Markets with great potential for business such as Europe, Asia and the United States demand different products that SMEs (small and medium enterprises) in Latin America and the Caribbean are in a position to produce. The SME Advisors’ blog states that a company with diversified markets and international activity increases the value of the company as a strategic business source, strengthening the enterprise’s sustainability over the long term.

Likewise, a comprehensive study carried out by IHS Global Insight and DHL Express shows that international trade and cooperation have become a key factor for the success of SMEs. For example, a macro-economic analysis and a survey of 410 SME Directors reveals that companies participating in international markets have double the chance of success than those only operating inside the domestic market.

Meanwhile, among the SMEs surveyed, 26% of companies participating in international trade significantly exceeded projected returns in this market, compared to 13% of companies operating exclusively in the country of origin. The survey illustrates that entrepreneurs mentioned several benefits from participating in the international market such as access to new knowledge, risk reduction and increase in production volume. Below follows a detailed description of the main advantages of delivering products to other countries.

• Risk reduction: as explained in the PYMEX blog, Entrepreneur Community, selling to several markets helps SMEs diversify risk. Companies that manage to place their products in several countries are less exposed to the cyclic changes of a domestic or specific market. Therefore, the company’s sustainability increases over the long term since it will be more prepared to face an economic crisis in a given country or region of origin   
• Increase in sales volume: once a company starts selling in new markets, where it has never carried out any activity, an increase in sales volume will take place. Consequently, cash flow or revenues will also increase. Over the long term, once the expenses for introducing the product in the international market have been covered, increasing sales abroad will improve general revenues since the company will have greater capacity and production volume  
• Reduction in production costs per unit: an increase in the purchase volume of raw material helps negotiate better prices, payment terms and delivery times. Additionally, an exporting company will have its doors open to foreign supply markets offering better price, payment and/or quality terms. This results in lower production costs per unit
• Mitigation of seasonal demand: for companies whose products or services are only used domestically certain times of the year, selling in other countries can help balance demand throughout the year. The United Nations Industrial Development Organization (UNIDO) explains that this is an ideal situation for companies selling seasonal products such as clothing or certain food   
• Professional development of a company: companies that venture into the export business generally have to have presence or representation in the foreign market. This can consist of  a simple marketing campaign in social media to physical presence in the target market. This means that an exporting SME has to carry out market studies and prepare an export plan, among others. This will result in corporate developments in terms of operative strategy and market position
• Use of surplus production: companies with excess production, regardless of the cause, have the option of selling products in the international market and are not compelled to discount the product in the market of origin or even to get rid of the surplus. This operates almost as insurance for the company and presents the option of placing production elsewhere to avoid unnecessary losses
• Access to the international financial market: foreign sales generate flow of funds in different currency, which if properly managed, can become natural insurance vis-à-vis exchange rate variations. Additionally, foreign trade connects companies with international banks and opens the doors to more attractive financing than that offered by local banks
• Cultivate new knowledge and experiences: one of the most valuable advantages of penetrating the international market is access to information on new technologies, marketing methods and foreign-competitor strategies. Additionally, the mere fact of accumulating time and experience as an exporter adds value to an SME’s organization. For example, this knowledge can help the company become more competitive in the domestic market and it can also start advising other companies and generate a new source of income

Ken Allen, General Director of DHL Express expresses that, "international trade generates enormous value for SMEs not only because it opens new markets for its products and services but also because it provides access to international best practices and innovation. What is probably most significant is that international competition compels them to improve their international operations and processes, to the benefit of their business in both domestic and foreign markets."