Expand Abroad, Locally: It's Called Selling to An Export Trading Company

Frank Lavin, the U.S. Commerce Department’s former undersecretary for international trade and also a former U.S. ambassador to Singapore says this:

“The smaller the company, the less practical it becomes to learn a new language, deal with new tax codes and currencies and to take a huge global risk.”

Laurel here:  totally do not agree.  Think of it this way:

"Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime." ~ Chinese Proverb

Laurel's version:

"So give a small business owner a local sale with a premium transaction fee attached and you allow them to increase their revenues for a day. Teach a small business owner how to export and you allow them to go global for a lifetime." ~ Laurel's export-related twist on Chinese Proverb

Lavin's solution?  Export Now (his new company).

Here is how it works: American businesses mail their goods, on consignment, to Export Now’s U.S. facilities. From there, items are collected and shipped by sea to a warehouse in China. Once the merchandise arrives in China, business owners are free to begin advertising and selling their items on Tmall.com, an online marketplace similar to eBay.

Catch or cost?

There is an annual fee of $3,000, plus a 10 percent transaction fee on each sale.  Ouch!

Anyone ever hear of the Export Trading Company Act (1982)?

The Export Trading Company Act (ETCA) was created by Congress to enable U.S. firms to collaborate with each other to reduce their exports costs, become more efficient at exporting, and, in turn, compete more effectively in the export market.

Another definition here.

Read the entire article about Lavin's new export trading company here.

Illustration credit here.

Who Will Be The Next U.S. Commerce Chief?

According to Peter Cohen's commentary, there are three names in the hat:  Google Executive Chairman Eric Schmidt, Ron Kirk, U.S. trade negotiator and Jeffrey Kindler, the former CEO of Pfizer.

Cohen gives his assessment of the candidates.  He also references:

The administration's goal of doubling U.S. exports in five years is an ambitious goal, no matter who next fills the role of commerce secretary. Based on the latest numbers, U.S. exports rose 16.6% to $1.83 trillion in 2010. At that level we'd need to boost exports another 70% to reach $3.1 trillion by 2014. 

And read this part carefully:

At this point, I should disclose that I have a small personal connection to this story:   This year, I have a new book coming out about how small and medium-sized businesses can enter global markets, titled Export Now: Five Keys to Entering New Markets.  I co-authored it with former Undersecretary of Commerce for International Trade Frank Lavin, and Secretary Locke wrote the forward.

Keep tabs on it.

Illustration credit here (where you can buy it as a bumper sticker).