A Guide to Exporting Successfully from Mexico to the Lucrative US Market
Given proximity and advantageous trade pacts, exporting products from Mexico to the USA offers huge potential for Mexican businesses to build revenues. America’s potent consumer market presents a natural export destination. With proper planning, Mexican firms can tap into the robust demand from US retailers, distributors and consumers. This comprehensive guide covers key factors for developing a winning export strategy from Mexico to the USA.
Analyze the Best US Product Opportunities
Research which products experience high demand from US importers along with categories where Mexico can compete effectively. Top current Mexican exports in demand include: vehicles and auto parts; electrical machinery, appliances; medical equipment; oil and gas industry equipment; furniture, lighting, toys; foods like beer, fruit, vegetables. Be sure to select items where you can achieve the price-points and product quality standards sought by US buyers and importers.
Understand Legal and Tax Obligations
It is crucial to consult Mexican and US trade regulations to ensure compliance, especially for restricted products like pharmaceuticals or foods. Get your business properly registered in Mexico and understand all documentation, licensing and labelling needs upfront to avoid issues. Doing this diligence will prevent legal problems that could significantly delay or completely halt your exports to the USA.
Leverage Advantages of Trade Agreements
Exporters can benefit from reduced US import tariffs, reduced quotas and other incentives under free trade agreements like USMCA between Mexico, USA and Canada. Be sure your goods meet rules of origin requirements to qualify for preferential rates. Get origin certification documents from your local chamber of commerce. Properly utilizing trade pact benefits can make your pricing much more competitive in the US market.
Pick the Optimal US Distribution Method
Carefully research the pros and cons of selling directly to US importer companies versus using intermediaries like export management firms, brokers or wholesalers to enter the US market. Attend some US trade shows to make connections with potential buyers and channel partners. Also consider e-commerce platforms and digital marketing to directly reach US consumers without intermediaries. Choosing the right market entry approach for your specific products and resources is crucial.
Master Logistics for Smooth US Delivery
Analyze various freight options for transporting your goods from Mexico to the US border crossings and inland destinations cost-effectively. Choose faster, cheaper transportation modes and routes whether by sea, rail, truck, air or combined methods. Hiring experienced customs brokers can help ease and expedite crossing US border points which are often pain points. Having streamlined shipping and customs clearance prevents delays that can cause you to lose sales or return orders.
Adapt Products for US Requirements
Take time to modify your goods to meet different US technical standards, regulations, warranty expectations, voltage requirements, labelling needs etc. American consumer preferences and tastes may also require some product adaptations. Making the necessary adjustments will ensure you fully comply with US norms and prevent losing sales due to products unsuitable for the market. Understand the precise product tweaks needed upfront.
Monitor Exchange Rate Shifts Closely
Since your exports will be priced in US dollars, you must stay closely updated on peso/USD exchange rate shifts and volatility. Use available currency hedging instruments to protect against forex fluctuations eroding your profit margins. Be ready to adjust your USD export pricing when necessary to remain competitive in the US market as currency rates change over time. Don’t let forex swings catch you by surprise.
Conduct US Competitor Research
Carefully analyze US and other foreign competitors already selling similar products domestically. Track their pricing, product quality, brand reputation, promotional strategies and identify potential advantages your offering may have to win market share from them. Emphasize your unique strengths in marketing to US buyers and importers. Know precisely how you’ll differentiate your offering from current rivals in the market.
Leverage Digital Tools and Data
Harness e-commerce platforms like Amazon, develop US-targeted websites, make use of social media marketing and online advertising campaigns to directly reach US business and consumer audiences. Use available data to identify untapped geographic US markets or demographic targets for your exports. Develop digital marketing assets tailored specifically for US buyers, not just translations from Spanish. A strong digital strategy is key for broad reach in the US market.
Exporting from Mexico to meet America’s nearly $22 trillion in annual consumer spending and business purchasing offers huge potential for Mexican firms to significantly grow revenues. Leverage Mexico’s manufacturing strengths and utilize trade advantages with the world’s largest economy next door. Just execute a focused, well-planned export strategy accounting for every key step required to prosper in the complex but lucrative US marketplace.
Mexico’s Exports to the USA Keep Climbing
Mexico continues expanding exports to its largest trade partner, the United States. Total exports to the USA grew over 80% in the past decade, from $204 billion in 2010 to $371 billion in 2020. As a percentage of Mexico’s total exports globally, the US share increased from 77% to 80% over the same period.
Several factors fuel Mexico’s export growth to the US market. Reduced tariffs under NAFTA and now USMCA boost cross-border trade. Just-in-time delivery integration between factories boost exports. A competitive peso compared to the US dollar makes Mexican goods affordable for US importers. Proximity and good transport links also facilitate exports north.
Top Mexican Exports to the USA
While oil was once Mexico’s top US export, manufacturing now leads export growth. Vehicles and auto parts are #1, totaling over $100 billion annually. Electrical machinery, medical equipment, and computers are also fast-growing Mexican exports to the USA.
The abundance of lower-cost manufacturing capacity in Mexico attracts American firms. Many operate factories in Mexico known as maquiladoras specifically targeting the US market. Agricultural products like beer, fruit and vegetables also show sizable US export growth.
References:
https://www.justice.gov/oig/reports/2012/s1209.pdf
https://www.justice.gov/oig/reports/ATF/e1101.pdf
https://www.trade.gov/us-mexico-trade-facts
https://oec.world/en/profile/bilateral-product/mex/usa
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