7 steps to export your products from Mexico to the world

For Small and Medium Enterprises (SMEs) exporting their products or services to other countries provides multiple benefits. Expand business opportunities, their markets and obtain greater financial stability, are just some of them. Likewise, for the countries that participate, it is beneficial not only because of the movement of foreign currency, but also because of the sources of employment it generates.

Mexico is a country that is characterized by exporting a large number of products. According to the World Trade Organization (WTO), it is considered one of the main world powers in terms of exports. In June 2020, it had 13 free trade agreements in 50 countries.

However, for some companies this type of commercial exchange may present some legal, bureaucratic or financial inconveniences. Financing, on time, is a frequent dilemma in SMEs, given that the lack of liquidity can jeopardize their presence in the market.

Fortunately, for this type of situation, there is a very useful tool called factoring that is responsible for offering liquidity of funds to its clients to allow them to continue with their commercial operations.

The factoring service in Mexico is very beneficial for a country with a strong export activity, since it allows companies to sell their products abroad without exhausting their working capital.

What is factoring and what are its benefits?

Factoring is a financial service that some companies use to have liquidity immediately. The exporting company sells its invoices receivable to a financial entity that offers cash and immediate payment of its client’s debt.

Three actors are involved in this financial operation: The supplier of the product or exporting company, the financial entity (also called factor) and the client.

  • What types of factoring exist?

Factoring can be with or without recourse. We speak of factoring without recourse when it is a service in which the factor takes the debt receivable from the exporting company and manages its invoices, assuming the risk of non-payment by the client or buyer.

In this situation, the exporting company avoids running the risk of not collecting or collecting in the long term the total value of the operation, being able to continue with its financial circuit.

Recourse factoring, meanwhile, works differently. It is the seller or exporting company who is in charge of managing the invoices receivable and who assumes the risk of non-payment. Therefore, the factor in this case is only responsible for carrying out the payment of the cash invoice and then managing its collection.

  • What are the benefits for SMEs?
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Among the multiple benefits that we can describe of this financial tool, we find that: It promotes the growth of the company by offering funds immediately, it reduces the risk of loss, it guarantees the collection of products sold, it optimizes working time (management and the follow-up of the issued invoices will no longer be the responsibility of the exporting company) and reduces costs (opportunity, financial, etc.).

Steps to export

As we mentioned before, exporting is a commercial activity that helps companies enter the international market and make their products known. It can generate some uncertainty to bet on something so big and for that there are financial services such as factoring that can be used as a backup to obtain liquidity and reduce risks.

Now, once the financial uncertainty is covered, it is necessary to know perfectly the steps that must be followed in order to be able to carry out the export process neatly and avoid all kinds of inconveniences.

Before starting, it is important to clarify that there is no single way to carry out an export process since it will be subject to variables such as the type of products, the country of origin, destination and other external factors that may have an impact.

However, in general terms we can detail the following steps:

  1. Have a company established

That a company is legally constituted, refers to the fact that the brand must be registered and registered with the Treasury (as a natural person or as a legal person). Carrying out this registration is necessary to comply with non-tariff regulations and restrictions such as permission to export products, labeling, quality controls, etc.

Failure to do so takes away the seriousness of the company and limits its access to sources of financing.

Hand in hand with the registration of the brand, it is necessary to process the Federal Taxpayer Registry (RFC), the CURP, and the Advanced Electronic Signature (FIEL).

  1. Define the product and the destination country
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When thinking about a business, it is essential to carry out a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) to reduce the risks and to maximize the opportunities that can favor the company.

Choosing the target audience (in this case international) can be a challenge in which, if the necessary information is not available, the results will not be as expected. For that, it is necessary to know: the tastes and preferences of consumers in that market; the type of economy of that country and the financial trends of consumers; adaptations that the product may undergo to meet the needs of that region; requirements demanded by the country for imports; distribution and price strategies, analysis of internal and external competition, etc.

  1. Know the tariff and non-tariff regulations and restrictions

Tariff regulations are taxes required at customs for those products that are imported or exported.

On the other hand, non-tariff regulations are the measures taken by each government to regulate the entry and exit of international merchandise. The objective of these measures is to protect national economies, ensure continuity in the market for goods produced in the country, and verify the quality of incoming products.

  1. Have mandatory documentation

For the export process, it is necessary to have certain mandatory documentation. It does not present major complications to acquire each of the documents and it is essential to have them on hand in case they are requested at customs. It should be noted that, although there are a series of common documents, there are others that depend on what the country of destination requests.

According to the Ministry of Economy of Mexico, the necessary documentation is: Federal Taxpayers Registry (to be able to invoice electronically, request certificates, etc.), Registration in the exporters register, Intellectual Property Registry before the IMPI (to protect the rights of intellectual and industrial property), Registration in the Mexican Business Information System (used to promote those exportable products with high demand in the international market); Registration in the Mexican Business Information System; Authorization for the use of the “Hecho En México” brand (which allows the government to promote products of national industry).

  1. Choose the indicated packaging.

This is merchandise that will be moved for several days and different means of transport. Guaranteeing the integrity of the products at the requested destination is partly the responsibility of the exporting company.

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To achieve this, it is important to choose a package that resists shocks, humidity, temperature changes and the misfortunes that it may suffer during the trip.

  1. Select a safe transport

As with the packaging, it is necessary to choose a good transport that guarantees the integrity of the product to be exported and therefore customer satisfaction. For that, it is necessary to carry out an analysis of the available means of transport and to know their benefits, costs, etc.

Some of the means by which you can choose are rail, plane, truck, ship or a combination of any of them. In any case, before choosing the transport it is necessary to know the preferences of the client and how he prefers to receive his products.

Reliability is not a minor point to consider if we talk about the transfer of large quantities of goods. For this, it is necessary to know the storage centers and the ports through which the products will circulate.

Last but not least, having indemnity insurance against loss or damage suffered by the goods during shipment is vital to avoid significant losses for the company.

  1. Perform the Customs clearance process

This process consists of presenting the merchandise at customs along with documentation that must be previously digitized. Exporting companies can electronically generate the export request and then upload it (along with other documentation) to the Foreign Trade page of Mexico. In this way, when physically presenting the merchandise to the customs authorities, they will do so with a copy of the request made digitally.

In conclusion, venturing into the export of products helps to enter international trade and give rise to a series of opportunities that allow the company to expand its market. Of course, doing it sensibly and with the correct information can ensure the success of this activity and the continuity of our operations.

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