The Supplier’s Guide to Understanding International Trade

Who is a Supplier in the Trading of Goods and Products?

A supplier is someone who provides a commodity/product to the consumers and end-users. Suppliers are a crucial part of the supply chain in most types of businesses. They are the real providers of any given commodity or product people are buying.

Understanding International Trading

What is International Trading?

International trading aims to remove barriers when it comes to buying and selling products on a global level. It’s because of international trading that a customer can find American products in an Indian market and Costa Rican bananas in an American supermarket aisle. International trade has made it possible for consumers to buy Brazilian coffee and Italian wines anywhere in the world.

Global trading gives countries a chance to expand their market outreach and get access to services/goods that are otherwise domestically unavailable. Because of this, global trade has continually become more fierce and competitive, especially in this age of technology. It’s because of this competition that products can sometimes become cheaper in certain parts of the world with more competitive prices.

International Trading in the 21st Century

The world economy entered the twentieth century with the freest flow of goods, services, and capital in human history a century ago. Global output and trade had increased at an unprecedented rate in the previous century, and easy access to various products in Europe and North America have risen at a rate never seen before in human history.

Revolutionary technologies and cross-country flows of commodities, know-hows, investments, training, ideas, and people are transforming international trading in the twenty-first century. It's imperative to understand its evolution and patterns in order to predict the effects on economies and workers in the future.

International Trading (Projected Growth)

According to the WTO, the predicted merchandise trade volume witnessed a growth of 10.8% in 2021 which was up by 0.8%. This followed another rise of 4.7% in 2022. The growth rate is likely to moderate as trades approach their pre-pandemic trend.

Supply issues like port backlogs may affect the supply chain in certain areas. However, they are likely to have a bigger impact on global aggregation. Pandemic itself continues to remain the biggest threat to international trade in coming years.

Benefits of International Trading for Suppliers

More Revenue

One of the biggest advantages of global trading is that sellers get to expand their horizons and attract new clients. When your product starts selling in a targeted country, you’re basically opening up new pathways for higher revenue and business growth.

According to the 2016 Index by FedEx Trade that surveyed over a thousand small businesses, most business leaders engaged in global trade agreed that they were growing faster than ever. They were hiring more employees compared to small businesses that chose to stay stateside.

About 65% of businesses said that the revenue had increased compared to 46% of businesses that didn’t do any sort of international trading.

Also, businesses engaged in global trading were 20% more likely to hire more employees. Respondents were mostly executives and business owners at a company with two to 500 employees.

Decreased Competition

It’s possible that within a territory like a state, there may be fierce competition for a product in a crowded market. But, while tapping into international markets, the competition may be less in other countries. In this way, companies can fetch better pricing for their products and create a bigger profit margin.

Longer Product Lifespan

Let’s say a brand sells an American product. There may come a time when newer, upgraded product versions come into the picture and American consumers stop buying that brand’s product. However, in overseas markets where people actively seek American products, the brand can easily extend its existing product’s life.

Global Reputation

By trading on a global level, the business naturally gets a boost in reputation. It suggests the business’s influence in other countries. Over time, this can help to raise the company’s profile within the niche market.

Selling across international markets can also enhance a company’s credibility both at home and abroad. Global reputation is one aspect of international trade that is difficult to quantify/measure and therefore easier to ignore.

Plenty of Opportunities to Specialize

Being exposed to the international markets can offer plenty of opportunities to launch new lines of products and services. Sellers get to specialize in a different area that serves a particular market.

Being active in an outside world (somewhere besides homeland) may spark innovations, better efficiencies, and newer upgrades. There's no telling what new ideas might come to the mind based on the experiences and feedback coming from outsiders.

Getting Started With Finding a Global Trading Partner

There are plenty of ways businesses can go about finding a trustworthy global trading partner. Here are a few:

  • Trade Shows - Trade shows continue to remain one of the most promising avenues at which to connect with potential partners. Businesses can attend trade shows in the US or in the target market where they plan on expanding.
  • Trade Associations
  • Government Resources - Government websites like the chamber of commerce are always a great source of information.
  • Online marketplaces like Google, Alibaba, AliExpress, and others.

If nothing else, a business can always use its existing network to explore new opportunities.

As a business, if you’re unsure whether or not you’re ready for international trading, you can check out resources at ITA (International Trade Administration). Additionally, you can also check your export readiness by taking this assessment.

About ATI (American Trading International)

Over the decade, American trading International has created 30+ private-label products including direct retailers and top importer distributors. 

The company maintains more than 2,000 SKUs that work dedicatedly at maintaining private labels from 50 core manufacturers. With such potential, ATI has all the capabilities and more to help a business with all of its private-label needs.

Questions on what ATI can do for your company or product? Call us today at +1 (310) 445-2000 or fill out our form on the contact us page.

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