The First 5 Things an Australian Company Should Do When Exporting to the US

The American market represents an enormous opportunity for Australian exporters.

With its enormous consumer base and diverse industries, the USA can significantly scale your business. But simply shipping your product in a DHL box isn't enough.

Successful US market entry requires careful planning and execution. Here are the first five crucial steps Australian companies should take when looking to export to the United States.

1. Thorough Market Research and Niche Identification of US Market

Before you even think about shipping containers, you need to deeply understand the US market. It's not a monolith. Consumer preferences, regulatory environments, and competitive landscapes can vary significantly by region.

• Identify Your Niche: Don't try to appeal to everyone. Pinpoint a specific segment of the US market that has a clear need for your product or service. Who is your ideal customer? What problem do you solve for them? Start with a small sector and work on that. Pace yourself and be patient. It's easy to get overwhelmed with the massive market size of each sector or niche.

• Competitive Analysis: Who are your existing competitors in the US? What are their pricing strategies, distribution channels and marketing tactics? How will your offering differentiate itself from others? What are your advantages? Lastly, have you worked with any customers that are known in the US? This helps a lot.

• Cultural Nuances: Even with a shared language, cultural differences can impact product perception and marketing effectiveness. Research how your product or brand might need to be adapted for American customs.

  
  

This foundational research will inform every subsequent decision and prevent costly missteps later down the track.

2. Understand and Comply with US Regulatory Requirements & Standards

This is perhaps the most critical and potentially complex step. The US has a vast array of federal, state, and sometimes even local regulations that apply to imported goods. Non-compliance can lead to severe penalties, product recalls or even outright rejection at the border.

• Product-Specific Regulations: Depending on your product, you might need to comply with agencies like:

  • FDA (Food and Drug Administration): For food, beverages, cosmetics, pharmaceuticals, medical devices, and some electronics.

  • USDA (United States Department of Agriculture): For agricultural products, meat, and poultry.

  • CPSC (Consumer Product Safety Commission): For general consumer products, ensuring safety standards.

  • FCC (Federal Communications Commission): For electronic devices that emit radio frequency energy.

• Labeling Requirements: US labeling laws are stringent and often differ from Australian standards. Pay close attention to ingredient lists, nutritional information, warnings, and country of origin marking.

• Intellectual Property Protection: Before launching, ensure your trademarks, patents, and copyrights are protected in the US. Registering with the USPTO (United States Patent and Trademark Office) is crucial.

  
  

Engage with US customs brokers, trade lawyers, or regulatory consultants early to ensure full compliance. G'day Gateway has connections with people if you need help!

3. Strategize Your Logistics, Shipping, and Customs Clearance

Getting your product from Australia to US customers efficiently and cost-effectively requires a well-defined logistics strategy.

• Incoterms: Clearly define the responsibilities and costs between you and your buyer using Incoterms (e.g., FOB, CIF, DDP). This determines who pays for what, and at what point risk transfers. For more info, check https://www.trade.gov/know-your-incoterms

• Shipping Method: Evaluate air freight (faster, more expensive) versus sea freight (slower, way cheaper) based on your product's shelf life, value, and customer demand. Keep in mind, delays at the border and with customs are common, so keep that in mind when quoting lead times to your customers.

• Customs Broker: Partner with an experienced US customs broker. They are invaluable for navigating import duties, tariffs, customs declarations, and ensuring your goods clear customs smoothly and quickly. They can also advise on specific documentation required for your product. Make sure you are on top of your emails, as customs storage fees for your product can be very costly, and if your customs broker needs information, you will need to respond quickly to avoid storage fees. Or talk to us at G'day Gateway, and we can assist so you don't have to worry about costly customs storage fees.

• Warehousing & Distribution: Consider if you need a US-based warehouse or a third-party logistics (3PL) provider to handle storage, order fulfillment, and last-mile delivery. This can significantly reduce shipping times and improve customer satisfaction.

  
  

4. Understand US Payment Systems and Financial Management

While international transfers are possible, having a clear strategy for receiving payments and managing finances in the US is vital for efficiency and credibility.

• Payment Gateways: If you're selling online, ensure your e-commerce platform integrates with popular US payment gateways (e.g., Stripe, PayPal, Square) and can accept US credit cards. This means enabling US addresses for billing information too, as it is frustrating for US customers who need to put in a 7 digit ZIP code in a 4 digit Post Code form.

• US Bank Account (Eventually): While not strictly the first thing for pure exporting (you can receive international wire transfers), opening a US bank account will eventually become crucial for managing local expenses, receiving direct deposits from US customers, and establishing creditworthiness. Research options that cater to foreign businesses. You can also open a USD bank account with your Australian bank (Commonwealth Bank offers this, amongst others).

• Currency Exchange Strategy: Develop a plan for managing currency fluctuations between AUD and USD to protect your profit margins.

  
  

5. Develop a US-Specific Marketing and Sales Strategy

What works in Australia may not resonate with American consumers. A tailored approach is essential.

• Localized Messaging: Adapt your branding, messaging, and visual content to appeal to American cultural norms and preferences. Avoid slang or references that might not translate.

• Digital Presence: Ensure your website is optimized for US search engines and consider US-specific social media campaigns.

• Sales Channels: Will you sell directly to consumers (DTC e-commerce), through distributors, retailers, or a combination? Each has its own implications for sales efforts and margins.

• Pricing Strategy: Research competitive pricing in the US market, factoring in import duties, tariffs, shipping costs, and your desired profit margins.

Exporting to the US is a significant undertaking, but with diligent preparation and a clear understanding of these initial five steps, Australian companies can confidently unlock the vast potential of the American market. Good luck with your expansion, and let us know if you need any help. We offer consulting services too!

Want to know the biggest things Australians get wrong about expanding to the US? Click here.