Import-export business nowadays has dramatically changed as Coronavirus hit us. Purchase orders are hanging and market demand is falling. An alternative that we can quickly think of – is diversifying our suppliers and markets. What if there’s another virus coming? Is that strategy sustainable? In the midst of crisis like this, how can we turn it into opportunity?
In this article, you’ll be able to know more about your company by identifying its weaknesses and strength. It’s like a simplified SWOT analysis, but here, our focus is to discuss the principle to mitigate the ongoing disruption – and craft a resistance strategy for alike catastrophe.
Originated from Wuhan, China – Coronavirus has infected more than 100 countries in less than three months. Modern supply chain has never been disrupted like this before. Flights are cancelled, vessel sailing emptied, conferences skipped, even workplaces are vacated, streets unfilled, tourist spots are locked – as a result, businesses around the world lost trillions of dollars in revenue, that shakes up to global economy.
The worst part, thousands have been mourning on the lives taken by the virus. So, here’s …
11 Simple Strategies to Fire Up Your Import-Export Business Amid Coronavirus (and onwards)
A vaccine or antiviral for covid-19 is still unknown, and probably it would take more than a year in research, according to health professionals. Thus, it draws more uncertainties in supply chains globally..
But, one thing is certain – Coronavirus taught us how to become more resilient in business and in health. To do this, start with:
1. Set more humanized culture
Employees are more important than cash flow – especially health emergency cases like Coronavirus. Companies that could operate during the outbreak are those with sound team.
People need to shop for food, medicine, personal care and all of those basic stuffs, and while they’re in crowded places they are highly-prone to infection. So, it would be wise to designate a team to handle people’s basic needs.
Today, public transportation is definitely dangerous. In fact, more flights are cancelled every day as part of an effort to contain the virus around the world. How about employee’s commute? It may be time to assess in setting-up a shuttle for employees.
In the years ahead, building an employee village is a way more sustainable. A housing with grocery store, recreational and sports areas. Procter & Gamble demonstrated this humanized culture with cash advances for their employees and families as they built employee village, after the Hurricane Katrina in 2005, an article from Harvard Business Review mentioned.
This way, our team is more protected, provided with basic needs – thus able to perform their job and intact after the outbreak. The best part, companies would earn employee’s loyalty.
2. Maximize workforce potential
Remote working is very common these days. And it just became default to most of companies as Coronavirus steamed worlwide. The concern here, is your company ready for this type of work-practice? Do you have an in-place system for work-from-home program?
In import-export business, sales people need to travel abroad at times pitching their products to prospects or partners. While operations team are casted to do the leg work in production or logistical aspect. Obviously, these functions are not designed for work-from-home environment. But there must be other way, this a call to entice our creativity depending on your niche.
The rest of the team like marketing, procurement, admin and finance can do things indoor. However, if any of these people are not used to work from home, will they be productive?
Coronavirus is teaching us to be more flexible. It may be the time now to re-think on how to maximize our workforce potential.
3. Strengthen relationship to suppliers
Suppliers can provide comprehensive and accurate information about the real-time situation in shipping, logistics and product availability amid Coronavirus. Yes, leads from reliable news channels are helpful, of course, but timely updates from the partner itself is more functional. And we can only leverage this if we are within our supplier’s priority list.
So, it may be time to start envisioning on how to reinforce our relationship with suppliers now. They have other clients like us also. Why us first? It some context, it might sound greedy but in business realities, it’s about competition and business strategies.
4. Fortify rapport to customers
Customers want a well-established communication. They do understand that their orders are delayed due to cancelled flights for air freight shipment, and emptied sailing schedules for sea freight. And so, their purchase orders are hanging. But we can go extra mile of enriching our rapport to them by keeping our communication online.
Letting our customers know the status of our industry first-hand, and showing them our efforts to navigate the situation in keeping the business running. This way, there’s a sense of hope that we might be able to plant in them. Taking the storm brought by Coronavirus into our advantage by drawing our customers closer to us.
5. Diversify your market
And here’s everyone is talking about – diversify our market. Coronavirus has distorted the way we used to manage import-export business. In market diversification, it involves concerns on tariff rates, non-tariff barriers and market trends. It is highly-recommended to choose a market that has free trade agreements with your country. For example, ASEAN–Australia–New Zealand Free Trade Area (AANZFTA), or the newly signed United States-Mexico-Canada Agreement (USMCA) and more than a dozen others.
Obviously, market diversification raises more concern about market entry, cultural adjustments, communication and logistics. As a result, there would be higher administrative costs. Do we have other options now? None, definitely. Unless you want to just focus your business risk on your current market and start all over again, if any viral hit the area in the years to come.
In this regard, I have published “Simplified Export Strategy: 10 Commandments for Exporters” that surely help you along the way.
6. Widen your suppliers’ list
More supplier means more options. Everybody knows this, but not until the viral came, we recognized the impact of having a single sourcing strategy. China is the global manufacturing dude for the past 30 years. Will they be the same? Analysts say, it isn’t the case now. Whether this is true or not, having multiple suppliers generally result to market dominance.
Diversifying suppliers is about discussing “what if and then what analysis.” Like, what if I incur higher shipping cost? Then, what?
And many more, what if’s. Especially, if your niche is needing some customization per order. So, unless you’re willing to risk your business in sole supplier, it may be the time to think differently.
7. Leverage local contacts
Real status of developing crisis like Coronavirus is a valuable treasure. Authorities would tend to paint some issue to keep the entire population or business community from panicking. So, having a local friend in communities where we source or supply our products is indeed worth considering.
Aside from personal friends, subscribing local news organizations or joining forums within our chosen country could also give us a fresh update. Obviously, we’re one step ahead from those who are news dependent competitors. To start, you can connect with me.
8. Review legalities
Breach of contract is costly. In import-export business, failure to deliver the goods to customer within specified period of time is tantamount to penalty, especially if stipulated in sales contact. Unless, however, we invoked force majeure clause in our contract. Meaning, it’s time to reassess the legalities of our endeavor with suppliers and customers, including ‘BIMCO infectious or contagious disease clause’ with our logistics providers.
In intensifying our efforts to stir our import-export business in the midst of Coronavirus, contracts could be overlooked. As Fujifilm and Xerox were in clash over alleged breach of contract, in June of 2018, Gadgets 360 published – anyone having an on-going merger or other forms of agreement with suppliers and customers – a closed-door meeting is worth the time, before taking a huge action.
Also, intellectual property and distributorship coverage is a paramount concern when it comes to market and sourcing diversification. This could ruin a fortune if not tackled timely.
9. Simulate scenario
Familiarity is the cue to effectively manage our import-export business while Coronavirus is on the run – in minimizing the impact to our bottom line. History has shown that there were 15 remarkable pandemics ever recorded over the past centuries which had caused more than 55 million people died, and Coronavirus is the 16th. Let’s be reminded that some of those infectious diseases were recurring year after year.
Optimistically, Coronavirus will be contained, eventually. The question is, how long? What would happen to our business? What if there’s another form of health emergency very soon?
So, here’s what we ought to do to get familiar with ins-and-outs:
Designate a think tank team: their job is to research deeper about the situation of your niche’s industry. Starting from employee’s protection, improve remote working program, finding an alternative supplier, doing feasibility study for market diversification, looking for local contacts up to reviewing business legalities.
As a result, you might be able to develop a brand-new business road-map, and figure-out a reserve funds. A Contingency fund is a lubricant to business operations, that allows our company to move despite of major trade friction like Coronavirus domino-effect.
Solicit advice from logistics providers: the purpose is to have a complete picture on how things must be done considering that freight and other shipping cost is high. And some ports may be congested, under quarantine or experiencing other form of disruption resulting to longer lead-time.
Consider all interruption: these are natural disasters like typhoon, earthquake, tsunami. Or, political and economic concerns like civil riots, terrorism and trade war. As US-China trade war was ignited, import-export business between the two economic leaders draws more uncertainties. Also, a trade dispute has sparked between Japan and South Korea last year. These factors, if not counted, obviously hamper our next venture.
So, anticipating all these interruptions, our business contracts, market-and-supplier research will become sharper– leading us to be more proactive in business dealings.
And lastly, connect with industry thought personalities for continues innovation in business practice. If this makes sense to you, I’m also in LinkedIn.
10. Pursue automations
Automation technologies these days is the nitro for business. In fact, at the height of virus-infection in China – they used robots to deliver food and receive trash from patients, Forbes reported. Machine learning, artificial intelligence, internet of things and big data analytics are being used behind the scenes to address the outbreak. More lives could have been buried than we know without this innovation in place.
And so, to operate our business amid the today’s crisis, using any of this automation tool is of great advantage. For example, by using big data analytics you’ll be able to quickly spot what country has the highest potential for your business. Also, through ‘internet of things’ you can view real-time figures of your business for faster decision making while working remotely.
11. Assemble core playbook
Business playbook is our map in identifying options and musts. In other words, this is the summary of all we’ve learned so far.
As manufacturing facility in Hubei province of China was locked down in February, importers and exporters around the world who sourced their products outside of China, probably unaware that their supplier is sourcing raw materials and parts from the epicenter. They are the supplier of your supplier.
Clearly, mapping out the supply chain of the products you’re importing or exporting – from raw materials, semi-finished or finished products to consumers – is way to go, allowing you to easily spot the bottleneck of your business.
Whatever we came-up with, it’s always been the rule of thumb to challenge the accuracy of our strategies – by assessing what’s working and what’s isn’t – and continually innovate as we progress.
Answering your why
Though the best time to prepare is when the storm doesn’t land yet, but there’s still time to forge a roadmap in turning this jam into an opportunity.
An opportunity to reach broader market – as most importers are also looking for more exporters as part of their multiple sourcing quest. And most importantly, an opportunity to win our colleagues’ hearts, showing support to partners and being intimate with family.
And, solving the pressing situation on delivery delays, higher logistics cost, and green light to purchase orders seems like a bandage to a deeper wound. What is needed is a holistic series of action that starts in recognizing the greatest resource – the people, then cash flow.
An old proverb says – “In every crisis comes an opportunity” – but without a well-thought strategy and mindful execution, it’s just an experience.
Stay curious
- 10-Step Process of Becoming a Highly Profitable Importer
- 10-Simplified Strategy of Successful Exporters
Content in this article is based on real-life best practices and research by the author, which do not necessarily reflect the stands of supplychainpedia.org. Photo by Razvan Chisu on Unsplash
We are importing from China, because the price from other countries are too high.
Hello, Rico. Thanks for sharing. That’s usually the case. For questions, just comment here or message us anytime.