To make sense of all this head spinning world of international business, we need to get back to the very BASICS, the fundamental formula or relationship, around which all international professions in the world exist.
This fundamental relationship is:
Product from Country A ------> is delivered to Country B.
That is all. This is trade. This is international business.
Since each product has its own specificities, rules get created around its ability to be transported from country A to country B. It is evident that delivering cups, for example, should have much simpler rules than delivering uranium. Every such specificity leads to the creation of roles that oversee the transactions, hence your international trade functions branch out more and more. Nonetheless, the fundamental relationship is intact in its simple form. It is just all these rules create additional burden on companies to be more vigilant and spend time and resources to make sure that they are following the rules even if they have a simple product. Or overwhelmed by this deep forest of international trade requirements, some companies don't even think about international trade and dismiss such opportunities as too complicated and too expensive.
Trade facilitation is an ability to identify and consolidate the necessary parts of knowledge from the international business practice relevant to a particular product in question in order to complete its delivery from country A to country B.
What are those necessary parts? They include research into general rules and restrictions on trade between the two countries, formulation of sales and price negotiation tactics, logistical planning, payment mechanisms, risk management mechanisms, contract negotiation and execution.
Company that specializes in trade facilitation like we do at SALAMA INTERNATIONAL, is familiar with and effective in bringing these necessary parts together to achieve successful execution. Each part contains multitude of details that require uninterrupted attention because otherwise, it may be very costly for a company to correct mistakes down the road. By having experience, trade facilitators can SAVE massive amounts of money, time and nerves, give trading partners peace of mind and help them increase their sales and market share.
Trade facilitation is similar to project management in a sense that it brings various functions together toward accomplishing a goal, but its far beyond that in a sense that it requires knowledge or at least understanding of each particular function necessary to completing an international transaction.
For smaller companies that cannot dedicate company resources to form full-fledged international departments, trade facilitation company is an excellent and inexpensive way of growing international sales. It is like outsourcing the entire international function at a fraction of the cost it would take to do it in house.
In larger companies that have dedicated resources, trade facilitator can serve as the necessary coordinator of projects because the various international roles that work inside the company function in matrix organizations with no direct accountability for projects' overall success.
Posted by Nilufar Salama of www.salamatrade.com on 8/13/2015. SALAMA INTERNATIONAL - Providing Value in Growing Your International Business.
August 13, 2015