Dollar-earning in Colombia: Exporting

Here is what I wrote in bullet point 6 in my article on 9 Ways to Earn Dollars in Colombia:

“Exporting. Because of the protectionist policies of the Colombian government, there is a big local production of many things that qualify for exportation:

1. Agricultural products like coffee, sugar, exotic fruits, avocados, quinoa or flowers.
2. Become an international distributor of Colombian brands like Leonisa underwear, Agua Bendita swimwear or Michú designer bags. Those are just a few, there are many more to choose from. Search and you shall find.
3. Create your own product to export. Labor is cheap and quality raw materials available. These guys are in the middle of creating organic sodas. Although they plan to start selling locally, the strategy is to begin exporting eventually.”

Most overseas exports anywhere in the world are (still) settled in dollars. With the dollar still hovering above $3.000 pesos, right now represents best time in the last 15 years to be exporting from Colombia.

Before beginning any kind of exportation, it’s worth analyzing the market that you wish to export to. Here are some of the important questions that you will need to answer to figure out if the product you have in mind qualifies for a given market:

• How are the consumer or B2B habits of your target market?
• Who will your customers be and how will you reach them? Will you open a shop, be a distributor, sell online, etc.? Having a business plan that includes a marketing plan with a budget is a smart idea.
• Is there a demand for your product? Selling swimsuits in Denmark is a bad idea. Although surrounded by the ocean the seasons are too short. Maybe it’s a different story in Hawaii or Australia?
• Do the consumers have sufficient purchasing power? Probably not in Bangladesh, but maybe in Germany.
• What about competition? Who are your competitors and what do they do well/not so well?
• How will you be competing – on quality or price?
• Are there any free trade agreements that you can benefit from? Import taxes that you have not taken into account can destroy your margins and competitive edge.

Legal stuff

I don’t want to bore you with all the legal steps necessary to export from Colombia. ProColombia has developed a step-by-step guide that is available here.

One thing that ProColombia does not explain clearly, is that you will need to register yourself as an exporter with the Ministry of Industry, Commerce and Tourism. Also, for your first exportation you need to make an appointment for an inspection with the Anti-Narcotics police. How to I know? Because my girlfriend worked with the DIAN for several years and now works as an independent, helping local companies import and export.

If you plan to export through your own Colombian company, and need a guide on how to set it up, I have that covered for you as well.

What to export?

Colombia is not China or India. Nor is it Germany or the United States. And many of the local products can’t compete internationally on prices or qualities with either. Many Colombian businesses exist as a consequence of the protectionist policies of the government that keep an otherwise unsustainable domestic production alive. Anybody who lives here know that Colombia tax the sh*t out of anything imported. The politicians are happy to let you export though. That is, unless you’re dealing in nose-candy or illegal hard woods from the jungle.

There are some exceptions to the rule though. For anyone who thinks that oil, flowers, coffee or bananas are the only things worth exporting, I urge you to check out this article that lists 12 curious items that are currently being exported.

The longer I spend on the ground, the more local businesses I see that are beginning to get “it right”. As an addition to the companies that I mentioned above, here’s a few locally produced, high-quality products that I consider exportation grade:

Agricultural products: I’m sure there is a demand to be found for mangostinos, granadilla, lulos, guanábana, maracuyá and pitayas. Of the more well-known, I’d say mango, pineapple, oranges and mandarines are excellent here. Frozen fruit pulp is another idea.
There are still plenty of opportunities to be found in coffee, avocados (have you ever seen them bigger than Colombia?) and quinoa.

Brands: Yummi Yummi makes the best peanutbutter that I have found here. 3 Cordilleras make a nice beer that could also be an option. Delicious local hams and sausages come from El Aldeano. BioEssens make fantastic natural oils. Dictador makes one of the world’s best rums, but most Colombians have never heard of it. Due to state monopolies, it only gets sold in Cartagena. Amazon Pepper makes my favorite hot sauce.
The textile industry in Colombia is massive and of high quality. Onda del Mar, PHAX, F.Nebuloni, Nos, Grama, Kassis, Mario Hernandez, Silvia Tcherassi, Nancy Gonzalez and T3P Design are all brands worthy of exportation.
Bobber Motor Cycles are a fun niche product. But it could also be hand-made Wayú bags from La Guajira or traditional coffee district furniture.

Natural resources: Gold, emeralds, nickel, copper, silver and platinum are all products that are mined in Colombia. Prices are set by international supply and demand, and quoted in dollars.

This list is by no means extensive, but just a result of my own personal brainstorming. Some of the products might be exporting already, but most likely just to a few countries. It shouldn’t keep you from trying. Also, swing by any organic shop and I think you will be surprised to see how many of the products are actually Colombian. Attending local trade shows and conventions is another way to gain knowledge of local producers. I’m sure most companies would be thrilled to hear from someone willing to export and represent their brand abroad. Choose a brand that you like yourself. If you believe in it, it will be a lot easier to make other people do the same.

Try to see if you can get exclusivity for a market. It will improve your competitive advantage.

If you want to create your own product, then opportunities are also plentiful. The only limit is your imagination. As Henry Ford famously said “Whether you think you can, or you think you can’t – you’re right.”

What are your favorite Colombian products? As long as it’s not an arepa, I’d love to hear about it in the comments below.