What constitutes Latin America? Many countries make up Latin America as a whole. There is Mexico, Cuba, Bolivia, Puerto Rico, Colombia, Brazil, Argentina, Guatemala, Dominican Republic and many more.
Some of them are real financial hubs due to the fact they encourage the establishment of offshore companies while some of them are leftist in political and business agenda and therefore for a businessman who is looking forward to doing business there, it is important to choose the country that they want to invest in with care.
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One thing that seems to faze the US and European businessmen out of the Latin American countries is the leftists governments that give them tough choices. They must either change the way that they do business or go. However is all lost? According to the news doing rounds in the world and on the internet, the truth is that in most populist-led Latin American countries, the governments of the day have tightened their control on natural resources or if you like, the raw materials and this has forced many multinational companies to think again. In addition, the recession that has hit north, south and central America recently has made a very unfriendly business environment for the European and American businesses.
The outlook might look grim, but all is not lost. here are a few tips to do business with companies in Latin America
Choose your country with care. For example, if you are in the US OR Canada, then it would be smarter of you to do business with companies in Mexico for a few handy reasons. For many reasons, many people consider Mexico as the best manufacturing hub, even better than china. While labor is cheap in china, in Mexico you will pay slightly more, but you will get better engineered products because the labor force there is amply trained and educated. You see, the proximity of Mexico to the US makes it a very good option for many people.
The policy for doing business with Mexico is very friendly especially as Mexico is a member of the NAFTA (North America Free Trade Association). As a trading bloc, there are so many advantages of trading with Mexican exporters and many companies have taken this advantage. For example, Mercedes Benz has established its business there and today, they produce the Atego, M-Class, A-Class, C-Class and others from parts all made in Mexico. These vehicles are sold in North America and Europe.
Choose one region at a time for doing business. Do not gobble up everything because you will end up disappointed. For example, if you want to market your products in South America, you have to first identify the target market for the goods in a small place and then work from the bottom up. As business grows you and later on expand. You see, in Latin America, business is very personal and every business region has a different business culture. For example, the combination of Chile, Argentina and Uruguay is considered as the Southern Cone while the Andean cone comprises of Venezuela, Peru and Colombia. So you see, if you want to tailor products for the Andean Pack you would may be use different methods from what you would use for the Southern Cone. Find what products or services the market region you have in mind needs and then focus on that.
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One more thing before you go into business there, please note that the Latin American economies rely on commodities mostly. Maybe you will want to focus on that first before you can go to services and industry. However, note that there are growing opportunities for these businesses too and therefore you may want to look at it. Whatever you do, before you can do business with any of the Latin American companies, research is the key. You need to know the demographics, the state of the economy, the political risk and so forth.
Consider several methods of doing business in Latin America. Different methods have different risks and therefore you may want to consider the one that has the least risk. For example, you may want to consider a joint venture where you will set up your business with a local party. You may also consider contracting local individuals to do your business for you. Sheltering is where you can be under the cover of a local business or company that knows the market well, yet at the same time you are operating independently. There are many shelter service providers and working with them is an advantage because you will not have to have assets as the shelter provider will provide that.
other options available include subcontracting, wholly owned subsidiaries and outsourcing. Your mandate is to find out what every option offers before picking on one.
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This section is very knowledgeable and full of guidance for those who are willing to do business with Latin America.