There are certain difficulties that importers and exporters face compared to those who buy and sell in their own country.
- The Distance
The most important difficulty faced by an exporter (and the one who import from that exporter) is the distance.
Several other problems also may arise when the goods have to be transported to distant countries.
- Difficulty in making payment
Difficulty in payment can arise for many reasons including, the differences in methods of payment preferred by the importer and the exporter, different currencies and even the differences in exchange rates.
Exchange rate changes daily. This makes the payment complicated as the exchange rate would have changed between the time the quotation or invoice has been sent and the time the payment has to be made.
- Different legal systems
Some countries have minimum safety standards. There may be restrictions on the ways in which goods are advertised. There could be laws governing food safety, protection of the consumer and saleable quality. There also could be other legal differences that makes it difficult to import and export. Some regulations are put in place just to make imports more difficult.
- Differences in weights, measures and technical specifications
Many countries use grams and kilograms as the standard measure of weight. However there could still be other countries who use pounds and ounces. Voltage for electrical appliances may differ between countries. Technical specification of products are different in different countries that the manufacturers may have to prepare manuals for each of the country that they want to export the product to.
- language barriers
Even though languages like English are widely spoken, the problem of language differences still do exist. Therefore language specialists such as interpreters may have to be employed. Documents, catalogues, product labels and instructions have to be translated to the language of the country in which the goods have to be sold.
- Differences in customs
Exporters need to have a good understanding of local customs and tastes. For example there are certain types of meat products which are not allowed to certain countries. These things arise from the differences in those customs of the country. Advertising and marketing must be planned to suit the tastes of the overseas customers such that they are not offensive.
- Difficulties in transport
As mentioned earlier, distance is the biggest difficulty faced by the exporters and importers. The more distant the destination is, the more costly and complicated the transport becomes. If the goods need to be transported to a country in the same continent, then road or rail transport can be used. However, if the goods need to reach across continents, other forms of transport like air and sea transport have to be used. Sometimes goods need to be transferred from one form of transport to another before they reach their final destination.
Exporting goods involves a lot of paperwork. Well documentation of secure forms of payments may be required. Licenses need to be obtained for most of the import items, and especially the sensitive materials such as plants and firearms. Export license is also required to take out certain goods from the country.
There are other documents of trade such as bill of lading which must be completed. All these paperwork add to the difficulties involved in international trading
- Problems arising from the importer’s side
Tariffs, quotas and embargoes are used by many countries to restrict trade. There is also the risk of non-payment when the trade is conducted on credit. When the non-payment happens it is difficult to recover debts from the foreign customer.
Other problems such as exchange rate flunctions, risk of political changes and competition also add to the exporters’ worries.