DIFFICULTIES FACED BY EXPORTERS:

• Distance: The distance involved in transporting goods from one country to another country is greater than in domestic trade. Air transport and sea transport have to be arranged. Overseas representatives also may have to be appointed. There are charter agents available at the Baltic Exchange who find ships for goods and goods for ships.
• Language Differences: Every country speaks a different language. Communications with overseas traders have to be carefully translated. Publicity material and instructions have to be prepared in many languages. Hence translators have to be found. Exporters can contact the Central Office of Information where information of translators is available.
• Cultural Differences and Local Requirements: Every country follows a different culture and requires various goods. Market research has to be carried out. This is quite difficult and expensive. The services of the Department of Trade and Industry can be sought in this case.
• Technical Differences: Different governments may have different technical specifications for goods sold in their country. An exporter of electrical goods, dealing with several countries has to produce the goods according to the required specification of each country.
• Trade Barriers: Tariffs and quotas are a considerable obstacle to trade. Tariffs are taxes levied on imports and quotas are a limit imposed on imported goods. These increase the price of goods that are imported. These barriers can be overcome by exporting to countries where the tariffs are low and where there are no quotas.
• Customs Regulations: All goods exported and imported have to go through customs regulations. This creates more work for the exporter.
• Documentation: Documents used in international trade are more complex than those used in domestic trade. Handing over the work to a freight forwarder can solve these problems.
• Payment: This is a big problem faced by exporters. Every country uses a different currency. So currency must be exchanged in the foreign exchange market. The problem of the changing exchange rate comes into existence. Exporters can make future dealings to overcome this problem.
• Insurance: The risks involved in foreign trade are more than the risks in domestic trade. So insurance has to be taken out. The Department of Trade and Industry and Lloyds of London can overcome these problems.
• Risk of Non-Payment: The importer may not pay the exporter for the following reasons:

o   because he does not want to pay.

o   because he becomes insolvent.

o   because payment is prevented by the importer’s government.

o   because of war.

o   because the import license has been cancelled by the government.

            This causes a big problem for the exporter and can be solved by taking out a Comprehensive policy at the Export Credit Guarantee Department.