Global Trade Base Trends
March 2, 2009 - Higher Demands - Patrick Donnell, President.
- 2009 is off to an unbelievable start. The doom and gloom news reports are not painting an accurate picture of how much product is in demand overseas. The consumer level in international markets are not impacted by the same economic drivers as in North America. The stock market reports and large corporate earnings abroad do not accurately reflect what is being purchased in the stores. The U.S. standards of production make our goods some of the best on the planet. The weaker U.S. dollar allows for more purchasing power of quality goods abroad. Our initial projection of a 300% increase in our international sales for 2009 may be on the low side.
- Unfortunately this increase in demand overseas has lessened the amount of time we have for educating smaller companies on the benefit of going international. We have had to set monthly production minimums for any new potential client. Our buyers are wanting product to place in hundreds of outlets. There is no way a company that can only product a container or two monthly will be able to get adequate penetration to meet the buyer demand.
- We do work with copackers within the U.S. to fill any overflow orders that may not be able to meet production quantities. This will help some smaller companies take advantage of the international marketplace. This will help smaller companies tap into the exponential growth in international trade.
- One of the most challenging hurdles for our industry is educating domestic companies to modify their business model to include markets outside of the United States. We hear a full range of excuses related to the reluctance to adapt their business as economies and markets change. The more amusing excuses infer that it is a scam to want to take their products international; they do not pay anything for market penetration anywhere; and, they do not trust a company that absolutely will not violate nondisclosure agreements. In reality, going international is beyond their comfort zone and it takes change to make the effort. Those changes are not comfortable.
- The upside to these recent higher demands is that more product can move around the world at much cheaper prices. Even unemployed people in foreign countries can buy U.S. goods at more affordable prices than ever before.
- All of these higher demands are also causing us to excelerate our strategy to open offices in foreign countries to facilitate export transactions. Simply put... Business is good.