By: Paul G. Bergman, Jr. & Jan Mazotti Issue: Global Trade Section: Jewel Of Collaboration
The Collaborative “Jewel” of the U.S. Department of Commerce
Need a “secret tool” to help expand your business? Would you like to join the thousands of small business owners who are exporting goods and services overseas? Could you use help in negotiating the sometimes-difficult dealings with foreign countries that could use your products?
Under the huge umbrella of the Department of Commerce is a “jewel” called the U.S. Commercial Service. The governing mission is to increase U.S. exports. It offers a variety of free and fee-based services, such as counseling, market research, advertising tools, trade events and introduction of companies to qualified buyers, all to help U.S. companies increase overseas sales.
It’s also one of the best examples we’ve seen of how collaboration works.
Collaboration, when two or more people interact and exchange knowledge in pursuit of a shared goal with benefit for both parties, is the new way of the world.
As borders blur and trade ignites, working collaboratively will benefit international businesses. We believe collaborative efforts are the key to competitiveness in a global economy.
Small businesses create 70 percent of the new jobs in the United States, so it’s in everyone’s interest to help these firms increase their exporting possibilities. In fiscal year 2008, the Commercial Service helped facilitate $70 billion in U.S. export sales.
Most small and mid-size companies do not have the expertise or resources to tap into foreign markets. Enter the Commercial Service, which has over 250 U.S. and foreign offices with and more than 1,800 worldwide trade specialists.
Here are some examples of the help this network has given:
A Florida Hispanic-owned business called Pharmed Group is the largest independent full-line distributor of medical, surgical and pharmaceutical supplies. Pharmed manufactures vitamins and nutritional supplements under the labels PMG and PAL. The Commercial Service has given them help with export counseling, market research, and trade events. In 2003, the Commercial Service helped the firm participate in a Gold Key Service program that provides for pre-arranged business appointments abroad, all of which are pre-screened by the Service.
The Commercial Service in Brazil pre-selected appointments with high-potential drugstore chains in the Sao Paulo area to offer Pharmed products, and the Service then helped Pharmed with information on the product registration process in Brazil.
As a result, Pharmed signed a distributor agreement in Brazil as well as a deal with a major drug store chain. Export sales are up, adding to Pharmed’s continued growth and enabling it to add ten new employees at its PAL laboratories last year.
It also works in reverse. Foreign buyers also contact the Commercial Service to find U.S.-based products or service suppliers.
Last year, the U.S. Commercial Service in Argentina asked for assistance in finding a buyer of titanium products and contacted Vulcanium Metals International, based in Illinois. Within months, Vulcanium Corporation had sold $10,000 worth of titanium to the Argentine company.
The Commercial Service has entered into several public-private partnerships to better leverage its services. An example of this is Commercial News USA (CNUSA), an advertising vehicle for U.S. companies to showcase their products globally. CNUSA, published by ThinkGlobal Incorporated, is distributed by the Commercial Service network in more than 145 countries, with a worldwide readership approaching 400,000. Each bi-monthly edition focuses on different industries, with many U.S. companies advertising on a regular basis.
One of those companies, Cevan International, a Colorado manufacturer of nutritional supplements and a recipient of CNUSA’s Exporter of the Year Award, claims that advertising in CNUSA is central to its success. Mike Baum, Cevan’s International Sales Specialist expounds: “As a small business, we have a limited marketing budget, and CNUSA allows us to market effectively worldwide. The majority of our qualified leads are a direct result of advertising in CNUSA.”
Furthermore, trade show organizers have teamed with the Commercial Service to deliver the International Buyer Program (IBP), a service that matches foreign buyers with U.S. suppliers. Commercial Service industry specialists from around the world recruit buyers to participate in these IBP trade shows. The Commercial Specialists accompanying the buying delegations take part in “Showtime” programs, individually counseling U.S. companies interested in entering their respective foreign markets, while Senior Commercial Officers present their views on market entry in “Country Roundtable” seminars.
The Commercial Service IBP coordinator and the Commercial Specialists also facilitate meetings between U.S. suppliers and potential foreign buyers at the show, reinforcing the fact that you don’t always need to leave the country to meet the perfect overseas business partner.
The Collaborative “Jewel” of the U.S. Department of Commerce
For instance, when the Venezuelan government changed its foreign currency exchange law, making it extremely difficult and very costly for Venezuelan companies to pay for their imports, the Commercial Service stepped in. In fact, two Colorado companies that had long-term relationships with their Venezuelan buyers found themselves caught in non-payment situations and turned to the Denver Commercial Service office for solutions.
The Commercial Service network in Denver and Caracas counseled the Colorado companies on payment alternatives. By completing tedious paperwork and through tremendous patience on the part of both Colorado companies, the companies were paid in full, with one of the companies recently resuming trade with its Venezuelan partner.
Another collaborative success was with PICS Telecom Corporation, a buyer and seller of overstocked and used/refurbished telecommunications equipment, which became a new client of the Rochester, N.Y. Commercial Service office in September 2004.
PICS had explored the idea of entering the Mexican market, but needed more information to make a final business decision. They contacted the Rochester Commercial Service office to obtain clarification on the Mexican tariff rate for telephonic switching equipment, which was extremely hard to understand. Although the company had been told that the tariff rate on the equipment was 13 percent, Commerce maneuvered through Mexican Customs and found that the import of the equipment was actually duty free. Because of this collaborative network and partnership between local and foreign offices, PICS was successful in securing a $250,000 plus contract in Mexico.
Yet another example: Adam Grosser, Director of International Engineering Sales at Lightning Eliminators & Consultants, Inc. (LEC), has used the Commercial Service’s programs to find business partners in some of the world’s most difficult environments. LEC manufactures lightning strike protection systems that shield everything from oil rigs to telecommunications towers.
“We use the services to augment our business development strategy. We take advantage of U.S. government contacts and relationships to leapfrog the partner development process. There is a certain comfort in knowing that the U.S. Commercial Specialist in Algeria or the Russian Far East has known our potential partners there for 10 years or more.” Grosser emphasized that the Commercial Service does not only reduce the time-to-market, but also provides a safety net in politically turbulent nations. “Nothing decreases my stress more quickly than knowing that I am going to be met at the airport by a taxi that I’ve ordered through the U.S. Consulate,” says Grosser.
It’s especially important for business owners to know that 95 percent of the world’s consumers live outside the United States. So if your company is only selling domestically, you’re reaching just a small share of potential customers. And, small and medium-sized companies account for almost 97 percent of U.S. exporters.
Exporting lets companies diversify their portfolios and weather changes in the domestic economy. Why not choose the collaborative route to export success?
To connect with your local Commercial Service office, visit the website at www.buyusa.gov. For more information on resources and individual assistance, call 1-800-USA-TRADE or visit www.export.gov. To access the Commercial Service public/private partnership’s international advertising vehicle, Commercial News USA, visit www.thinkglobal.us.
Paul G. Bergman, Jr. is the Denver Director for the U.S. Export Assistance Center. He can be contacted by visiting www.buyusa.gov/colorado or by phone at 303-844-6623.