Trading internationally can open up additional revenue streams; however it is not without its potential pitfalls.

Trading internationally can open up additional revenue streams; however it is not without its potential pitfalls. At Creditsafe we understand these challenges having been founded in 1997, and grown to have offices in 10 countries, ultimately becoming the world’s most used provider of company credit reports.

Through this expansion we have learned some very interesting lessons and would like to share these with you through our Top Ten Tips for International Trading:

  • Always credit check potential international customers and suppliers and check their credit rating. As you are new to a country and culture, always check a company’s credit report before you deal with them. A credit rating is an overall score representing the company’s creditworthiness. Make sure it’s high enough to do business with.
  • Understand the culture. Make sure you understand the culture and religion of the country before you start marketing your product/services. They may have different guidelines or beliefs to the UK, such as Germany for example. Germany is very strict on not allowing newsletter marketing and you could end up with a hefty fine if you do this. Take time to understand the rules and regulations before distributing your marketing material.
  • Understand the currency and tax regulations. Make sure you know what the currency exchange rate is before you set your prices. Also be aware that tax is different in every country.
  • Check group structure of potential traders. By checking group structure and what other companies are under the corporate umbrella you can see how big the organisation is as a whole.
  • Don’t underestimate the cost of shipping. If you are planning to ship your products overseas from your home country, don’t underestimate the cost of shipping. Price how much it would cost you to ship before advertising a price for shipment to your customers.
  • BForm relationships. When you do start to trade overseas make sure to make solid relationships with your customers, suppliers, traders and shippers. You can never have too many good relationships.
  • Check director’s information. A Creditsafe international credit report will hold information on the Directors, Shareholders and Secretaries of a company and how long they have held that position. The report will also show you what other companies that director is or has been linked with.
  • Check their enquiries trend. You can see how many times a company’s credit report has been viewed over the past 12 months. If there are a lot of views at a certain time you could check their media reputation at the time and see if there is a reason for this.
  • Monitor their payment behaviour. One of the most important things to take note of on a credit report is a company’s payment behaviour. If they are late payers or can’t afford to pay their bills it could affect your business if they consistently pay you late or not at all. Monitor their payment behaviour over the previous 6 months on a Creditsafe report and decide whether their payment habits are suitable for your company.
  • Trade Payment Data. Being part of Creditsafe’s Trade Payment Data Programme you have the ability to see real life payment behaviour of real companies, whilst also sharing your own customer’s payment data. It will highlight good and bad payers for companies to see not only the big corporate brands but also smaller companies.

To minimise the risks of trading abroad contact Creditsafe today on 02920 886500 or visit www.creditsafeuk.com.