Global trade management (GTM) as a product and/or service represents a considerable investment for small- and medium-sized businesses. Yet successful entrepreneurs understand the need to spend money before you can make it. They also understand the old proverb that says, “to the victor belong the spoils.” It turns out the rewards of quality global trade management are worth the investment.
GTM is often represented as a software platform hosted in the cloud, according to Ohio-based Vigilant Global Trade Services. But it doesn’t have to be limited to just software. And for most companies like Vigilant, it’s not. A technology platform is just one tool to offer alongside many others.
So, what exactly does GTM cover? Its four main components are:
1. Customs Procedures and Issues
Given that global trade involves the flow of goods and services across borders, one of the primary concerns for companies like Vigilant is customs. GTM focuses heavily on customs procedures and issues for the sole purpose of making sure that supply chains are not broken. Both imports and exports should run as smoothly as possible to keep trade moving.
Customs issues can interrupt supplies even under normal conditions. But when you throw in something like the Brexit deal between the UK and EU, customs become exponentially more complicated. Without solid GTM, supply chains can be interrupted.
2. Regulatory Compliance
Every nation’s trade environment is governed by regulations. Those regulations vary from one jurisdiction to the next. Sometimes the differences between jurisdictions are minor, other times they are major. Making matters worse is the fact that regulations change much too frequently. Therefore, GMT seeks to mitigate problems by ensuring companies stay compliant.
Like customs procedures, regulatory issues can disrupt the flow of goods and services. It is far better for companies to avoid regulatory hassles now than have to clean up supply chain messes later.
3. Global Logistics
Settle all of the customs and regulatory issues and you still have to worry about logistics. How is a company going to get its products from one continent to another in a safe, efficient, and economically viable way? Who will handle shipping? How long will the process take?
GTM addresses logistics challenges through efficient tracking and analysis. It coordinates between buyers and sellers, shippers and receivers, and all of the agents in between. And when logistics run smoothly, supply chains continue uninterrupted.
4. Trade Financials
Finally, global trade involves numerous financial aspects that should never be taken lightly. Goods and services have to be paid for. Agents and contractors have to get paid. There are bids to compile, contracts to negotiate, and budgets to analyze. It can all be overwhelming to someone who doesn’t have a thorough understanding of how global trade works.
Competent GTM addresses the financials based on hard facts and solid accounting principles. It ensures that all of the company’s financial ducks are in a row. The end result are imports and exports that go off without a hitch.
In-House or Contracted Services
Companies have the option of handling GTM in-house or contracting with a partner. In the ever more specialized world in which we do business, the right option seems obvious. But either way, investing in GTM pays off in the long run. The money spent up front is returned many times via increased revenues and profits.
Any company involved in global trade should have solid GTM solutions in place. Those unable to handle it in-house would do well to take a look at outsourcing. It is worth the investment, as any successful global trader can testify.