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Trading with the USA: A Beginners Guide

By: Dave Howell - Updated: 18 Aug 2010 | comments*Discuss
 
Trading With The Usa: A Beginners Guide

Outside of the European Union, the USA is the next largest commercial market your business could begin trading with. One of the main advantages of trading with the USA is the diversity of markets within the country. If your business is selling specialised products or services, you are sure to find a ready market within the USA.

To succeed in the USA your business must plan carefully. The commitment of time and financial resources should not be underestimated. Breaking into the USA can take some time as unknown products and especially new brands will require lengthy marketing periods as well as sometimes complex logistical set ups.

The USA and E-Commerce

Many businesses especially smaller enterprises choose to use the Internet as their first attempt at trading their goods with the USA. The relative ease with which a website can now be built means E-commerce is a cost effective way to test a new market within the USA. If these overseas sales are encouraging, a more direct approach can be made within the markets in the USA once your business is sure customer exist for your products or services.

Marketing in the USA

Testing a new product or service you believe will fit with the market in the USA should be your first port of call when developing an overseas trading strategy for the US market. Visiting trade shows as a customer and then as an exhibitor is a great way to carry out market research. Consult the Trade Show Week Data Book as this is a directory of all the trade shows taking place in the USA. Your local Business Link will be able to help you source a copy, or visit the British American Website.

Because of the sheer size of the USA, most businesses that want to enter that market for the first time focus on just one, or a select few states. This enables your business to better understand the consumers in those areas and tailor your marketing to effectively reach them.

Regulations Within the USA

Trading with the USA will mean that your business must be doubly sure that the goods that it sells are fit for purpose. It is essential that your enterprise pays close attention to the product liability laws that exist in the USA as they are extremely strict. As in the UK all products are expected to meet all current safety standards. Regulations exist about product labelling, safety, price and build quality.

Consult your legal advisers about protecting your business against any product liability claims. It is also important to have in place warranties for your products that can be expanded to include sales in the USA. The USA office of UK Trade & Investment can advise your business on how to handle liability when trading with the USA.

Customs and Duty

All of the goods that you export to the USA will have customs duty attached to them. The US Customs Service is the equivalent of the HMRC in the UK. It is important to thoroughly understand the customs duty processes within the USA on all goods you are selling to ensure your business doesn’t pay too much duty.

Just as across Europe, the USA also has a Tariff that classifies goods for customs duty purposes call the Harmonized Tariff Schedule of the United States (HTSUS). The HMRC can help you ensure your goods are correctly classified before export. A customs broker can be well worth their fees as they not only understand the import system into the USA, they also have a good working relationship with customs officials that can help with faster customs clearance of your goods.

Business Partners and Agents

One highly effective way for your business to start trading with the USA is to find an American distributor. Working with a partner that is based in the USA has a number of distinct advantages that include:

  • The distributor knows their market and customers
  • Their brand is credible within the USA
  • Customs clearance and duty can be handled efficiently
  • Legal issues and financial arrangements can be completed within the USA saving time and money

Foreign Currency Exchange

Trading with the USA will mean your business will be exposed to the fluctuations in the exchange rate. Imports into the USA will always be converted to US dollars so it may be an advantage to when selling to the USA to have all transactions in dollars and at an agreed exchange rate.

Logistics and Infrastructure

As you would expect within the most industrialised country in the world, the infrastructure of the USA is highly developed. It is unlikely that your business will have any issues shipping goods to any location within the USA. However, you must not take this for granted. It is always advisable to check that your business does not have to make any special arrangements to reach a specific destination.

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