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Methods of Exporting (Direct & Indirect)

Methods of Exporting (Direct & Indirect)



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Published by goddamnedcomputer
Direct and Indirect Exporting
Direct and Indirect Exporting

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Published by: goddamnedcomputer on Apr 08, 2008
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Methods of Exporting: Direct and Indirect Sales
By Laurel Delaney (Founder and President, GlobeTrade.com)(The following is Chapter 8 from Laurel’s book, “Start and Run aProfitable Exporting Business:http://www.amazon.com/exec/obidos/ASIN/1551801396/qid=921889823/104-7434993-1535140)There are several factors to consider when determining whethera direct or indirect sales strategy is best for you -- most importantly,the extent of your resources and the degree of control you wish toexercise over your export ventures. The following analysis will helpyou to make a choice tailored to your needs.First, let me emphasize that timing is everything.
Readiness toseize an opportunity is more important than having your wholestrategy nailed down beforehand.
If you get a promising inquiryfor your export product, go for it. Don't analyze it to death until afteryou've responded to the inquiry. If there's one thing I'd like you totake away from reading this excerpt, it's the global marketer's habit of action: it's better to do something, anything, that will put you right inthe global arena than to expend enormous amounts of timeresearching and debating options and wondering what other peoplewould do if they were in your place. When an opportunity comes, youmust be ready to operate via either sales channel, direct or indirect.Let's start with a checklist of factors to consider before youdecide which method of exporting will be best for you.
1. How big is your company?
For that matter, how big are you? Alarger company will have more "people power" to dedicate to the task
of achieving direct sales than a small firm or a solo operator, who mayfind the indirect route more readily within their reach.
2. How big do you (or your company or your division) want toget?
If you want to be the size of Siemens International someday,tackling direct sales now will help you build the foundation for thatblockbuster future. But even if you prefer to continue doing businessas a one-person operation, you'll want to switch modes and attemptsome direct channels as your business develops.
3. How much time and money do you have?
If you have deeppockets and all the time in the world, then you have nothing to lose bygoing direct. If time is of the essence because you don't haveunlimited funds, indirect channels are more likely to bring you a fastsale.
4. Will your product require extensive on-site training andsupport?
Look at Novell, Inc., the world's second-largest producer of personal computer software. They want to maintain a reputation notonly for making a high-quality product, but also for improving people'slives. The only way to express this commitment to their customers isby staying right in their faces, all over the world! Will they rely onlocal agents to cultivate the high degree of customer satisfactionthey're after? Unlikely. The more complex and technical your product,the greater the importance of on-site customer service. But if you'reexporting a product that comes without instructions, you'll do yourcustomers no disservice by going indirect.
5. Do you feel like you know what you're doing and where youwant to go? Do you have a strong heart, mind and stomach?
If you can honestly answer yes, then go direct. If not, start off indirect.
Direct ExportingDirect exporting means you export directly to a customerinterested in buying your product. You are responsible for handlingthe logistics of shipment and for collecting payment.The advantages of this method are:- Your potential profits are greater because you are eliminatingintermediaries.- You have a greater degree of control over all aspects of thetransaction.- You know who your customers are.- Your customers know who you are. They feel more secure in doingbusiness directly with you.- Your business trips are much more efficient and effective becauseyou can meet directly with the customer responsible for selling yourproduct.- You know whom to contact if something isn't working.- Your customers provide faster and more direct feedback on yourproduct and its performance in the marketplace.- You get slightly better protection for your trademarks, patents andcopyrights.- You present yourself as fully committed and engaged in the exportprocess.- You develop a better understanding of the marketplace.- As your business develops in the foreign market, you have greaterflexibility to improve or redirect your marketing efforts.The disadvantages:

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