The Complexities of Global Trade

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A truly global economy is on the horizon and yet seems so many generations away. Like the marriage of two people, combining laws and regulations and fees and currencies of vastly different cultures is far from the dream the media paints it out to be. In truth, it is full of intricate complexities that prove just how impressive it is for a company like McDonald’s to be doing so well in so many different parts of the world.
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Communication
One of the more obvious difficulties is language. Not everyone speaks the tongue of the country they are trading with. Aside from the face value difficulty of verbal speech, cultural communication is even harder. What is acceptable in one country may be offensive in another. To achieve global trade, all countries involved must have representatives somewhat learned in the matter of not only language but also customs and cultures. They must act as translators to ensure deals go through and time tables are manage effectively. Even beyond this human aspect, the companies involved must translate their products so the overarching message of the advertisement on the package itself is not lost in translation.
High Risk
Cross country product shipment comes with its own amount of peril, but the distances are relatively short, resulting in easy fixes should an issue arrive. Shipping things across the globe does not allow for such relaxed dealings. Whether shipped half way around the world on a ship or by plane, the company must design a means to get everything to its destination safely. Even when those logistics are figured out, just imagine how much money is lost if a ship sinks or plane crashes. The risk of this increases the cost of the product being shipped, yet companies don’t want to markup items too much or they won’t sell at all, something that would completely defeat the purpose of investing in a foreign market.
Economy
There is arguably nothing more volatile than an economy. It can be perfect one day and then sink into a depression a week later, not to mention the daily fluctuations in market values and needs. Since shipping a product takes a long time, it can be hard to calculate exactly how much to ship because what the public wants may very well change before the shipment even arrives, hurting sales no matter what. Then, the exchange rate offers its own share of complications. Fluctuating daily, it can prove to be either a benefit or a negative in a matter of hours, directly affecting how much money you net once the transaction is complete.
Regulations
Every country comes with its own governing body and, therefore, its own set of special rules and regulations governing what is a safe and acceptable product to sell on their market. These are constantly changing based on the current political climate, meaning trying to coordinate a trade can be a literal headache (also keep in mind there could even be a sudden law that could go into effect barring your current shipment from even being unloaded). Luckily, export compliance software has now emerged to counter this circus act. The software generally has a trained team behind it, updating everything based on new laws that arise. This allows the company to simply sign up for an entirely automated process, freeing their workers from doing research they’re probably not qualified to do. This ease of adherence to compliance also frees up company costs. Many times, breaking a rule will result in a fine, so if less rules are being broken, less money has to be allocated to covering the costs.
These intricacies only scratch the surface, of course. Knowing even this small amount makes it seem like a miracle that companies have successfully gone global at all. Learn from the ones that have. Though you might not be able to afford foreign factories, you can learn how to plan for all of the bumps that inevitably come with expanding your market, much less to an entirely different country. Just remember that no matter what your plan is, research is your best friend.

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