Produced by Alibaba.com
Big cost savings, millions of buyers and huge choice are just three reasons why every company, no matter how small, should be doing business worldwide.
Yet Alibaba.co.uk research last year* showed that 80 per cent of small businesses in the UK are failing to embrace the global marketplace, with more than a quarter (26 per cent) considering themselves too small to trade with partners from outside the UK.
If SMEs really want to grow and remain healthy and successful then they need to take advantage of the opportunities available through importing and exporting. While the prospect of buying or selling products with a company on the other side of the world might seem daunting, it is important to remember that global trade is not just for big businesses; small enterprises too should venture outside the UK, and even beyond Europe.
Websites such as Alibaba.com make global trade much easier. The site is a platform for introducing suppliers to buyers, giving businesses access to 20 million factories and manufacturers from around the globe. Whether you are trying to source a specific product or want to find a manufacturer to make a bespoke item for you, searching the site will reveal hundreds of businesses that can help. Customised Sourcing is a facility offered by Alibaba.com to take the details of your requirements and then draw up a shortlist of ideal companies according to your business needs.
For buyers, registering on Alibaba.com opens up their business to a worldwide market. There are thousands of searches every day for millions of different products, so if you register your goods or services with Alibaba.com there is the chance of showcasing your products among buyers who are searching for the things you sell. Recent trade trends figures from Alibaba.com have shown that there is a real appetite for British products from around the world, so there never was a better time to expand your customer base by encouraging buyers worldwide.
SMEs in particular cite many barriers and fears when it comes to trading globally, but while there are certain things to be aware of, the general rules of business apply whether you are dealing with a company in the UK or in China.
Alibaba.com always urges buyers to undertake a certain level of due diligence before embarking upon a business deal. Reverse-telephone look-ups are a good place to start, and it is recommended practice to avoid companies that only use mobile numbers or free email addresses as contact information, due to their disposable nature. You can also look at the factory’s own website.
It might be useful to ask the company for bank information or business certificates. In addition, request the details of some of their other clients to get recommendations and references. You could also get in touch with your embassy in that country as it should have access to a list of registered businesses.
Language and cultural differences are often cited as an area of uncertainty – particularly by SMEs – but in many cases, if a supplier is opening up his business to global trade then English will be spoken to a level that ensures you can communicate effectively. However, if you have concerns or queries, there are plenty of forums visited by businesses that are happy to share their experience and expertise. For instance, the ‘Ask It!’ feature on the Alibaba.com community forum is a useful platform for finding answers to all types of questions.
Even though you might have developed a good working relationship during the buying process, Alibaba.com recommends that you take steps to protect yourself when it comes to paying for or accepting payment for the goods. Never send money direct to the supplier. An escrow system will keep the funds safe while you check that the goods are what you are expecting. If you are happy then funds are released direct to the supplier, while if there are any disputes then the money can be refunded once the goods have been returned. An escrow system can also offer protection to UK suppliers, ensuring that the buyer has made funds available before the shipment is sent.
There is plenty to consider when venturing into doing business with the rest of the world. To help out with the basics, The Knowledge Centre on Alibaba.com holds a breadth of information and advice on trading globally, including setting up an online business, taxes and duties, sourcing from overseas suppliers and safe payment methods. There is also a selection of videos featuring Alibaba.com customers who share their experiences (including the pitfalls and the challenges they faced), which will help and inspire other small and medium-sized businesses like yours to make their ventures a success. Log on to uk.alibaba.com.
* Research conducted on behalf of Alibaba.com by Trends Research on a sample of 1,400 UK small businesses during August 2010.