Look at any online forum or article about exporting, and you’ll be presented with a bevy of statistics that measure success by the total revenue of general product categories. While this is good information for governments and school reports, it does little to help you ascertain which specific product will be the most profitable for your business. That’s because, unless you plan to launch a giant operation with a broad product base and a budget that will enable you to “out market” the established competitors in the space, a plan to export the overly general product categories of “Textiles” or “Machinery” does little to guide your business.
In addition, you must consider the unique combination of talent and connections that you have to offer. For instance, a chart might say that your country is the world’s largest exporter of electronics, but if you’ve got access to a well-appointed garment factory and talented clothing designers, then it might make more sense to explore a fashion business instead. After all, you’re not looking to corner the entire exporting market for a country, you can be wildly profitable and make millions with a tiny slice of a smaller segment of the pie.
Now, this isn’t to say you should ignore all of the world trade reports, it’s just that you should use those statistics as a basis for, but not the final factor in determining which products to export. And many business experts agree that at least starting with a niche gives you an edge over the “big guys” and allows you to create a stable and loyal customer base.
While this guide is perfect for the entrepreneur who’s trying to decide which products to export, it’s never too late to find a new niche – even if your business is already established. So for exporters old and new, here are:
Sometimes, “Niche” Guys Finish first.
3 Ways to Find your Niche.
- Sell “YouNiche” Products: If you can find or create a product that solves a real-world problem… and so far nobody else is (or very few are) selling it, then you’ve found a golden nugget of a niche. Such was the case for the Latvian company Sidrabe1, forced to diversify after the country won its independence from the Soviet Union. It took a few years of research and development to get it right, but now the company (renamed Groglass®) makes “invisible” glass that is exported to more than 45 countries and returns annual profits of EUR 9.96 million (not bad for a niche!). The anti-reflective glass is used in art framing, television screens, supermarket refrigerators, and modern architectural and design. There are only 4 other companies in the world that manufacture this product, and Groglass has cornered 70% of most countries in the European market. But don’t think you don’t have to achieve major engineering breakthroughs to create a product niche. Others have found success with simpler inventions such as bean bags that look like sports balls, polyester barbed wire, and herbal, non-alcoholic wine.
- Cater to Uncommon Importers: While your competitors might be focusing on selling the product to all the usual importing countries, you might benefit from courting buyers in less common import countries. Not only will it lower your competition, but it could also raise your bottom line as well. Some countries will even try to compensate for their lack of attention in the marketplace by lowering trade tariffs to make it more appealing for exporters. For ideas, take a look at these least expensive import countries.So even though most statistics suggest that the US is a leading import country you might find a niche buyer in a smaller neighboring country that’s not even on the charts. Your transport costs will go down and you’ll face fewer competitors in the space.
- Elevate Your Standards: When you’re selling a product in a market that is oversaturated, you need to find a way to differentiate yourself. And sometimes creating an entirely new niche product just isn’t the right course. If you find yourself in this situation, consider differentiating your business by setting niche standards. Things like quality certifications (e.g., Certified Organic, Grade A, etc.) and even the way you do business (e.g., Fair Trade, eco-friendly practices, etc.), can help create demand where there was none before. For example, Kuber Grains & Spices Pvt. Ltd. uses an innovative low-temperature grinding technology (ITG) to preserve the volatile & delicate oils in its spices – setting it apart from the competition. Pro Trade International offers cocoa certified by all four major certifications (UTZ Certified Good Inside Program, Rainforest Alliance, Fairtrade International FLO-CERT, Fair Trade USA), and it is a member of Sedex, the Supplier Ethical Data Exchange.
Now that you have some ideas on types of niches, let’s put it all together with the research. The International Trade Centre (ITC) offers many resources to visualize the big picture with data – which can be very useful as a jumping off point. Here’s an example of how you could use their Export Potential Map combined with some creative thinking, to hone in on your niche. Take a look at this table:
As you can see, the potential for exporting sugar products from India to Greece is huge. There is $23.3 million to be made! This is the first breadcrumb in our niche-finding trail.
Now we turn to Google. A little online research reveals that sugar beet is already grown in Greece, and the country has a history of offering aid to farmers with the goal of reaching self-sufficiency. Based on this information, it sounds like exporting sugar products to Greece is not a very good long term business plan after all.
But before you dismiss this sweet crop, let’s get a little creative. Here’s where niche thinking really comes into play. Go back to step 1 and ask, “What problems are associated with beet sugar that I could solve?” For starters, it is seen as being an unhealthy product by a consumer market that is increasingly concerned about issues like genetically modified organisms, food processing and the glycemic index of certain sweeteners. No matter how much beet sugar Greece can produce, it will still have a need to import alternative sweeteners if its consumers demand them.
Luckily, India has an agricultural sector that is teeming with potential solutions and niche exports. Take coconut sugar, for instance. In many consumer publications, it is trending as one of the healthiest sweeteners with a low glycemic index and naturally occurring minerals. In India, one hectare of coconut palms can produce 54 metric tons of coconut sugar per year! But that’s just one possible niche. If you don’t have access to a coconut palm farm, you could try exporting agave or stevia, two very popular beet sugar substitutes grow easily in India.