability.
Factors to Consider:
Quality: Consumers in export markets can be demanding regarding the quality of the product that they wish to buy. Be sure all your products are up to these standards.
Pricing: Pricing is an important factor to consider especially in the consideration of Ariston’s major competitor, Bosch. Analyse the data of SSiomex in order to predict the trends of prices in the market, which are relevant for your business.
Packaging: Packaging helps you make sure that your products are delivered in good conditions to the customers or other destinations. It also helps in bringing up a good impression on your buyers.
Example: For argument’s sake, let it be the organic cotton yarn that you are focusing on. In the given case, they could provide high quality yarn that is accepted in the market of the target segment and set the price that would be competitive according to data from SSSiomex to increase the number of buyers.
Find Buyers
Hence, one of the major difficulties in exporting is the identification of credible purchasing counterparts. But the question of where to acquire new clients without the possibility of receiving a fake order and being left with a useless product arises Nevertheless, it is possible to create a network of clients whom you can trust.
Where to Find Buyers:
Trade Fairs and Exhibitions: The next good strategy is to engage in the trade fairs internationally so that you can advertise your products.
Online Platforms: Promote through Siomex, Alibaba, Indiamart, and Global Sources so that you can establish business with prospective customers.
Networking: Approach the local trade associations and the export councils since they supply you with the contact details of the potential buyers.
Example: For example, you could be participating in an international textile fair in Germany; you come across a buyer who would want to import handloom products. Since this connection could involve a long term business relationship the company should embrace this opportunity.
Organize and arrange for movement of supplies
After you have your buyers in place, next is the question of how you are going to deliver your product to them. It includes choosing the right freight forwarder, coming to terms with shipping terms and making sure that your consignment gets to its destination on time.
Steps to Set Up Logistics:Steps to Set Up Logistics:
Choose a Freight Forwarder: A freight forwarder will take any responsibility of moving your items and make sure they get to the required destination.
Understand Incoterms: These are the international trade terms that describe the duties of buyers as well as the sellers. It’s important to know these so as to be able to negotiate the best deals.
Insurance: It is always wise to insure your shipment especially in a situation whereby the shipment is at risk of being lost.
Example: For instance, if you are importing cotton yarn in the USA, you would contact a textile products’ freight forwarding specialist.
They would organize and execute the entire process starting from annexing the next available transport to convey the products from your warehouse to the buyer’s door step.
Complete the Necessary Documentation
Exporting entails various documents, and it is inevitable to make sure that all those documents are filled out correctly. These may include the commercial invoice, the packing list, the bill of lading and the certificate of origin.
All of these have their unique characteristics which will make your shipment legal in India and other countries as well.
Example: In case, if you deal in handloom fabrics and exporting the same to Australia then you are required to attach a certificate of origin of your products showing that the products are made in India. This document is very important to the buyer as it may contain information that may change the amount of import duties to be paid.
Manage Payments and Finances
The cheque maybe on the way and getting paid is after all the ultimate goal. Payments can actually be more complicated in export transactions than in domestic transactions so the management of payments should be well considered.
Payment Methods:
Letter of Credit (LC): This is safe to the payment since the buyer’s bank provides guarantee to the payment.
Advance Payment: This decreases your exposure level because rather than wait for the final payment you receive a certain percentage upfront.
Open Account: This method is however more risky but is usually applied where the buyer has been established from time to time. This is where the buyer is responsible to make the payment after he has received the goods.
Example: In the first export transactions an LC may be preferred in order to be assured to get paid when the goods are shipped. As you work on the relationship with your buyers, you may opt to work on open account terms.
Import Export data: avoiding competition.
Generally in competition the key to competitiveness is to continuously gather trend data and information. Information about the import-export trade presented on the Website can give adequate information for making reasonable decisions. When you analyze such data you are able to find new opportunities, determine pricing mechanisms or even carry out a competitor analysis.
Example: This article can be adapted with changes of saying for instance, you observe by using SSiomex data that there is growing market of organic cotton yarn in South America. The quick action will ensure that you penetrate this market before any of your competitors have done it.
Develop long term relationships with the buyers
Exporting is therefore not a process of making a onetime sale but a long term business of selling goods to customers. Speaking of trust, giving an actual product’s quality, delivering on time, and regularly reporting on the process are critical components to develop more sales.
Example: Suppose you have a buyer in Japan to whom you have given a satisfactory handloom product. It will help you establish communication with them and by providing them new product lines you can expect this buyer to order from you more frequently.
Conclusion
The selling of handloom and cotton yarns from India is a very viable business opportunity provided it is done systematically.
By comprehending your marketing environment, identifying the target buyers, organizing transportation and employing data from Siomex, one is able to develop export business.
So always bear in mind having proper preparation for the specifications and quality products as well as developing good relationship with the buyers. Implementation of these strategies will enable a business become a successful exporter in the export market.