It used to take months to transport goods from one nation to another on ships that traversed torrential seas and hurricane weather. Ships were heavily laden because one or two trips a year were all they could make.
Times have certainly changed because goods now take a few days to make the trip from one port to another, and at the most a couple of weeks.
It has become so common for people to be global consumers that most individuals don’t know where the goods they purchase are manufactured, how they got to the store, or what company made the item.
That is because many big-box stores carry a huge mixture of goods from all over the world, created by hundreds of manufacturers, and sold by dozens of intermediaries. In other words, the world has unwittingly become a global marketplace, and international trade has become the norm.
Companies in almost every country around the world love to export their goods, products, and services because it brings in money when citizens within that nation have purchased as many of the items as they need.
Rather than changing the products or services the company produces and losing a great deal of money coming up with additional designs, the business continues to produce the product and then sells it internationally.
Sometimes these foreign sales can make the company a global name, but it always makes the business an international tradesman.
Global trade is a huge business for both sides of the marketplace.
Last year the number of goods moving between countries was reported to be worth just over $2 trillion.
Considering there is an estimated equal number of goods and services that are secretly and illegally sent or provided between nations, you can see the numbers are staggering.
That is why most companies are serious about becoming global traders as soon as their business has grown large enough to allow them to participate.
International businessman and entrepreneur Sjamsul Nursalim is a good example of how foreign export business needs can play an important role in establishing and growing a domestic business.
By understanding the requirements of rubber products and services, Nursalim’s company was able to become a global manufacturer of tires relied on by automobiles around the world.
Rather than focusing on making money by importing goods and reselling them, his company produced and sold goods.
Read also: How to Travel The World and Make Money
On the other side of the market are imports.
For those countries that cannot supply all the essential or desired items for their citizens, imports are vital.
It could be lumber, iron, rubber, food, or an almost endless supply of raw sources that nations do not have the ability to produce within their boundaries or the countries they conquered. And when that happens, the trade becomes essential to provide a high quality of life for the citizens within that nation.
While it was once essential for the natural resources to be imported, times have changed the way businesses view imports a well.
Although you may wonder why there is a distinction in raw sources and produced items, the difference in products is vast.
Most consumers do not see the raw sources that are sent to a country because the goods are used by that nation to produce items that are then sold to consumers.
When already completed or constructed items such as shoes, clothing, or automobiles are imported into a country, the goods can be identified by the consumer as foreign, and this can have an advantage or disadvantage in the world of sales – depending on the type of marketing done for that product.
The absolute advantage a company has in producing a surplus of goods is dependent on their natural raw resources, the labor force, the knowledge born of generations of experts, and the need for those products by other countries.
An example would be the ability of France to produce wines or Italy to make olive oil. And although other countries can produce like goods, and often do, there is no comparison to the quality and expertise that generational knowledge has created for those countries.
The comparative advantage of a product of one country can be seen as an opportunity for another.
If you know what a country has to give up making to focus on something else, then your company can step in and produce the missing item. As France produces wine, it may not be able to make shoes or grow rice; thus, other countries can export those goods to France at a significant profit.
The world has shrunk when it comes to global trading because it is a part of most large company business plans now, instead of being an exception. As consumer’s needs include bigger, better, and more, the global trade market will continue to expand – it has no choice.