The shares of groups that enhance the amount of dividend commonly outperform the shares of businesses that lessen their dividend. Since investors typically punish the shares of businesses that lessen their dividend in successive years, the control of a company that decides to increase its dividend is thought to sign to traders that it’s miles to earn sufficiently better profits inside the coming years to fund higher dividends. This undoubtedly impacts the organization’s percentage rate as investors emerge as a greater willingness to shop for the proportion, awaiting an upward push in earnings.
There wouldn’t be Indian spices, clothes, or jewelry in the United States without trade finance. Or Apple’s iPhones in China, much less any other international product at any respectable distance from its origin. In fact, according to Investopedia, the World Trade Organization (WTO) estimates that international world trade has expanded 80%-90% thanks to trade finance. For this to continue, companies need to include trade finance in their business development strategies. How do you do that? Learn how you can incorporate trade finance into your business development strategy.
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Incorporate Inland Trade Finance in Market Penetration, and Market Development Market penetration and market development are key parts of a business development strategy. Market development involves selling more of your service or product to repeat customers.
While market penetration is about expanding your product or service to other cities and provinces, it can involve inland trade finance. You may have to renegotiate local and provincial trade deals. For instance, let’s say you sell jewelry. A business from a neighboring city may purchase your jewelry and sell it to its customers.
You have a long history with this client. And know that your product is selling quickly in your customers’ shop. In which case, you could propose selling the client more jewelry for a bulk price. After negotiating, the client agrees. However, despite the long, positive history you’ve had with the client, the client may not feel comfortable paying you before exporting the jewelry. This is where a trade financier or banking institution comes in, providing a letter of credit promising that you will export the jewelry upon payment.
Consider the Internet and Brick-and-Mortar Stores
If you’re already selling more of your product or service to clients, perhaps it’s time to branch out to another channel, such as the Internet?
If you run a successful e-commerce store, maybe it’s time to start a brick-and-mortar store as well?
That way, your customers have more options where to buy your products.
Especially when it comes to brick-and-mortar stores, trade finance can help you secure new import and export trade deals-especially when there are multiple currencies involved.
Creating a New Product or Service for Repeat and New Customers
With repeat customers, you’re doubling the number of products the repeat client is importing. And, with new clients, your new product or service will expand your client base. It’s important that you first create new products for your repeat customers before jumping to new customers, as it involves more risk.
As well as finance the conversion of raw materials into products, along with other customized finance products. To promote trading activities, STF products are extended across the supply chain. Limited recourse trade finance lines sponsor STF structures. The structure aims to offer better security mechanisms and act as an enhancement on the borrower’s position when viewed in isolation.
Again, trade finance can help cultivate more trust during this period of growth. Since trade financiers or banking institutions can create letters of credit, laying out the terms the importer and exporters must follow.
Final Thoughts About Your Business Development Strategy
Know that growth doesn’t happen in a day; it’s harder for businesses to jump from market penetration to supplying new products to new clients. This is why we recommend that you approach growth slowly. However, know that trade finance may help increase the number of clients you trade with, no matter where they are.
What’s your take on trade finance? How has it helped your business? Please share your thoughts, comments, and responses with us. Adam Smith Associates Pvt Ltd is one of India’s leading Trade Finance companies, performing the business of arranging the finance and providing consultancy, advisory, structuring, and management services relating to finance transactions. One of its main expertise is in commodity finance.
Adam Smith Associates work hand in hand with Indian and International corporations and banks to manage complex finance structures. Its corporate office is located in New Delhi – the capital of India, while one of the branches is at Indore. Internationally its affiliates are based in Singapore, Dubai, Hong Kong, Tokyo, and Nigeria.
Structured trade finance (STF), a type of debt finance, is used as an alternative to conventional lending. This form of finance is utilized regularly in developing countries and relation to cross-border transactions. The objective is to encourage trade by making use of non-standard security. STF is generally used in high-value transactions in bilateral trading relationships. As a more complicated type of finance, STF is commonly related to commodity trading.
Within the commodity sector, STF products are most prevalent. It is used by producers, processors, traders, as well as, end-users. Banking organizations tailor these financial arrangements to meet the precise needs of the clients. STF products are primarily working capital financing, warehouse financing, and pre-export financing.
Some institutions extend reserve-based lending and finance the conversion of raw materials into products, along with other customized finance products. To promote trading activities, STF products are extended across the supply chain. Limited recourse trade finance lines sponsor STF structures. The structure aims to offer better security mechanisms and act as an enhancement on the borrower’s position when viewed in isolation.