How to Export - Identifying Key Factors for Competitive Export Pricing

Ability to supply quality products at competitive price is a key success factor for any supplier. This is more so in international business where competition is not confined within one country or state. When exporters from various countries compete for same product - price, along with quality, play a crucial role in decision making.

Cost, demand and competition are the three key factors that determine final export price. To be successful in international market - you should be able to source or manufacture products at cost that is better than your competitors as sourcing or production cost is one of the most crucial factor in determining export price. Whether you are a manufacturer looking for competitive source of raw materials or merchant exporter - three factors play vital role here

• Sourcing directly from producer, avoiding middleman as much as possible



• Sourcing from geographical pockets that have traditionally excelled in producing export quality products



• Leveraging govt incentives for export, e.g. special export processing zone, cheaper export credit etc.

Sourcing Directly from Producer

One can source almost everything from major cities like Delhi or Mumbai. However, in most cases, these products reach cities from hinterland through layers of middlemen, each of whom add a transaction cost. It is true that middlemen may also add value in terms of un-interrupted supply, consistent quality, low transport cost etc. However, you need to balance this with cost effectiveness of sourcing directly from producer. There is no omnibus solution - one should check various alternatives and take a decision that provides better sourcing cost.

Sourcing from Special Geographical Pockets

There are geographical pockets in India that have traditionally excelled in producing low cost products. Sourcing from such pockets may significantly reduce your sourcing cost. Following is a list of few such pockets

Glass Bangles / Glassware

Firozabad, also called the glass capital of India, is a small town in Uttar Pradesh, 40 km from Agra. This pocket accounts for roughly 70% of the total glass production in the small-scale sector. There is a large agglomeration of small-scale units engaged in the manufacture of hollow wares, decorative items, glass beads, bulbs, headlight covers, bangles, etc.

Glass Beads

Purdalpur, a village near Agra, Uttar Pradesh for North India and Papanaidupet, a village in Andhra Pradesh for South India.

Home Furnishing Products

Handloom and power looms are mainly used to manufacture various home furnishing products like table mats, durries, cushion covers etc. Though these products are manufactured in many states all over India (Maharashtra, Gujarat, Delhi, Tamil Nadu , West Bengal, Rajasthan, Andhra Pradesh, and Karnataka) - two geographical pockets have excelled in production and export of home furnishing products: Karur in Tamilnadu and Panipat in Haryana

Metal Handicraft

Moradabad in Uttar Pradesh, is renowned for brass work and has carved a niche for itself in the handicraft industry. It is believed that the brassware industry originated from Moradabad and spread to the rest of the country. Other geographical pockets of excellence in metal handicraft are Sambhal, Aligarh, Jodhpur, Jaipur, Delhi, Thanjavur, Jagadhari etc.

Wooden Handicraft

Saharanpur, in Uttar Pradesh, is famous for carved wooden handicraft and home of carving in hard sheesham, vice-leaf pattern. The range of designs include floral, geometric and figurative decoration, in addition to the traditional anguri and takai carvings, jali (fretted ornamentation), brass and copper and ivory inlay work. Some of the major products from Saharanpur are boxes, furnitures, candle stands, small utility items and other home decor items. Apart from Saharanpur, other pockets of excellence are Nagina, Hoshiarpur, Srinagar, Amritsar, Jaipur, Jodhpur, Bangalore, Mysore, Berhampur etc.

Hand printed textiles and scarves

Amroha, Jodhpur, Jaipur, Farrukhabad, Bagru and Sanganer

Knitted Fabrics, T-Shirts, Hosiery

Tirupur in Tamilnadu is the largest and best known centre of excellence in knitted fabrics and garments. Other important centre is Punjab and Gujarat

Marble & soft stonecraft

Agra, Tamil Nadu, Baster and Jodhpur

Papier Mache crafts

Kashmir, Jaipur Tamil Nadu and Andhra Pradesh

Terracota

Rajasthan, Tamil Nadu and Baster

Zari & zari goods

Surat, Agra, Varanasi & Amritsar

Imitation jewellery

Delhi, Moradabad, Sambhal, Jaipur and Kohima

Wools and Woolens

The woolen industry in the country is small in size and widely scattered. It is mostly located in Punjab, Haryana, Rajasthan, U.P., Maharashtra and Gujarat. 40% of the woolen units are located in Punjab, 27% in Haryana, 10% in Rajasthan, while the rest of the states account for the remaining 23% of the units.

Jute and Coir

Jute industry is highly concentrated with 59 Jute Mills (out of total 76 in the country) located in West Bengal. Kolkata and Howrah occupy a prominent place for jute and jute products. Kerala in the south is the main centre for coir and coir products.

There are many other centres of excellence in India other than those listed above. Please do your homework to identify centres of excellence near your place.

Identifying Products For Export

What to export ? What sells well in international market ? How to select products for export ? These are questions uppermost in the mind of every budding exporter. Let us examine various options and a practical way of selecting a product basket.

There are products that sell more than others in international market and it's not very difficult to find them from various market research tools. However, such products will invariably have more sellers and consequently more competition and less margin. On the other hand - a niche product may have less competition and higher margin - but there will be far less buyers.

A Practical Approach in Product Selection

Fact of the matter is - all products sell, though in varying degrees and there are positive as well as flip sides in whatever decision you take - popular or niche product.

So, instead of approaching the product selection process from demand side - it is far more practical to look at supply side. Ask yourself - what can you supply. What are your strengths ? How close are you to supply sources. Once you take a stock of your capabilities - evaluate and prioritize available options.

Key Factors in Product Selection

• The product should be manufactured or sourced with consistent standard quality, comparable to your competitors. ISO or equivalent certification helps.


• It should be available in sufficient quantity. If possible, avoid products which are monopoly of one or few suppliers. If you are the manufacturer - make sure sufficient capacity is available in-house or you have the wherewithal to outsource it at short notice. Timely supply is a key success factor in export business.


• It is competitively priced. The price should not fluctuate often - threatening profitability of your export venture.


• Regulatory aspect of export. Check Govt policy - if there is any restriction in its export. Here's a good source for export import policy and hand book of procedure for indian exporters.


• Status of various Govt incentives - such as duty drawback, tax incentives,DEPB etc.


• Import regulation in overseas markets, specially tariff and non-tariff barriers. Though some major non-tariff barriers such as textile quota has been abolished-quite a few tariff and non-tariff barriers exist in European Union and other regions. If your product attracts higher duty in target country - demand obviously falls.


• Registration/Special provision for your products in importing country.This is specially applicable for processed food and beverages, drugs and chemicals. For example - one needs FDA approval for exporting drugs and pharmaceuticals to North American market.


• Seasonal vagaries of selected products. Some products sell in Summer,others in Winter. Some products may sell only during Christmas. Keep in mind seasonal aspect of your product, if there is any, and lead time required to reach target market.


• After Sales Service. If exported product needs after-sales service, you should open service centre beforehand or arrange distributor/agent who can provide servicing facility. It is not advisable to export a product that requires after sales service, in case you lack the technical and financial ability to provide it.


• Packaging and labeling requirements. Keep in mind special requirements of perishable products like processed food.


• Mode of transport, logistics requirements. Special care is required for certain products which may be bulky or fragile or hazardous or perishable or of some such feature.

Retail Chains and Future of Business to Business (B2B) Trade in India

Govt of India has decided to allow 51 percent FDI in retail chains. This will certainly make the sector more attractive to foreign retailers who want a controlling stake in their Indian ventures. Retailers who are comfortable with ownership rather than franchises may look at the Indian market with greater interest.

Entry of large foreign retail chains like Wal-Mart will have profound effect not just on small retailers and Indian retail chains but also on business to business (b2b) trades Introduction of b2b cash-and-carry outlets by Wal-Mart, Metro and possibly other retailers will bring significant changes in large and fragmented Indian supply chain. Middlemen like wholesalers and stockiest will increasingly be under pressure. Where does small and medium manufacturers/exporters stand in this changing scenario ?

What is Cash-and-Carry Scheme ?

Targeted at and open only to business customers - cash and carry scheme focuses on small-wholesale customers who buy in bulk and pay in cash. Unlike hypermarkets where any consumer can walk-in and buy goods, cash-and-carry outlets allow only authenticated bulk buyers to transact business. Medium-sized businesses such as retail stores, hotels, restaurants, caterers, exporters etc can buy from cash-and-carry outlets at prices much cheaper than market rate.

In its original form, owners of cash and carry outlets (i.e. large retail chains) buy from producers directly at very high volume, dispensing with middlemen like wholesalers and stockiest. They also establish their own brands - asking producers to manufacture as per their product and packaging specifications. Volume purchase and removal of middlemen result in substantial cost reduction - a part of which is passed on to b2b customers. So, b2b customers get products of assured quality throughout the year at less than market price.

How Does Cash-and-Carry Outlets Affect your Business ?

Large scale introduction of Cash-and-Carry outlets will definitely affect and influence various players in Indian b2b supply chain. While it may prove to be a boon for business buyers, manufacturers and producers such as small-scale units and agricultural producers' cooperatives which are not big or savvy enough to be able to dictate terms to established supply chains - it may adversely affect wholesalers and other middlemen.

De-layering of Indian distribution system may pose threat to middlemen, many of whom may be rendered redundant in the supply chain. Increase in competition and cost cutting will bring more efficiency in the market place - benefiting businesses.

Where does Small Scale Manufacturers and Exporters Stand ?

Though its too early to predict possible changes - large retail chains may bring new opportunities for Indian manufacturers and exporters While small scale manufacturers may enter into collaboration with retails chains - allowing them the chance to join a modern procurement chain that thrives on efficient suppliers, it may have interesting influence on Indian exporters.

Fragmented and largely un-organized sourcing channels pose a formidable challenge to small and medium exporters in Indian sub continent. Some of the major hurdles in any export transaction are - lack of assured and uniform quality standard, uncertainty about round the year availability and wide fluctuation in market price. Exporters lose lucrative overseas orders because of deficiency in supply chains - factors completely out of their control. Organized supply chains such as Cash-and-Carry outlets may bring new opportunities for small business owners.

Conclusion

Exporters sourcing from organized channels such as Cash-and-Carry outlets will benefit from more predictability in business, reducing inventory levels and competitive price. The resultant cost benefit, if passed on to buyers, can make Indian exports that much competitive

Frauds in Import Export Business - Time to Exercise more Caution

Global economic meltdown has severely strained companies engaged in export import business. Absence of buyers from market is driving many exporters to accept export orders which they otherwise would have declined for lack of prudential norms.

Ironically, this is the time to exercise more caution as fraudsters may exploit present desperation in market to target more exporters with seemingly lucrative deals.

Exporters should be very cautious about certain geographical regions which have become a favorite destination for fraudsters and con artists.

Some may find it sweeping generalization or even unfair treatment - but the fact remains that there is no sign of a decline in scam proposals even after wide publication of Nigerian and other scams.

Worse, the fraudster population seem to be growing everyday with newer and more daring con games. Victims have nowhere to go as there is no law court or policing authority against these fraudsters.

Exporters and importers should be careful of various seemingly lucrative proposals coming from certain regions and countries such as Nigeria, Benin, Togo, Cote' D Ivory etc. and exercise enough caution.

We document here a few scams. Some of these are specific to certain geographic regions - others more universal.

Nigerian Money Offer (419 scam)

This is by far the most popular one - where Nigerian businessman, Bank Manager, Govt Bureaucrat or just about anybody offers huge sums for small help in siphoning money out of their country. We have written many articles on this scam (also called Nigerian 419 scam). One may get an exhaustive list of scams and gain more information on suspect regions at this b2b portal for Indian exporters

Nigerian Oil Fraud (Bony Crude)

Bonny Light oil is a grade of crude oil produced in the Bonny region of Nigeria. Fraudsters present lucrative and legitimate looking offer for this oil. These self-declared oil traders offer to sell as much as 1,000,000 barrels of Bonny Light oil at below market rates. In many cases, they are able to present legitimate trade and shipping documents, acknowledging the seller's oil allocation rights. Buyers who accept these trades are persuaded to provide significant cash fees up front. The charges are normally in the region of $50,000. Fraudsters claim the charges are for anything from agency fees to reassignment charges.

ICC's International Maritime Bureau (IMB) has found that a variety of false supporting documents are being used, all of which allegedly feature the corporate logos of legitimate international companies,such as the Nigerian National Petroleum Corporation.

In the majority of cases seen by the IMB, this forged paperwork includes the following documents:

• Joint Venture Contract Agreement for the Sale and Purchase of Nigerian Crude Oil


• Charter Party; MOU between Nigerian sellers and named buyer


• Master's Receipt of Documents


• Certificate of Authenticity


• Joint Venture Bill of Lading


• Master's Receipt for Samples


• Cargo Manifest


• NNPC Bonny Terminal Certificate of Quantity


• Certificate of Quality.
  

Often these meticulously forged documents name vessels that actually loaded oil cargoes at Bonny. The vessel's stamp and master's name -though not the signature - are often also correct. The genuine cargo, however, is consigned to a completely different party.

Illegal Immigrants Disguised as Buyers or Agents

Fraudsters run illegal immigration racket in the disguise of export import company. They offer to send buyers or agents for negotiation, inspection of manufacturing facility etc. and request official invitation letter from exporter/ manufacturer. Visa, obtained by producing these genuine papers, is then used to send illegal job-seekers.

When in doubt, please check the age and position of the visitor. Very young or low ranking buyers should arouse suspicion. If you receive request for groups of buyers - please check the credibility of the company thoroughly.

Un-Collectable Payment

If you receive Letter of Credit (L/c) from an unknown local bank,be sure to check the bank's credibility. If there are any doubts about its financial condition, it is advisable to request confirmation of the L/C from a reliable bank.

Refusing payment for Remaining Shipment

This is a common trick where the fraudster gains trust of exporter in first part of a deal by making immediate payment by T/T. However, he refuses to pay for second part of the shipment. When working on a T/T basis, there is very little an exporter can do if importer refuses to pay. It pays to remain alert - one successful deal should not change all equations.

Avoid Payment through Changed Identity

Some importers deliberately shut down their existing companies and set up new ones in order to avoid payment, leaving exporters unable to collect money. If your partner suddenly changes his or her company's name and places a big order on credit, it is wise to check the company's legal status on the export contract and shipping documents.

Role of Web-Site in Export Marketing

Exporters, aspiring to use Internet for overseas marketing, must recognize certain basic facts about Internet and orient their marketing drive accordingly. Principles of traditional marketing, though still applies to Internet, needs to be supplemented with intrinsic features of the Web such as its anonymous nature, absence of geographic borders and all round competition. What's considered a cozy niche product in your domestic market, ceases to remain so when exposed to world wide web.

Having good product and competitive price is simply not enough for success in such an environment - your business should also be able to inspire sufficient confidence in customer's mind. In the anonymous world of Internet, where buyer and seller are unlikely to meet each other physically - a professional web-presence goes a long way in establishing your credibility and attract buyers from all over the world.

Without a professional web-presence, you are ill-equipped to survive and grow in overseas markets. Going to battle field without arming yourself sufficiently brings failure and disaster. Imagine how you are going to impress buyers when your competitors with professional web-presence and business e-mail are in a far better position to establish their credibility and communicate in far superior way compared to your free e-mail.Successful Indian exporters realized the virtue of professional web-sites and equipped themselves with some kind of web-presence early on.If you are still not convinced - here's some compelling reasons for your consideration:

Establish Your Identity - Build Trust

Trust is the bedrock of any business transaction. In the anonymous world of Internet where buyer and seller seldom meet face to face -establishing one's identity is the first step towards building mutual trust and confidence. A professionally designed web-site inspires far more confidence than an anonymous (and mostly free) e-mail. With a web-site - you can provide detail information about your company including names, numbers, addresses, and directions for interested customers to get in touch as well as cross check. Besides, one can verify brief details like name, contact address, tel etc. from domain register (WHOIS) or web-host.

Attract Customers from All Over the World

The Internet has no geographic limit - reaching a customer in Canada requires no more effort or resources than reaching a customer in Chile or China. Use this wonderful opportunity to showcase your products to worldwide audience, attract customers from all over the world. Your Internet presence exposes you to far greater number of potential customers - local, regional, nationwide, or worldwide.

What's more - information about your company and product remains available 24 hours a day, 7 days a week. No matter what time of day/night or which corner of globe - anyone can find basic information about your business, or products and get in touch with you. Web-site is not only your global show-case but it remains open 24-hours without your physical presence.

It is Superior - Yet Inexpensive

Web-site is not only a superior way of promoting products, it is far more inexpensive and effective than print or CD publication. Let us compare it with a traditional way of promotion like printed catalog.

Cost of printing a multi-page colorful catalog on quality paper is substantial. On top of that - there's postage and packing costs. Above all - there is a time loss in dispatching printed catalog that may result in opportunity loss as buyer may decide to buy from someone else by the time the catalog arrives. Finally, one can not change content of printed catalog - they are dead as soon as published.

Compare this with web-site - one can have a reasonably good web-site at fraction of cost of printing a 25 page colorful catalog. There's no postage or packing cost and access is instantaneous, so no time or opportunity loss. Maintenance of content is a breeze as you may add new products or update existing ones as many times as you like.

Apart from economy there are many other benefits like business e-mail (sales@yourdomain.com), live chat, auto responders, payment gateway etc. that go with web-sites.

Customer Feedback

Unlike most forms of advertising or promotional material, the web is not a one way street - it is interactive. Your web-site facilitates two way interaction between you and your customer. Customers' Comments, suggestions, feedback etc. are invaluable input to improve your business and customer relations.

Help Your Customer to Locate You

Directories and yellow pages help us to locate suitable vendors. There are enough businesses, organizations, and people now on the web that many people use it as one of their first sources for information. How can you get listed in search directories to be accessible by the public when you don't even have a web page?

Think of the internet as a huge Yellow Pages with no limitation on the size of your advertisement. By investing in a web-site, you are enlisting your company in this global yellow pages and helping your customer to locate you conveniently.

Build Professional Image

A professionally designed web-site is a statement about your company, an excellent communication medium to convey your image. Use this tool to build a positive image about your company that inspires confidence in your customer. Information is a powerful marketing tool. Educate your customer with detail information about why and how they can benefit from using your products and services (whether you want to sell online or not).

Conclusion

Web-sites have emerged as an essential tool for those who wish to use Internet for marketing. Its effective use may decide the extent of your future success. If you have a web-site, explore how to make better use of it. If you do not have one - go for it right away.

Trade Leads - How To Use Them Profitably

Trade leads from Internet is an important aspect of international business and considered an inexpensive way of getting new buyers and consequently export orders. here are many sources onb2b trade leads which readers can easily find through search engines. However, for effective and profitable use of these trade leads, we need to understand who places these leads, why and how to use them for expanding international business.

How Reliable are Trade Leads?

It is important to distinguish between trade lead and export order. Trade leads or 'RFQ' (Request For Quote) are enquirers from unknown buyers published in public bulletin boards or b2b marketplaces r sent directly to suppliers. These are certainly not export orders - though some of these could be converted into firm order after successful negotiation. At the same time, many of these could be of questionable value.So, how do we identify trade leads from serious buyers ? Let us look at these trade leads critically and find out ways of dealing with them profitably.

There are many kinds of trade leads like business opportunities, foreign government tenders etc. For this discussion, we take the most prevalent type of offers in WWW - message placed by private company or individuals to buy or sell a specific product/service within a reasonable period of time.

Who Places Trade Leads ?

Foreign distributors know exactly where to go when they want to buy something for re-sale. Normally, they do not need to post trade leads for sourcing.

Then why such proliferation of trade leads ? How come there are so many thousands of trade leads populating hundreds of trade bulletin boards ? To answer this question - we need to understand effect of Internet on conventional distribution channels.

The advent of Internet has dealt a serious blow to traditional distribution channels, specially in overseas trade. In more specific terms, middlemen are in serious danger of losing substantial business. Earlier, foreign buyers such as retailers had little option but to buy from cal distributors who usually imported the stuff in bulk and supplied to retailers in adjoining areas. For retailers, importing in small quantity from unknown sources was difficult and uneconomic.

Internet has helped buyers and sellers from different countries to interact freely. Retailers can now reach sellers in distant countries, see their products in websites, negotiate a favorable price and buy in small quantity. There is no dearth of exporters who are prepared to sell in small quantity at regular intervals.

This direct buying by retailers at a favorable price, in turn puts pressure in local market and distributors feel hard-pressed to find new suppliers, new products and most important lower price. So, what was once a rather lengthy distribution chain of seller to exporter to importer to wholesaler to buyer, is increasingly losing middle players. It is true that large part of international trade is still dominated by traditional distribution channel, but the trend is towards marginalization of middle men, facilitated by an open medium like Internet.

Then Why this Skepticism ?

Like most other areas in life, reality normally lies in shades of grey rather than in black and white. So, along with serious buyers looking for serious sellers there are sundry others ranging from window shoppers, arm-chair international businessmen to downright fraudsters and conman populating the market. As a result, one can find trade leads posted for variety of reasons such as:

1. Self Advertisement - pure and simple product promotion (seller in the garb of buyer


2. Find market price (usually to put pressure on existing supplier)


3. Find out about competitors


4. Locate alternate or additional suppliers


5. Find suppliers for new product


6. Begin negotiation for a later purchase
   

The Challenge - How to Separate Wheat from Chaff

There is no specific rules - but common sense, observation, care and imagination can help you locate potential leads and manage your time and resources that much better. Following are some tips on this regard based on my experience since 1997:

Find Reliable and Exclusive Sources

If you talk to people who actually sell in foreign markets, they may privately disclose that their best leads are those that they generate themselves, usually by direct mail. It is far easier to cultivate a trade lead into business when they come from exclusive source, not available to million others or displayed in free bulletin boards. The options are clear-either invest in research to locate buyers or take professional help. The days of free commercial information from Internet are over.

Keep a Watch for Competitors

Look for keywords that might indicate the intention - if the guy is gathering information and has no intention to buy. Be suspicious of companies who ask for detailed information about manufacturers' prices but do not identify themselves distributors looking for new lines.

Be Careful of Large Orders

Be cautious of companies who post trade leads for large orders but can not be located easily in company or industry directories. These are often small companies who issue 'RFQ' (request for quote) for large quantities in order to get a lower price. Ultimately, such companies order smaller quantities to 'test' the supplier, making the deal uneconomic for seller.

Observe the Language

Do not be unduly influenced by flowery language or very specific requirement.Do not prejudge a lead - exercise normal precautions necessary in international business.

Check the Market

If you are not a manufacturer and outsource products - be careful of locked market activities. This trade lead will specify a particular product. Your company contacts the manufacturer, only to find out that the manufacturer already has representation in that country and will not sell directly to you for resale as they want to protect their distributor relationship.

Letter of Intent ?

Generally Ignore trade leads offering "letter of intent" or "letter of interest".

Jack of all Trades ?

Generally ignore companies who claim to deal in all commodities traded on world markets such as coffee, sugar, urea, oil and gold. Normally, these are very large deals handled by well established companies in well established markets. Such well established companies usually do not place trade leads in Internet.

Do not Believe in Overnight Success

Be cautious of international business scams designed to separate you from your money. Be suspicious of anybody who prefers phone conversations to written documents. Do not get sucked into fantastic business opportunities which promise to yield huge profits with no risk. Learn which countries and areas have a reputation for spawning international business fraud. Never respond to business opportunities which require you to make wire transfers in advance for receiving goods or services.

Understand the Virtue of Patience

Understand that most foreign distributors do not make fast buying decisions. It is not at all unusual for an initial order to require 9-18 months from the time of the initial solicitation depending upon the cost of the item.

Develop Relationship

Instead of treating the leads as 'export order' with a hit or miss attitude use the opportunity to develop lasting relationship. Understand buyers' requirements and offer solution accordingly. Do not indulge in monologue on your products-make it a dialogue on how both the companies can stand to gain from a mutual understanding.

RSS - A New Way of Attracting Customers to Your Web-Site

Primary purpose of any business web-site is to attract visitors from all over the world and convert a part of them into paying customers. Naturally, every business owner yearns for more visitors for his/her web-site and pays directories, b2b portals, search engine specialists and sundry others to promote their web-sites.

In a word - promotion holds the key to success of any web-site, more so for business web-sites.

Traditionally, search engines have played a key role in attracting targeted visitors (i.e. visitors who are interested in your product/service) and a large part of promotion budget is normally
spent on search engine marketing, be it for organic placement or PPC advertising.

RSS is a new way of promoting a web-site that is not dependent on search engines. It not only helps a web-site attract more targeted visitors from sources other than search engines but also helps concerned web-site in getting high rank in search engine results.

So, you get the best of both worlds by adopting this new technology. And the icing on the cake - RSS is completely free in all its forms.

Brief History and a Warning Note

Ironically, RSS started from a failed venture of Netscape. In the nineties, Netscape introduced "Rich Site Summary' or RSS (version 0.90) as a format for building portals of headlines to mainstream news sites. Being too complicated for everyday use, Netscape later proposed a simpler version (0.91) but subsequently lost all interest and abandoned the project.

RSS (version 0.91) was subsequently taken up by UserLand Software, for developing a foundation for its weblogging products and other web-based software. They named their version of RSS as 'Really Simple Syndication'

In the meantime, a non-commercial group started working on a new version of RSS from the original 0.90 Netscape version and introduced a much simpler format RSS 1.0 This format, based on RDF, was named 'RDF Site Summary."

However, Userland Software decided not to join the non-commercial group's initiative and continued working on their version of RSS (0.92, 0.93, 0.94, and finally 2.0)

So, we have a truly unique situation where two versions of same software are developed by two different groups and what is worse document format created by one version may not be compatible for the other version.

In other words, RSS version 2.0 is not evolved from version 1.0. In reality, they are two different formats ! For more precise information on history of
evolution of RSS and incompatibility issues - please visit
http://diveintomark.org/archives/2004/02/04/incompatible-rss

So, which version of RSS should I use ?

As most RSS readers can read both versions (1 and 2) - perhaps you can use any of them without running into much trouble. However, you should remain aware of this compatibility issue and check your RSS feed using a standard feed validator such as RSS validator

What is RSS ?

RSS is a way of distributing content of a web-site. The content to be distributed in this way requires to be prepared in a special format called xml and the resultant xml-document is called RSS feed. Using RSS feed, one can view a web-site's content and check for new additions without visiting the web-site. RSS feeds can be used to publish great content in your web-site or blog easily.

By the way, xml (short for 'Extensible Markup Language') is a universally accepted format for information exchange. Its no exotic stuff - you are already using another such format called HTML (HyperText Markup Language) in your web-site. To see underlying html coding of any web-page - simply right click your mouse on a any web-page and select 'View Source'.

How Does RSS Help My Business

If you have a product catalog that gets updated regularly or you need to be in touch with your customers through newsletters - RSS is the way to go forward. Tell the world about your products and services by joining RSS feed aggregators, submit your feed to hundreds of RSS directories, make Google, Yahoo, MSN and other search engines take notice of your web-site through RSS feeds, refresh your web-site daily with valuable content from noted publishers by using their RSS feeds - there are many more ways of promoting your web-site through RSS and none of these are dependent on traditional search engines.

What Do I Need to Read RSS Feeds

To read RSS feeds, you need an RSS reader or aggregator. Some Internet browsers such as Firefox or Internet Explorer 7 has built in RSS readers. You can use any of these or decide to install a stand-alone RSS Reader in your desktop. There are many free RSS readers such as Awasu that you can download from Internet and install in your computer.

How Do I Read RSS Feeds from My Computer

Once you have a RSS reader ready - next step is to identify Feeds that are of interest to you and subscribe to them. You can find feeds of your choice using RSS search engines and directories.

To give you an example - let's say you are an exporter of agro commodities and are looking for agro commodity importers from all over the world.

There is one such RSS feed at
Agricultural Commodities - Overseas Buy / Import Offers

Visit this page and you will find a small orange button named 'RSS' towards the top of the page. By the way, www.infobanc.com publishes large amount of information on overseas and Indian buyers, agents, distributors, sellers etc. as RSS feeds. These feeds are updated daily.

Now, click on this button and you will reach RSS Feed for this page. Simple copy the
URL of the RSS feed in your RSS Feed Reader and you are done !

Now, every time you want to find latest import trade leads on Agro Commodities - start your RSS Reader and click on this feed. You need not visit www.infobanc.com anymore.

To gather more information about a particular trade lead - all you need to do is to click on its link and you will reach concerned page of the portal without wasting any time.

How Do I Publish RSS feeds in my web-site

RSS feed is an easy and convenient way of publishing latest information in your web-site, blog or homepage. if you have a blog or homepage in Yahoo!, Google, MSN etc. - you may find ready buttons for publishing the feeds.

If you want to publish useful feeds from outside sources in your web-site, there are primarily two ways doing this - through Javascript or PHP code.

Some portals publish ready code that can be easily copied and pasted in any blank web page. In our earlier example of trade leads from overseas importers of agro commodities, you can find such a code by clicking at 'Publish it' button at
http://www.infobanc.com/trade_leads_ov_buyers/indexp_a1.htm

For portals, where such ready 'publish it' code is not available - You may need some webmaster help.

How To Prepare RSS Feed of my Web Site

This lesson needs some hands on training. I shall show you how to prepare simple RSS feeds for your web-site in next article.

Internet Advertisement Explained : Part 1 - Channels of Internet Advertisement - A Primer

Building a professional web-site is just the first step in your Net marketing program. The next step is to attract customers from all over the world through various advertisement and promotional efforts. Without conscious promotional effort - your perfectly designed and content-rich web-site has as much visibility among millions of web-sites in the World Wide Web as a grain of sand in a sea beach.

Like advertisement in print and television media - Net Advertisement has truly arrived and the sooner you take notice of it, better is your chances of success.

In this article series - we shall identify and explain various channels of Internet advertisement, their comparative merits and demerits, relative cost implication and finally, how to make their best use at minimum budget.

Why Numbers are So Important in Web Marketing

In a retail shop or shopping mall - success depends on three key factors

1. How Many People Visit the establishment daily
2. Out of total daily visitors - how many actually purchase something (i.e. Visitor to Customer conversion ratio)
3. What is the average customer-spending per visit

A web-site - whether selling to bulk buyers or consumers, functions more or less in same way. Its success depends a great deal on the ability to attract interested visitors in large numbers from all over the world and then convert a sizeable percentage of them into paying customers.

While converting a visitor into customer depends a great deal of various on-site and off-site factors - many of which may not be within your control, number of web-site visitors can certainly be increased by reaching out to large sections through various advertisement and promotional channels. That way - one can be assured of good return even at modest conversion ratio.

Search Engine Rank is Important - But Not Everything

Search engines play a critical role in attracting visitors to a web-site. Higher the ranking of a web-site in search engines, better is its prospect of attracting visitors. As a result - there is a mad rush among web-site owners to get higher and higher ranking in search engines. In technical jargon - the act required to get to the top of search engine result without paying any kind of fee to the search engine is called 'organic placement'.

Smart marketing guys would like you to believe that their organic placement skill is so good that they can place any web-site at the top of leading search engines like Yahoo! and Google under popular keywords within days ! My advice to you - take such claims with a pinch of salt (and while you are at it, make that 'pinch' really hefty with lots of pepper thrown in ! )

In reality - your newly created web-site stands almost zero chance of getting to the top of a leading search engine through organic placement within weeks or even months ! We shall discuss the reasons in a separate section.

However, high rank in search engines through organic route is not the only way of attracting visitors - there are many other ways of doing the same.

What are Various Internet Advertising Channels ?

I have compiled below broad categories of Net advertising channels. Some of these are free - others require payment. We shall discuss each of them in subsequent issues

• Search Engine Marketing
• Organic Placement
• Paid Advertisement
• Paid Inclusion
• Site Specific Marketing
• Banner Advertisement
  (Fixed, Pop-Ups and Rotating)
• Performance Oriented
• Impression Based
• Click based
  
• Time Oriented


• E-mail Marketing
• E-Zine Publishing
• Targeted e-mails


• Discussion Boards
  (Networking with peers, helping others)


• Bulletin Boards
  (To post your message - seeking help,
  posting buy, sell and biz ads)


• Ad Swap
• Link Exchange

Conclusion

A mix of free and paid-for advertisements is ideal solution for best result within short time frame. Over reliance on one, at the expense of other, may not get best possible result, specially for newly created web-sites.

How to Drive Away Customers - Features of a Wrongly Designed Website

We all understand value of positive and professional communication in e-commerce. There is no disagreement that communication channels should project a positive and professional image about your company. Your website being a major part of your communication channel, indeed your face to outside world - must project a positive image about your company.

Unfortunately, when it comes to website design many of us forget this simple fact. Instead of being sensitive to customers' concern and need for information, we fall for technology showmanship or other strange considerations. Sad part is - many of us do not even realize how awful or messy our websites actually look !

This week - let us discuss the features of a messy website or 'How to drive away customers and spread negative image about your company'

How to Drive Away Customers

1. Force every visitor to register before they can enter your site. For a thorough and professional job - make them fill out a lengthy form, giving you a lot of detailed information that you will never use. Make every field compulsory.


2. Start your home page with a huge graphic, preferably totally meaningless. However, visitors will never get to know until all of 1 Mb is fully downloaded. Never make it interlaced, do not specify HEIGHT and WIDTH tags, and by all means never use ALT tags.


3. Be really creative on title - make it ambiguous and meaningless like "Home Page," or "Welcome to our Site!!!"


4. Make the home page really cryptic to baffle any Columbus making it through the registration and lengthy graphic download. Avoid simple labels like "Contact Us," "About Us", "Our Catalog," "Services We Offer," "Frequently Asked Questions" etc. Get really imaginative in naming your sections (e.g. "Take Off !", "Buzz the Bean" etc.) "Cool Stuff" is an old standby that still doesn't work.


5. Have a "vision", "mission", "goals" and "objectives" statements. Ensure that these statements reveal nothing about the actual services you offer.

How to Project Negative Image

1. Use lots of continuous text without white spaces around. Sentences should be long and winding. The idea is to make it long and ambiguous to leave every visitor gasping for breath.


2. Pay special attention at spelling and grammatical mistakes. Nothings spreads negative images as much as miss-spelt words and silly grammatical mistakes.


3. Always use lots of exclamation points and, be sure to put commas, where they don't belong!!!!!!!!


4. Page layout is one of the easiest things to do badly on a website. Always use plenty of horizontal rules and bulleted lists. Make columns either narrower than 1" or wider than 4".


5. Never check your pages on different browsers, because what looks dreadful on Netscape might look unacceptably good on Internet Explorer.


6. Remember, you have almost unlimited colours and fonts at your disposal. Use as many of them as you can. Let the world know what a creative guy you are.


7. Always avoid navigational links - let visitors wander around your site aimlessly. Visitors must spend quite some time appreciating your talent before making anything about of the company.


8. Do not care about broken links - visitors anyway will find what they are looking for.


9. Never forget to use flowery Javascripts that slows down pages or display strange messages. Damn the content, you must display your programming prowess !


10. Never use meta tags - search engines may then pick your site leading to more visitors at your site. If you must use meta tags, make sure they are thoroughly confusing and misleading so that search engines either do not touch you or index your site in wrong category.
    

Exporting to Overseas Retailers - Are You Ready ?


Exporting directly to small overseas retailers is a comparatively new phenomenon, brought about by Internet. Selling directly to small US or European retail outlets even 10 years back was an uphill task because of many hurdles like lack of information on buyers, expensive communication media, scant information on overseas consumer interest, difficulty in accepting small payments etc. Trade Fairs and Buying Agents were two major avenues for small and medium exporters.

Internet, acting like a disruptive force, brought about major changes in traditional supply chain of

Exporter > Buying Agent > Importer > Distributor > Stockiest > Retailer

Seamless, easy and inexpensive communication through continents brought exporter and retailer closer, removing many myths and wrong notions. The retailer suddenly discovered how much he/she stand to gain by importing directly because of huge price difference between merchandise of local stockiest and that of exporter's. The exporter found the middlemen disappearing and was too glad to deal directly with buyer.

The phenomenon has been aptly described by many such as Sigurd Helland in Import Your Own Products And Make Your Profit Margin Miles Wider, Online Or Off and Robert Nelson in Importing Made Easy

Today, traditional supply chain is still in use for major chunk of exportable merchandise - but direct transaction between exporters and overseas retailers is growing very fast. Smart exporters have already organized themselves for serving overseas retailers - but Are you ready ? We discuss here what it takes to be successful in this new area of opportunity.

Retailer Buys in Small Quantity

If you plan to address small retailers - forget container load quantities. The business of retail is such that - large purchase can block money and even jeopardize business. The retailer may variously coin order quantity as 'first order' or 'sample order' - but it is very unlikely that he/she will ever order large quantity of one model/product. So, if your business model does not permit small order - retailer is not really your forte. Others may find Minimum Order Quantity a valuable clause in their product catalog.

Orders are More Frequent

Retailer will come back with repeat orders more often than a large importer as he/she can neither afford to maintain large inventory nor can keep rack space empty. Export orders will come as often as consumers demand, such as during Christmas season.

Margins are Higher

Silver line for exporters - you may compensate smaller quantity with higher price. Compared to the price charged by local stockiest - the retailer is unlikely to feel sizeable pinch and may not object to slightly higher price provided you communicate smoothly.

Be Sensitive to Issue of Trust

Importing from overseas country may bring excellent profit, but it is certainly more risky than buying from local distributor or stockiest. The issue of trust will always play on the mind of retailer, specially during first transaction, and he/she is likely to keep the first order as low as possible. The exporter should be sensitive to this concern and negotiate accordingly.

Prefer Air Freight

Most small retailers are not equipped to handle logistics operators and are uncomfortable with long delivery period in sea freight. Air freight, though more expensive, suits retailer's requirements better. However, the retailer may not be aware with these issues, specially the first timers. As exporter, you should quote air freight as much as possible and educate the retailer if necessary.

How to Get Information on Retailers

There are many retailers' associations in USA and Europe. You may contact them for their list of members. Easier option is to contact The Great Indian Bazaar who has compiled a directory of over 2000 overseas retailers (small retail outlets, convenience stores, drop shippers, large retail chains etc).


Conclusion

Exporting to small overseas retailers does not require significant investment and shipment can easily be handled through couriers. As a result, small Indian exporters and those new to export field will find this opportunity very lucrative. Margin from single shipment may not be much - but a handful of active retailers can keep a small to medium exporter busy throughout the year.

E-Commerce - A New Dimension in International Business

Selling in international market is never simple. Diverse languages, geographical distance, cultural difference and lack of market knowledge pose formidable challenge to any manufacturer/exporter. This is more so when buyer and seller interact through as anonymous a medium as Internet. In addition to general knowledge of standard export-import procedure and conventional wisdom, a good understanding of what works and what does not in e-commerce is a key success-factor today.

At the same time - Internet has brought overseas business within reach of average person with no great financial backup. 10 years back - it was uphill task to set-up a successful overseas business because of lack of reliable information on buyers/sellers/agents etc. and high cost of communication. Today, Internet has made it easy to find quality information and communicate at negligible cost.

In summary - Internet offers excellent opportunity for those who are willing to learn fast and think progressively.

What makes you successful in International Business over Internet ? What works in cyberspace and what doesn't ? I shall regularly write in this blog about my experience of helping Indian manufacturers and exporters make best use of Internet opportunity since 1997

Please help me with your comments/suggestion/feedback/bricks/Bouquets ...

Wish you Very Best

VANIK