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Advantages of Indirect Exporting

"...manufacturers can benefit from export know-how and personal contacts from the export merchant or agent..."

The reasons why a local manufacturer may choose to export its goods indirectly include the following:

  • 1. By selling to an export merchant, the manufacturer can receive payment for its goods much sooner.
     
  • 2. The manufacturer does not need to set up its own export department hire an export manager, or support its own commissioned sales agent abroad.
     
  • 3. The manufacturer can benefit from the export know-how and personal contacts with the export merchant or agent.
     
  • 4. The export merchant or agent, handling several different products or product lines, can achieve various scale of economies - for example, in the use of sales representatives, paperwork, shipment and communications.
  


Site Contents for:
 How to develop your export market?

Page 1 How to develop your export market?

<< This Page 2 How to benefit from export merchant or agent?

Page 3 About Foreign Distributor & Import Agent

Page 4 Socialist Countries
Licensing and Join Venture

Page 5 Sales Procedure for Export Export Contract

Page 6 Incoterms describe the responsibilities of seller and buyer

Page 7 Definitions of INCOTERMS trade terms

 

 

 

 

 
  • 5. The manufacturer can find out whether its products will sell abroad without having to take great effort, risk, or financial investment.
     
  • 6. The manufacturer does not have to worry about all the problems involved in exporting Hazard of Export Packing & Shipping.

He merely follows the instructions given to him by the export merchant or agent with regard to packing, labeling, and Export Transportation & Shipment, etc.

Disadvantage of Indirect Exporting

Disadvantages of selling through an export intermediary.

  • 1. The manufacturer will receive a smaller profit margin.
     
  • 2. The manufacturer has no direct contact with the foreign agents or distributors, and final users of his products.
     
  • 3. The manufacturer may find it difficult to get an export trading house to take on its products for the foreign market. As these firms may prefer not to take on products that may require a great deal of promotion.
     
  • 4. The manufacturer may lose control over the way its products are priced, advertised, and sold.
 

Page 8 About commercial disputes and arbitration

Page 9 About The World Trade Center Association

Page 10 Direct Export & Indirect Export Procedures 
 
 

 

 

 

 

 

 

 
 

Direct Exporting

When the manufacturer wants to export his goods himself, there are various ways and procedure for direct export. Basically, there are three channels for direct exporting:

The manufacturer may try to develop its export sales by contacting prospective foreign buyers directly by mail, facsimile, the Internet, by participating in trade show abroad or make personal contact through visiting foreign countries.

Own Company Employees - If the business is very large, there shall come a time when it becomes worthwhile to station the firm's own sales representative abroad, covering a whole region rather than just one country.

Recommended reference:
Procedure for Direct Exporting

Checklist for Direct Exporting

 

Resident Foreign Buyer

Sometimes large foreign firm (e.g. food or department store chain) will have its own employee stationed in the local manufacturer's country or within the region.

This Resident Foreign Buyer will act on his employer's behalf, seeking to buy goods for his company.

 

Resident Foreign Buying Agent

This is a firm that acts as the purchasing agent for foreign companies, receiving a commission on the goods purchased.

The foreign principal advises this agent and says that it wants certain products at certain prices and the agent stationed locally goes looking for them, asking for quotations from several different local suppliers.
 

Next page 3/10 Foreign Distributor, Foreign Import Agent
"...specify relationship as an Independent Contractor and you cannot be held legally liable ...."

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Site Contents for:
How to develop your export market?
 


Site Contents for:
Secrets of
International Trade

 

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