|← Offshoring in the United States||Free Trade Hurts the World →|
A pitfall is an unexpected, unforeseen or surprising difficulty. A pitfall in exporting means an unexpected difficulty that arises in exporting. It surprises the exporters and they are normally unprepared for the unforeseen difficulties during exportation. These pitfalls are normally considerable whether with paperwork, culture or detailed preparation.
The major difficulties that companies participating in exportation face may include: lack of enough information about the country where the products get exported to (Johnson and Bade, 2010). The company may have enough information of what gets expected from them and may fail to deliver goods and services that are required by the foreign country they are exporting to.
Market entry barriers of the host country are also pitfalls in exporting. Foreign factories may not understand the customs, regulations and practices which get expected of them in a new country. This may make people extremely apprehensive of their products. Often the correct ways of manufacturing and marketing together with proper documentation is extremely crucial to avoid exporting pitfalls.
Foreign factories also have difficulties exploiting due to the competition at home. When products of a foreign country arrive in the export destination, people normally would like to associate it with the company they know from the foreign country (Johnson and Bade, 2010). This makes it difficult to market products from a different foreign factory. People do not receive your product well because they feel that what you provide is not the best that country has to offer.
Foreign factories do not take their time to learn the foreign market and policies before they decide to begin exportation. They do not prepare people who will communicate, so as to ease the process of buying and selling. Most foreign factories do not even take time to market their products in the foreign countries prior to exploitation. They meet very many unforeseen difficulties during their exportation endeavors. This is because they concentrate more on making the product than marketing it.
A good example of a foreign factory that may have pitfalls in exportation can be a factory that decides to make electric cars to sell in other countries without looking at the viability of those cars in the foreign countries. Some say that export pitfalls catch the ill prepared and to an unusually large extent this may be true (Johnson and Bade, 2010). Export pitfalls can be avoided by proper research of the foreign markets.