Entering the world of exports is exciting, new markets, diverse customers, and the promise of business growth. Butwithout the right preparation, many first-time exporters end up losing money, credibility, or even entire shipments. Whether you're shipping sugar from Brazil, coffee from Ethiopia, or industrial machinery from India, success in global trade requires more than just having a great product. It takes knowledge and careful planning to navigate regulations, logistics, and cross-border risks.
This article outlinesseven common mistakes new exporters make– and how you can avoid them. Our focus is especially onemerging-market entrepreneurs(from African agribusinesses to Latin American SMEs) venturing into global trade. We provide data, examples, and tips from official trade sources to help youexport smart, not just fast. Avoiding these costly traps will set you up to build a thriving and sustainable export business from day one.
1. Ignoring Market Research❌
Ignoring Market research
The Mistake:Jumping into a foreign market without researching the demand, local regulations, or competition. Too often, new exporters get excited by a single inquiry or the idea of selling overseas, and they rush inwithout understanding if the market truly needs their product or what adjustments are required. This can lead to unsold inventory, pricing missteps, or compliance problems if the product doesn’t fit the market conditions.
Why It’s a Problem:Every country has unique consumer preferences, import rules, and market dynamics.Failing to do proper market research is like flying blind, you might end up targeting the wrong country or missing hidden costs that erase your profit. As one export advisor noted,“New exporters might plan for shipments without understanding the target country’s market preferences, demand, and competition. Please do clear and multilevel research on market trends”. In fact, after you draft your export business plan,market research is arguably the most important factor in international. Skipping this step can mean entering a market that is saturated, has no demand for your product, or where regulatory barriers make it unviable.
How to Avoid It:Conduct thoroughinternational market researchbefore you commit to any export deal:
- Use data tools: Leverage free resources likeITC Trade Map and UN Comtradeto see import statistics and identify where products like yours are in demand. Also consult databases like theWorld Bank’s Doing Business reports(which detail country-by-country regulations and trading requirements). These tools help you size the market and spot trends in tariffs or volumes. For example, Trade Map provides indicators on export performance and international demand for over 5,000 products across 220 countries. Such data-driven research can confirm an opportunity exists and reveal who your competitors would be. As the Canadian Trade Commissioner Service notes,“Market research is the key to understanding your opportunities, it can confirm an opportunity, show how a new market can be developed, or help discover what’s important to customers”.
- Study local conditions: Go beyond demand data. Investigatelocal consumption trends, cultural preferences, and legal requirementsin your target market. For instance, if exporting food, understand labeling laws and popular flavors; if exporting machines, learn the technical standards or voltage differences. Check the import tariffs and anycertifications or standardsrequired (e.g. some markets require specific safety marks or quality certificates). The more you know about thepolitical, economic, and cultural factorsaffecting the market, the better you can adapt your product and marketing.
- Leverage expert help: Don’t do it all alone.Partner with local market consultants, trade promotion agencies, or use government export assistance programs. Many countries’ trade agencies (for example, export promotion boards or commercial sections at embassies) offer market reports or can connect you with in-country experts. A local partner or mentor can validate your research and navigate nuances (like business etiquette or buyer expectations) that data might not reveal.
Investing time in research upfront pays off. It helps youchoose the right markets(perhaps starting with one or two high-potential countries rather than scattering efforts everywhere). It also ensures you adapt your product and pricing to meet local needs. In short,never skip market research– it’s cheaper to learn on paper than to learn by losing a shipment.Entering a market you don’t fully understand is a recipe for costly surprises.
2. Not Verifying Your Buyers ❌
NOT VERIFYING YOUR BUYERS
The Mistake:Accepting large orders from unknown foreign buyerswithoutchecking their legitimacy and creditworthiness. In the excitement of getting an overseas inquiry, new exporters may take the buyer at their word, sometimes with disastrous results. The risks include fraudulent “buyers” who disappear after you ship the goods, or genuine but unreliable customers who default on payment.
Why It’s a Problem:Unlike domestic sales, you often cannot easily chase or sue a foreign buyer if things go wrong.The export arena unfortunately has scammers who prey on newcomers, and even well-intentioned buyers can run into financial trouble, leaving you holding the loss. Verifying who you’re dealing with is crucial.It’s the exporter’s responsibility – and a prudent practice – to screen foreign buyers before any transaction. Failing to do so can mean shipping goods to a fake company or one with a bad payment track record. For example, during the 2008–09 global financial crisis many Chinese exporters learned this the hard way. In one case, a company in China shipped $200,000 worth of clothing to a new Russian buyer (after getting a $30k partial advance), but the buyer couldn’t pay the remainder or even clear the goods from the port due to financial problems. The result: the container sat unclaimed incurring demurrage fees, and the exporter was stuck with the costs. Shaoxing customs officials reportedhundredsof such stranded containers in Russian ports because buyers failed to pay or collect shipments. This kind of outcome underscores whydue diligence on buyers is non-negotiable.
How to Avoid It:Verify every new buyer’s credibility and reliabilitybefore you agree to any big deal, especially if they found you online or out of the blue:
- Do background checks: Use business registries, chambers of commerce, or credit reporting services to confirm the company’s existence, size, and reputation. A simple step is checking the buyer’s company website and looking up their physical address and landline phone number (fraudsters often lack these). Search online for any red flags or news about them.Use LinkedIn or industry networksto see if the company and its principals have a track record. You can also ask for references or talk to other exporters who have dealt with them if possible.
- Leverage official resources: Government trade departments and embassies can often help verify a foreign company. Many countries organizetrade missions or have commercial attachéswho know reputable importers. For instance, the U.S. has a Consolidated Screening List for sanctioned or blacklisted entities. Export credit agencies (like EXIM in the US, or export-import banks elsewhere) also maintain databases of buyers they’ve insured. Checking these resources can save you from obvious bad actors.If a potential buyer appears on any government watchlist or you can’t find any verifiable info about them, treat it as a major red flag.
- Ask the buyer for credentials: It is reasonable to request a new buyer to provide a copy of theirbusiness license or import registration, a company profile, and even banking references or trade references. Serious buyers will understand this is part of due diligence. If a buyer is unwilling to share basic corporate information or proof of past imports, be very cautious.
- Start small and build trust: For the first transaction,avoid shipping a huge order on open terms. Propose a smaller trial shipment or use a secure payment method (more on that in Mistake #7). This way, you test the buyer’s reliability with limited risk.Consider using escrow services or a Letter of Credit for initial deals, these add cost, but they ensure you don’t lose everything if the buyer isn’t genuine. As a tip, one trade expert suggests even usingcredit insurance or insisting on an L/C for new buyersas an extra layer of protection. Basically, don’t extend credit until the buyer has proven themselves.
By verifying buyers, you not onlyavoid scams(like fake companies that place large orders then vanish), but also gauge legitimate customers’ financial health. If a buyer’s company is real but small or new, you might decide to offer only limited credit or to secure a guarantee.Trust is critical in international trade – but trust must be earned and verified, not given blindly. As the old Russian proverb goes, “trust, but verify.” Conducting due diligence on your buyers will greatly reduce the chance of unpleasant surprises and will help you sleep at night after your goods are on the water.
3. Poor Documentation ❌
POOR DOCUMENTATION
The Mistake:Incomplete, incorrect, or sloppy shipping documentation – which leads tocustoms delays, penalties, or blocked payments. International shipments require a stack of documents (commercial invoices, packing lists, certificates of origin, bills of lading, insurance certificates, etc.), andeven one wrong detail can cause major trouble. New exporters often make mistakes like missing signatures, inconsistent data between forms, or failing to match the letter of credit terms exactly. The result? Containers get stuck at the port, buyers can’t clear the goods, or your bank refuses to release your payment because of a discrepancy in paperwork.
Why It’s a Problem:Unlike domestic shipping,foreign customs and banks are very strict about documentation. A typo in a product description, a missing stamp, or an incorrect HS code can halt your shipment at the border. If you’re using a Letter of Credit (L/C) for payment, banks will scrutinize every document against the L/C terms – any discrepancy canvoid or delay your payment. Documentation errors are, unfortunately,extremely commonand costly. Industry data shows that globallybetween 60% and 75% of documents presented under letters of credit are rejected on first try due to discrepancies. That doesn’t always mean you won’t get paid, but it does mean a scramble to fix documents, added bank fees, and a longer wait to receive your money. In worst cases, it can mean the L/C expires and youdon’t get paid at allbecause the window was missed. Even outside of L/Cs, poor documentation can lead tofines or storage chargesif customs holds your goods. Consider a recent real-world example:In May 2025, U.S. authorities rejected 15 shipments of Indian mangoes due to a certification paperwork error, forcing the mangoes to be destroyed and causing an estimated $500,000 loss to the exporter.The produce itself was fine and met quality standards – but an“incorrectly issued”phytosanitary certificate (form PPQ203) led to the entire consignment being refused entry. This case dramatically shows howone document mistakecan torpedo an otherwise successful export.
How to Avoid It:Treat documentation as seriously as product quality. As the saying goes,“the job isn’t finished until the paperwork is done correctly.”Some best practices:
- Work with experts: If you are new,hire a seasoned freight forwarder or customs brokerto guide you. These logistics partners are accustomed to preparing export documents and can double-check that everything is in order. They can also advise on country-specific requirements (e.g. documents needed for certain destinations like inspection certificates). While you should understand the docs yourself, having a pro in your corner reduces errors.
- Double-check every document: Create achecklist of all required shipping documents(Commercial Invoice, Packing List, Certificate of Origin, Bill of Lading/Airway Bill, Insurance certificate, any inspection or quality certificates, etc.) and verify all are prepared correctly. Ensurethe information is consistent across all documents– the product descriptions, quantities, weights, and values shouldmatch exactlyfrom invoice to packing list to B/L. Even the spelling of consignee names and addresses should be uniform. Small discrepancies can raise red flags. For instance, if your invoice says “500 cartons” but the packing list says “498 cartons,” customs will question it. Consistency is key.
- Align with the letter of credit or contract: If your payment is under a Letter of Credit,meticulously follow the L/C termsin how documents are filled out. The wording on documents (like the invoice) should mirror the L/C wording. If the L/C calls your product “XYZ Widgets Model A,” don’t abbreviate or change it on the invoice to “Widgets A” – that could be deemed a discrepancy. One veteran exporter advice is:“Match the wording exactly with the Letter of Credit or contract – one wrong detail can delay or void payment.”In other words,be pedanticabout fulfilling all stated requirements on the L/C (down to document titles, formats, signatures, etc.).
- Leave no blanks or errors: Ensure all forms are signed where required, dated correctly, and stamped if needed.Common pitfallsinclude missing a required chamber of commerce stamp on the certificate of origin, or not stating “Freight Prepaid” on the B/L when your price is CIF – these seemingly minor omissions can cause big hold-ups. As a trade company blog cautions,errors like “incorrect product descriptions, inconsistent invoice details, or missing signatures can lead to significant delays at customs, increased costs, or even legal penalties.”In short, accuracy in documentation protects you from problems.
- Use digital tools if available: Many countries allow or encourage electronic documentation and pre-declarations. Using digital platforms (for example, Electronic Data Interchange systems or online export portals) can reduce human error and speed up customs clearance If your freight forwarder offers to file documents electronically, it’s often a good idea.
Finally, alwaysfactor in time to review docsbefore dispatch. Rushing paperwork the night before a vessel cutoff is how mistakes happen. By prioritizing clean paperwork, you ensure your shipment flows smoothly and you get paid on time. Remember,international trade runs on documents– treat them with respect, and you’ll avoid many headaches.
4. Quoting Prices Without Understanding Incoterms ❌
QUOTING PRICES WITHOUT UNDERSTANDING INCOTERMS
The Mistake:Offering a price to an overseas buyer without being clear about what that price includes – in other words,not specifying the Incoterm or shipping terms. This leads to confusion (and disputes) over who pays for freight, insurance, import duties, etc. Many new exporters simply quote a price per unit (perhaps based on their ex-factory cost) and later are shocked to learn the buyer expected that price to include delivery to their door. MisunderstandingIncoterms(international commercial terms) is a classic rookie error that canwipe out your profit or upset your customer.
Why It’s a Problem:Incoterms like EXW, FOB, CIF, DAP, DDP, etc., definethe division of costs, risks, and responsibilities between seller and buyerin an international sale. If you don’t explicitly agree on an Incoterm, you and the buyer might assume different things. For example, a buyer might think your $100 per unit quote includes shipping to their port (CIF), whereas you only priced ex-works (EXW) and expect them to arrange pickup. The result can be arguments, or you scrambling to cover unexpected logistics costs to save the deal.New exporters often do not fully understand trade terms like FOB vs CIF vs DDP, which creates confusion in cost sharing and delivery responsibilities. An expert in export operations explained:“Misunderstanding of Incoterms creates confusion in sharing costs and responsibilities with the buyer. Learn how trade terms work so you can clearly define who pays for freight, insurance, duties, etc. It helps avoid disputes with buyers and saves unnecessary costs.”In short, if you quote without clarifying Incoterms, you’re setting yourself up for conflict or loss. You might end up inadvertently agreeing to cover fees you didn’t budget for (e.g. local port charges on the buyer’s side), or the buyer might feel misled and cancel the order.
How to Avoid It:Learn Incoterms and always include the correct term in your quotations and contracts.Some tips:
- Educate yourself on Incoterms: Spend time tounderstand what each Incoterm means– from EXW (Ex Works, where the buyer takes all transport responsibility from the seller’s door) up to DDP (Delivered Duty Paid, where the seller delivers to the buyer’s door, including import duty). The International Chamber of Commerce (ICC) publishes the Incoterms® rules (most recently Incoterms 2020). There are plenty of charts and guides explaining each term. Knowing these is crucial because the choice of Incoterm affects your costs, risks, and paperwork. For example, agreeing to CIF (Cost, Insurance & Freight) means you must arrange and pay for sea freight and marine insurance to the buyer’s port, whereas FOB (Free On Board) means you only cover costs until loading at your port.If you don’t know these differences, you can seriously underprice your goods or take on liabilities unknowingly.
- Always quote with a term and location: Make it a habit that every price you offer is followed by the Incoterm and a named place. For instance, “$5.00 per unit FOB Lagos Port” or “$5.80 per unit CIF Dubai Port, Incoterms 2020.” This removes ambiguity. The buyer then knows exactly what is included. If a buyer asks for a price and doesn’t specify, don’t just give a number – clarify, e.g., “Do you need this price delivered to port or will you pick up from our factory?” By explicitly stating the term, you protect yourself. It’s much easier to negotiate when everyone is on the same page about who covers what.
- Choose terms wisely:Select an Incoterm based on your capability and the buyer’s preference.New exporters might start with terms that limit their responsibility to what they know. For example, if arranging international freight is daunting, you might quote FOB (so the buyer handles the main transit). However, be open to learning – sometimes offering CIF or DAP (Delivered at Place) can make you more competitive if you can manage it. Just ensure you include all those costs in your price. Conversely, be careful with DDP (Delivered Duty Paid) for a new market; DDP means you’re responsible for customs clearance and import duties in the buyer’s country – which can be very tricky if you’re unfamiliar with their regulations. It’s often safer to avoid DDP unless you have a reliable agent in that country.The bottom line: never agree to an unfamiliar term without understanding the obligations.
- Communicate with the buyer: Incoterms can sometimes be misunderstood even by buyers. So, when finalizing,confirm in writing what costs you’re covering. For example, “Price includes ocean freight to Port Klang and insurance. Import customs clearance and duties in your country will be your responsibility.” This reinforces the Incoterm in plain language. It’s better to over-clarify than to have a dispute later.
By mastering Incoterms, you demonstrate professionalism and avoid costly surprises. You’ll know how to build your pricing properly and your buyer will appreciate the clarity. In global trade,every quote without an Incoterm is a guesswork time bomb– don’t let it blow up your deal. Always spell it out!
5. Relying Only on One Buyer or Market ❌
Relying only on one buyer or Market
The Mistake:Putting all your export sales intoone customer or one country, thereby making your business dangerously dependent on that single relationship. Many new exporters are so relieved to land a big overseas buyer or a deal in one market that they concentrate all their energy there. The risk is if that buyercancels orders or if that market’s economy falters, your entire export revenue can collapse overnight.
Why It’s a Problem:Lack of diversification = high vulnerability.Businesses that rely too heavily on one partner or market are essentially “one decision away” from disaster. If you have only one foreign buyer purchasing 100% of your export volume, what happens if that buyer suddenly faces financial issues, changes suppliers, or even goes out of business? You could lose all your export income in one blow. Similarly, if you are only exporting to one country, changes in that country (new import tariffs, political instability, currency devaluation, etc.) could sharply impact your sales. A public policy article on trade puts it succinctly:“Over-reliance on a single market poses significant risks.”This was said about Canada needing to diversify beyond the U.S., but it applies just as well to a small exporter with one big client –dependence on one outlet is risky. Moreover, if you’re only dealing with one buyer, they have a lot of power over you (they might pressure you to lower prices since they know you’re hooked on their orders). You don’t have leverage or a fallback if terms become unfavorable.
Real-world cases abound: for example, some agricultural exporters have gone bust when a single large overseas distributor contract was canceled. And during the COVID-19 pandemic, many firms that only traded with one country (like only China, or only the EU) were badly hurt when supply chains or demand in that country were disrupted – whereas those with a spread of markets managed better.Diversification is key to resilience. Studies on export performance note that one of the main benefits ofexport market diversification is mitigating the risk associated with dependence on too few buyers or markets. In short, don’t put all your (export) eggs in one basket.
How to Avoid It:Proactively diversify your export portfolio– both in terms of customers and regions:
- Develop multiple buyers: Even if one buyer gives you a huge order, continue marketing to others. Use channels liketrade shows, B2B marketplaces, trade missions, and online platformsto keep new leads in your pipeline. For example, attend industry fairs (in person or virtual) where you can meet importers from different countries. Register on international B2B marketplaces or e-commerce platforms to reach a wider audience. Your goal might be to have, say, 3-5 medium-sized buyers rather than one whale. That way if one reduces orders, you have others to pick up slack.Government export promotion programscan also help by connecting you with foreign buyers in various markets – take advantage of those services to expand your reach.
- Spread across regions: Try not to concentrate all exports in one country or even one continent. If you make, for instance, food products, you might target a couple of markets in Asia, a couple in the Middle East, and one in Africa rather than just, say, only the Gulf region. Different regions have different economic cycles and risks. A downturn or currency drop in one may be offset by stability in another. By having a geographic spread, you insulate yourself. Even within a region, diversify if possible (for example, don’t rely solely on one big country like just China – perhaps also cultivate buyers in Korea, Malaysia, and Australia as a mix).
- Maintain ongoing sales efforts: It’s easy to become complacent when you have one reliable export customer – the “we’re set now” mentality. Resist that. Always keepprospecting for new buyersin the background. This could mean dedicating a bit of time each week to export marketing – whether that’s cold-emailing potential distributors, improving your website SEO for international searches, or engaging on platforms like LinkedIn to make new trade contacts. Even if you can’t supply a new buyer immediately, build those relationships; you may need them in the future.
- Manage relationships but keep options: By all means, nurture your main buyer relationships – give them great service and aim for long-term partnerships. Just don’t let it be exclusive if you can help it. (In some cases, a buyer might ask for exclusivity in your country; if you grant it, make sure the volume guarantees are worth it and time-limited.) Ideally,no single buyer should account for more than 30% of your business– beyond that, you’re very exposed. If one does, consciously work to grow others to bring that percentage down.
The key to export resilience isdiversification. Just as an investor diversifies a portfolio to reduce risk, an exporter must diversify markets and customers. This doesn’t happen overnight, but keep it as a strategic priority. In the unpredictable world of international trade, having multiple streams of orders ensures thatone setback won’t sink your entire ship.
6. Ignoring Compliance and Certifications ❌
Ignoring compliance and certifications
The Mistake:Shipping products thatdon’t meet the destination country’s regulatory requirements– whether standards for safety, health, labeling, or product certifications. In simple terms, ignoring compliance. Many new exporters assume that if their product is good quality and sells well at home, it will automatically be acceptable abroad. Unfortunately, every country (and trade bloc) has its own rules about what can be imported. If you don’t follow their standards or obtain required certificates, your goods can be detained or rejected on arrival.
Why It’s a Problem:Non-compliance can kill an export deal– even if there is eager demand. Countries enforce rules to protect their consumers (and sometimes to protect local industry). If your product violates those rules, it can be refused entry, destroyed, or sent back at your cost. This mistake commonly affects exporters of food, agricultural goods, chemicals, medical products, electronics, and toys – where safety and health standards are strict. But it can also be as simple as labeling: e.g. not having the correct language or nutritional info on a food package can make it non-compliant for retail. The cost of non-compliance is huge: you lose the shipment value, you pay extra costs, and you might face legal penalties. For perspective,African countries have seen a significant number of their food exports to the EU rejected because they didn’t meet EU health/safety standards. One research study found that in the span 2008–2013, over1,100 shipments of African food products were refused at EU bordersfor safety non-compliance (such as excessive pesticide residues, toxin levels, or improper documentation). The top reasons were issues like exceeding allowed pesticide limits or presence of contaminants. Nigeria alone had 113 cases of its exports rejected in that period, and countries like Morocco and Egypt had over 200 cases each. Each of those shipments represents a financial loss and reputational hit. Likewise, many developing-country exporters have had containers of produce or spices turned away by the US FDA for not meeting requirements.Your product might be excellent in quality, but if it doesn’t comply with the target market’s rules, it’s as good as banned.
How to Avoid It:Do your homework on destination regulations and get all necessary certifications or tests before you ship.Here’s how:
- Research market-specific requirements: Well before shipping, identifywhat regulations apply to your product in the destination country. Some key areas: product standards (for example, does machinery need a CE mark for Europe? Do electronics need FCC certification for the US? Does apparel need specific labeling?),sanitary/phytosanitary rulesfor foods and agricultural goods (e.g. permitted pesticides, requirement of phytosanitary certificates, FDA registration for food facilities sending to the US), and anyrestricted substances(for instance, certain chemicals in cosmetics might be allowed in one country but banned in another). Resources to use include the destination country’s official import guidelines, your own country’s export guides, or international standards databases. The WTO and ITC maintain some online tools for checking standards. Also,consult importers or agents in that market– they can tell you the common requirements. For instance, exporters to the EU often must comply with things like REACH (for chemicals), CE marking (for electronics/machinery), and sanitary regulations (for edibles). If exporting to majority-Muslim markets, you might needHalal certificationfor food. If exporting meat or plant products, typically aphytosanitary certificatefrom your agricultural authority is mandatory.
- Obtain necessary certifications/testing: Once you know the rules,get your product certified or tested to prove compliance. This may involve things like:product testing in accredited labs(for safety standards), obtaining aCertificate of Origin(and any special certificates like SGS inspection or quality certificates if required by the buyer or authorities),Halal/Kosher certificates(if food and required by the market),phytosanitary or veterinary certificates(for plants, seeds, fruits, meats). Many countries require specific certificates to accompany shipments – make sure to secure these from the relevant authority. It can take time, so plan ahead. For example, to export coffee to certain markets, you may need a phytosanitary certificate confirming it’s free of pests; to export organic products, an organic certification recognized by the importing country. Don’t assume these are optional – if the rule says you need it, you truly do or your goods won’t be allowed in.
- Ensure packaging and labeling compliance: Often overlooked,packaging and labeling lawscan be very specific. Things like language requirements (e.g. the EU requires food labels in the language of the destination country, not just English; Canada requires bilingual English/French labels),measurement units(some countries mandate metric units), andmarkings(like country of origin marking on products or lot numbers). Also, packaging material itself sometimes has rules (wood packaging may need fumigation stamps under ISPM-15 rules). If your goods are going into retail, study the label regulations for that product category in the target market. Failure here can also lead to products being stopped.
- Work with compliance experts if needed: If this feels overwhelming, consider consulting acompliance specialist or using inspection services. There are companies that do pre-export verification of conformity (common for exports to countries that have strict import conformity programs). They’ll inspect your shipment and issue a certificate that it meets the destination’s standards. Governments like those in East Africa or the Middle East sometimes mandate such inspections via companies like Bureau Veritas, SGS, Intertek, etc., before shipping. Be sure to follow those procedures to get the certificate of conformity when required.
In summary,make “compliance checklist” a part of your export process. It might seem like extra hassle and cost upfront, but it is far cheaper than a rejected shipment. As one exporter’s mantra goes:“Compliance isn’t optional – it’s part of your product.”Build a reputation for meeting all regulations, and foreign buyers will trust you more too. The extra effort here guards your market access and keeps your good reputation intact.
7. Overlooking Payment Protection ❌
Overlooking payment Protection
The Mistake:Shipping goods internationallywithout securing a safe payment method, essentially extending credit to foreign buyers that you wouldn’t do domestically – and then suffering non-payment. New exporters, in the eagerness to close a sale, might agree to payment terms that put all the risk on them (such as shipping on open account to an unknown buyer, or accepting a weak form of payment). If the buyer doesn’t pay, the exporter is left unpaid after the goods have left their hands. This mistake is sometimes fatal to small businesses, as cash flow is king.
Why It’s a Problem:In international sales,getting paid can be trickier and riskierthan in domestic sales. You’re dealing across distance, different laws, and sometimes less recourse if a buyer defaults. Simply trusting that you’ll be paid later is dangerous if you don’t have a safety net. In fact, therisk of non-payment is one of the most cited concerns among SMEs going global– and for good reason. If you ship $50,000 of product to a foreign buyer on open account (meaning they pay, say, 60 days after receipt) and they fail to pay due to bankruptcy or fraud, you might have little chance to recover the money. Meanwhile, you’ve lost your goods and the revenue. Statistics show that globally the majority of trade is done on open account (around80% of international trade transactions are open-account), but that doesn’t mean it’s without risk – it’s just that larger firms use credit insurance or absorb losses. For a new exporter, one big non-payment can wipe you out. We’ve already seen examples earlier: exporters facing buyers who didn’t release goods or ran into financial trouble (like the Chinese exporter to Russia example) ended up in financial distress themselves. Even if the buyer is honest, cross-border payments come with challenges (bank delays, currency exchange issues, etc.). Without some protection,you’re essentially financing the buyer’s purchase and hoping they honor the invoice. It’s far safer to“protect your cash flow like your cargo,”as the saying goes.
How to Avoid It:Use secure payment terms and financial tools to protect yourself, especially with new or high-risk buyers.Here are strategies:
- Start with safer payment methods: For new relationships, try toget partial or full payment in advanceif you can – even 30% upfront can share risk. The gold standard for security is aLetter of Credit (L/C)issued by a reputable bank, which guarantees payment if you meet the terms. L/Cs can be complex, but they significantly reduce risk of not getting paid (assuming you handle the documents correctly, as discussed). Another tool is aDocumentary Collection (D/P or D/A), where you ship the goods but the documents go through banks and the buyer only gets them when they pay or promise to pay on a set date. Collections are less secure than L/Cs (no bank guarantee), but still better than pure open account because the buyer can’t get the goods without paying or accepting a draft.Export credit insuranceis also a valuable protection – it’s an insurance policy (offered by government export credit agencies or private insurers) that will pay you a large portion of the invoice if your foreign buyer fails to pay for certain covered reasons (insolvency, political issues, etc.). For example, agencies like Euler Hermes or your country’s export-import bank provide such insurance for a fee; it’s worth considering for big orders. As one guide advises new exporters:“Always use safe payment terms suited for new exporters, such as letters of credit or advance payments”. It may sometimes cost a bit more (banks charge fees for L/Cs, insurance has a premium), but think of it as buying peace of mind.
- Avoid full open account for first-time buyers: An“open account”means you ship goods and the buyer promises to pay by a certain date (like invoice net 60). This is common in trade between established partners or when the exporter trusts the buyer’s credit (often after a credit check or prior dealing). For afirst-time international customer, sending goods on open account with no safeguards is very high risk– essentially you become the financier of their purchase. If they default, you have few options, especially if they are overseas. So, unless you have credit insurance or very strong confidence after due diligence, try not to agree to open account on the first deal. If the buyer insists and you really want to make the sale, mitigate it: perhaps offer open accountonlyif they purchase credit insurance on their side, or keep the terms short (like payment in 15 days) and still maybe insure it on your side. The key is tonot expose your small business to a massive credit riskthat you can’t absorb.
- Use escrow or fintech solutions for security: In some cases,escrow servicescan be used – the buyer’s payment is held by a third party and released to you upon proof of delivery or other milestones. There are online escrow services or sometimes trade platforms that facilitate this. It can help build trust both ways. Additionally, modern fintech solutions like blockchain-based trade finance or secure online payment platforms (for smaller shipments, even things like PayPal, though fees are high, or trade-specific platforms) could be leveraged. The method can vary, but the principle is tointroduce a trusted intermediary or guaranteerather than simply shipping and praying.
- Set clear agreements in writing: Whatever payment term you use,get it in a written contract or purchase agreementsigned by both parties. Do not rely purely on informal emails or verbal promises. A contract should spell out when payment is due, in what currency, and what happens in case of late payment (interest, etc.). While a contract alone won’t get your money if the buyer is determined not to pay, it’s an important legal document if you do need to pursue collections or involve insurance. It also forces clarity – sometimes misunderstandings about payment terms can cause disputes (e.g. the buyer thought they had 90 days to pay, you expected 30 days). So be very explicit and have it acknowledged in writing.“Never rely only on a casual email promise for payment; have a formal agreement or contract to protect your rights in case of disputes,”advises one export veteran.
- Choose the right banking partner: As you grow, align with abank experienced in trade finance. They can advise on letters of credit, collections, and often have solutions for small business exporters (like forfaiting, or financing against export orders, etc.). A bank with international reach can smooth your transactions and help ensure you get paid faster. They also will check things like the buyer’s credibility when an L/C is opened.
The main point:do not be so eager for the sale that you agree to get paid “whenever, somehow.”Insist on a structured, secure payment method. Even if a buyer pushes for open account due to “trust,” you can politely explain your company policy is to use secure terms for initial orders. Serious buyers will understand that this is normal. Many actually expect to either prepay or use an L/C for new suppliers – if they object vehemently, that’s a red flag. Protecting your payments ensures that your hard work in making the sale doesn’t turn into a hard loss. Remember, an export isn’t successful until the money is in your account.
Conclusion: Exporting Smart, Not Fast
EXPORTING SMART, NO FAST
Diving into export markets can transform a business – but it needs to be donesmartly, not just quickly. As we’ve seen,rushing ahead without proper preparation can lead to costly pitfalls.New exporters often start with tremendous excitement and urgency to secure deals; however, the real success comes from combining that enthusiasm with due diligence, solid planning, and compliance at every step.
Byavoiding the seven mistakes outlined above, you dramatically increase your chances of building a sustainable global business. Do your homework on markets, vet your partners, dot your i’s and cross your t’s on documentation, know your pricing terms, spread your risks, follow the rules, and guard your payments. These aren’t just bureaucratic hurdles – they are the foundation of trust and reliability in international trade.
It’s also wise tolearn from experienced professionals and use available support. Many governments and trade organizations offer training, mentoring, or matchmaking for new exporters. Seasoned exporters can share war stories of scams averted by due diligence or payments saved by an L/C – listen to those lessons. In fact, one global trade expert put it well:“New markets present new challenges for all parties. It’s better to embrace the challenge of exporting with an ounce of caution.”In other words,prudence and preparation are your best alliesas you expand globally.
Finally, consider partnering with trusted firms that not only support exporters — but actively export themselves. AtLAKAY BUSINESS LTDA, we proudly operate as both a global exporter and a facilitator. Our team offers real-world experience in international trade, along with services such as verified buyer connections, export training and consulting, logistics and compliance support, and secure trade finance solutions like SBLC and Letters of Credit.
Whether you're new to exporting or scaling into new markets, our expertise helps you avoid costly mistakes and grow confidently in global trade.
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In global trade,knowledge is as important as courage.By exporting smart – not just fast – you build a reputation as a reliable, professional supplier. That credibility will win you repeat business and long-term success across borders. So, gear up with these best practices, take advantage of the resources at hand, and approach each deal with informed confidence. Here’s to your thriving export business and many successful shipments ahead, launched with excitement but steered with wisdom. Bon voyage in your export journey!