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Risks to be aware of with International Trade

There are plenty of great reasons to trade internationally as a business. First and foremost, working with more countries around the world will naturally open you up to a wider and bigger client base – which if managed effectively could see you taking on more business.

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As well as this, you can also find more opportunities to develop and improve your operations, be it finding more affordable trading partners, or indeed resources to use with your company. Whatever preferences you would have though, it’s fair to say that there are risks involved with international trade of which you should be aware. Below you can find a few examples of what these risks are:

A Fluctuating Exchange Rate

As the majority of business owners will appreciate, the exchange rate is often difficult to predict. The amounts are continually changing and the obvious risk here is that you end up paying more over time as your prices – and supplier’s prices – change with the rates. Equally, if this isn’t monitored you also risk failing to invoice the correct amounts.

Communication Barriers

The different language barriers can also prove problematic around the world. Cross-cultural communication can be difficult due to differences in language conventions and expectations. What’s more, discussions can get lost in translation and you may end up over or underdelivering on what was verbally agreed.

As a result, it is important for companies to be aware of these disparities and take steps to mitigate such issues. A reliable translator — such as those found at Stoquart — can likely offer the required help. Due to their grasp of multiple languages, they can ensure that important conversations are accurately conveyed between parties, eliminating the possibility of misunderstandings or misinterpretations of what was said.

Political and Social Unrest

A number of nations unfortunately also face political and social unrest that can lead to problems with trade. You only need to look at the current situation in the UKwith the recent Referendum. Should they leave there will be significant ramifications on trade, as preferential agreements will no longer be in place between the UK and the other EU nations.

Differing Attitudes to Business

Lastly, beliefs and attitudes can also be different on the continents. This can make meeting new clients or discussing ideas more difficult. Without a little cultural understanding as well you risk upsetting or offending people if you don’t adhere to their way of doing business.

While all this might seem like quite a headache, the reality is that with the right research and appreciation, you can help avoid or eliminate some of the above risks. There are also alternatives like using expert assistance from international logistics companies like TNT Direct, or again hiring those with local knowledge to assist you in your overseas endeavors.

Image courtesy of iStock

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