U.S. small businesses increase revenue exporting to China

January 15, 2014

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If you think only large U.S. corporations export to China, you’re wrong. Small businesses export as well.

Money.cnn.com recently profiled five small businesses that currently are exporting their products to China. These products include wine, air purifiers, wallpaper, explosives detection devices, and toys.

Apparently American wine has become a hot commodity in China, where consumers want a taste of American culture. San Antonio Winery, Los Angeles, exports 15 percent of its wines to China—some 700,000 bottles annually— and expects the volume to increase.

Wallpaper? Who knew that something as passé in the U.S. as wallpaper would be so popular in China? Jack Collins, vice president of Wallquest, Wayne, Pa., said that because the industry has not been growing in the U.S., the company ventured into China in 2005. Now, about 30 percent of its revenue comes from sales in China and the company has more than doubled its workforce.

Wallpaper, wine … one might be surprised that these American-made items are popular in China. Air purifiers are another story. Based on what we know about China’s air pollution, exporting air purifiers seems like a slam-dunk. What may be surprising is that high-end purifiers are selling so well.

Peter Mann, founder and CEO of Oransi, which manufacturers air purifiers in Austin, Texas, developed a line of high-end purifiers—costing $2,000 to $3,000 each—specifically for the China market. Mann said selling to China could help double his company’s revenue from $3 million in 2013 to $6 million this year. And he’s thinking about developing a line of less expensive purifiers to sell in China as well.

These exporters are part of a growing trend among small businesses. The 2013 Small Business Exporting Survey, conducted by the National Small Business Association (NSBA) and its council, the Small Business Exporters Association (SBEA), “found a notable increase in the number of small-business owners who report they export their goods and/or services. Furthermore—and perhaps even more promising for U.S. global trade—there was a marked increase among non-exporters who said they would be interested in starting to export their goods and/or services from just 43 percent in 2010 to 63 percent today.”

The survey also showed that more companies are exporting to China, Mexico, India, and Brazil than were three years ago, while Canada remains the No. 1 country of export for U.S. small firms.

The survey noted the challenges to exporting—the time and money spent preparing to export; concerns about getting paid; and navigating the overly complex U.S. system and assistance.

Nevertheless, exporting can be worthwhile … something small businesses are learning. As the NSBA said, “U.S. exporting typically conjures images of large, massive firms, there is without a doubt an important and growing role small businesses play. Small exporting firms actually account for 98 percent of all exporting firms and 33 percent of U.S. exporting value, according to the U.S. Census Bureau. Not only is small-business exporting important to the U.S. economy, exporting is important to small business: the International Trade Commission calculated that small exporting firms averaged 37 percent revenue growth between 2005 and 2009 compared to the decline of seven percent for non-exporting firms.”

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