Professional Documents
Culture Documents
LxporL comes from Lhe meanlng as Lo shlp goods or servlces ouL of Lhe
counLry from a porL of a counLry 1he seller of such goods or servlces ls known
as Lhe 'exporLer' who ls based ln Lhe counLry of exporL where as Lhe overseas
buyer ls called as Lhe lmporLer
ln lnLernaLlonal 1rade exporLs refers Lo selllng goods and servlces produced
ln home counLry Lo oLher markeLs
Any good or commodlLy LransporLed from one counLry Lo anoLher counLry ln
a leglLlmaLe fashlon Lyplcally for use ln Lrade LxporL goods or servlces are
provlded Lo forelgn consumers by domesLlc producers
LxporL of commerclal quanLlLles of goods normally requlres lnvolvemenL of
Lhe cusLoms auLhorlLles ln boLh Lhe counLry of exporL and Lhe counLry of
lmporL 1he advenL of small Lrades over Lhe lnLerneL such as Lhrough Amazon
and e8ay have largely bypassed Lhe lnvolvemenL of CusLoms ln many
counLrles because of Lhe low lndlvldual values of Lhese Lrades noneLheless
Lhese small exporLs are sLlll sub[ecL Lo legal resLrlcLlons applled by Lhe counLry
of exporL An exporLs counLerparL ls an lmporL
An exporL of a good occurs when Lhere ls a change of ownershlp from a
resldenL Lo a nonresldenL Lhls does noL necessarlly lmply LhaL Lhe good ln
quesLlon physlcally crosses Lhe fronLler Powever ln speclflc cases naLlonal
accounLs lmpuLe changes of ownershlp even Lhough ln legal Lerms no change
of ownershlp Lakes Also smuggled goods musL be lncluded ln Lhe exporL
measuremenL
8LNLII1S]ADVAN1AGLS CI LkCk1ING
Increas|ng sa|es
LxporLlng ls one way of lncreaslng your sales poLenLlal lL may be a way of
LesLlng Lhe opporLunlLles for overseas llcenslng franchlslng or producLlon
Increas|ng prof|ts
LxporLs can conLrlbuLe Lo lncreased proflLs because Lhe average orders from
lnLernaLlonal cusLomers are ofLen larger Lhan Lhey are from domesLlc buyers
as lmporLers generally order by Lhe conLalner lnsLead of by Lhe palleL
keduc|ng r|sk and ba|anc|ng growth
lL ls rlsky belng bound Lo Lhe domesLlc markeL alone LxporL sales Lo a varleLy
of dlverse forelgn markeLs can help reduce Lhe rlsk LhaL Lhe company may be
exposed Lo because of flucLuaLlons ln local (and forelgn) buslness cycles
Lower un|t costs
LxporLs help Lo puL ldle producLlon capaclLy Lo work 1hls ls generally achleved
Lhe more efflclenL uLlllzaLlon of Lhe exlsLlng facLory machlnes and sLaff
roduct L|fe Cyc|e Lxtens|on
When producLs reach Lhe maLurlLy sLage many companles replaced Lhem wlLh
new producLs lnvesLlng slgnlflcanL amounL of resources ln Lhelr developmenL
Powever exporLlng Lhem Lo speclflc LargeL markeLs maLure producLs may sLlll
have poLenLlal abroad
Lconom|es of sca|e
LxporLlng ls an excellenL way Lo en[oy pure economles of scale wlLh producLs
LhaL are more global ln scope and have a wlder range of accepLance around
Lhe world (ln oLher words Lhey can be used ln oLher parLs of Lhe world
wlLhouL much adapLaLlon) 1hls ls ln conLrasL Lo producLs LhaL musL be
adapLed for each markeL whlch ls expenslve and Llme consumlng and requlres
more of an lnvesLmenL 1he newer Lhe producL Lhe wlder range of accepLance
ln Lhe world especlally Lo younger cusLomers ofLen referred Lo as Lhe
global consumer
Untapped markets
A company may have a very unlque producL LhaL ls noL yeL avallable
elsewhere ln Lhe world ln Lhls lnsLance Lhese unLapped markeLs are llkely Lo
drlve Lhe flrms exporL acLlvlLles CLher flrms may wanL Lo Lake advanLage of
hlghvolume purchases ln large markeLs overseas such as ln Lhe uS Lurope
and Asla
Status as an exporter
lor some companles Lhe sLaLus of belng lnvolved ln lnLernaLlonal Lrade ls very
lmporLanL Lo Lhem
1nLIk kLSCNSI8ILI1ILS
Lxport D|rector 1he exporL dlrecLor plays Lhe role of head of exporL
deparLmenL and has responslblllLy on developlng lmplemenLlng and
oversee exporL pollcy and sLraLegy and also Lhe exporL dlrecLor ls ln
charge of developmenL of exporL venLure
Lxport Manager 1he manager has Lhe overall execuLlve conLrol under
Lhe exporL dlrecLor hls funcLlons are Lo coordlnaLe and faclllLaLe Lhe
performance and acLlons of Lhe oLher Lwo deparLmenLs
Sa|es Manager 1he sales manager under Lhe guldance of Lhe exporL
manager handles Lhe represenLaLlves lnhlblLs Lhe sales of exporL wlLh a
llmlLed conLrol and auLhorlLy
Sh|pp|ng Manager 1hls manager handles Lhe booklng and places Lhe
orders Lo Lhe manufacLurlng unlL Lo produce wlLhln Lhe order Laken Llll
Lhe dellvery Lo be handled Lo cusLomer Pe ls sub[ecLed Lo monlLor Lhe
unlLs of booklngs and provlde noLes for Lhe documenLaLlon wlLh Lhe
asslsLance of Lhe flnance manager
EXPURT DIRECTUR
EXPURT MANACER
SALES MANACER SHIPPINC MANACER FINANCE MANACER
Lxport|ng products to ch|na
1radlng and exporL are Lo use Lhe lnLermedlarles Lo exporL Lo Chlna
lndlrecLly or dlrecLly 1here are malnly four Lype of lnLermedlarles
agenLs dlsLrlbuLors wholesalers and reLallers
AgenLs do noL have Lhe properLy rlghLs 1hey are only enLrusLed Lo do
whaLever Lhey need Lo do and agenLs can come ln Lhe form of excluslve
agenL and nonexcluslve agenL A dlsLrlbuLor buys goods on lLs own
accounL and resells Lhem Lo cusLomers 1he dlsLrlbuLor Lakes on Lhe
flnanclal rlsk of noL belng able Lo sell Lhe producL Wholesaler refers Lo
Lhose boughL large volume of sLocks and Lhen sells lL ln amounL Lo
varlous people 8eLallers are Lhose who purchase producLs from
wholesalers or manufacLurers and resell Lhem Lo endusers
Ind|rect export
1hrough lndlrecL exporL companles can sell lLs producLs Lo Lhe
lnLermedlarles ln Chlna and Lhese mlddlemen can help Lo brlng Lhe
producL lnLo Lhe markeL 1here are many channels ln Chlna markeL enLry
for lndlrecL exporLaLlon such as Chlnese lmporLers lnLernaLlonal Lradlng
company and forelgn companles slLuaLed ln chlna LhaL lmporL Lhe
producLs back Lo Lhelr Chlna markeL
1he advanLages LhaL a forelgn manufacLurer chooses Lo exporL lLs goods
lndlrecLly lnclude Lhe followlng
* 1he Llme Laken ln Chlna markeL enLry wlll be shorL and lL ls flexlble
* 8y selllng Lo an exporL merchanL Lhe manufacLurers can recelve
paymenL for Lhelr goods much sooner Lhey wlll noL be exposed Lo rlsk of
forelgn exchange and Lhe varlous credlL rlsks
* 1he manufacLurer does noL need Lo seL up lLs own exporL deparLmenL
hlre an exporL manager or supporL lLs own commlssloned sales agenL ln
Chlna
* 1he manufacLurer can beneflL from Lhe exporL knowhow and personal
conLacLs wlLh Lhe exporL merchanL or agenL
* 1he exporL merchanL or agenL handllng several dlfferenL producLs or
producL llnes can achleve varlous scale of economles for example ln
Lhe use of sales represenLaLlves paperwork shlpmenL and
communlcaLlons
* 1he manufacLurer can flnd ouL wheLher lLs producLs wlll sell abroad
wlLhouL havlng Lo Lake greaL efforL rlsk or flnanclal lnvesLmenL
* 1he manufacLurers do noL have Lo worry abouL all Lhe problems
lnvolved ln exporLlng 1hey merely follow Lhe lnsLrucLlons glven Lo Lhem
by Lhe exporL merchanL or agenL wlLh regard Lo packlng labellng and
LransporLaLlon eLc
Powever as lndlrecL exporL does noL need Lo deal dlrecLly wlLh Chlna
markeL Lhere are some dlsadvanLages of selllng Lhrough an exporL
lnLermedlary
* 1he manufacLurer has no dlrecL conLacL wlLh Lhe forelgn agenLs or
dlsLrlbuLors and flnal users of hls producLs lL ls dlfflculL for Lhem Lo galn
much experlence ln Chlna markeL enLry
* 1he manufacLurer may flnd lL dlfflculL Lo geL an exporL Lradlng house Lo
Lake on lLs producLs for Lhe forelgn markeL As Lhese flrms may noL
prefer Lo Lake on producLs LhaL may requlre a greaL deal of promoLlon
* 1he manufacLurer may lose conLrol over Lhe way lLs producLs are
prlced adverLlsed and sold
* 1he manufacLurer wlll recelve a smaller proflL margln
1hls meLhod ln Chlna markeL enLry ls llke a double edged sword whereby
lL ls Lhe easlesL and also Lhe weakesL lLs meLhod ls more sulLable for
small and medlum slzed companles large companles may use Lhls
meLhod as one of channels ln Lhelr lnLegraLed channels for Lhe markeL
wlLh hlgh rlsk and less growLh poLenLlal
D|rect export
lf Lhe manufacLurer wanLs Lo exporL hls goods hlmself Lhere are varlous
ways for dlrecL exporL 8aslcally dlrecL exporLlng has Lhree channels lLs
own company employees Lravellng or sLaLloned ln Chlna Chlnese lmporL
agenLs and Chlnese dlsLrlbuLors Cnce Lhls neLwork ls esLabllshed Lhelr
producLs can be dlrecLly sold Lo Lhe endusers
1he advanLages LhaL a local manufacLurer may choose Lo exporL lLs
goods dlrecLly as means ln Chlna markeL enLry lnclude Lhe followlng
* 1he manufacLurer can be rld of Lhe lnLermedlarles and conLrol Lhe
markeL more closely
* leedback of Lhelr producLs can also reach Lhem sooner and Lhereby
and be able Lo come up wlLh a more pracLlcal and feaslble markeLlng
sLraLegy
* 1he manufacLurer can en[oy a larger oversea markeL share and hlgher
proflL margln
* 1he manufacLurer can esLabllsh lLs own channel neLwork As such Lhe
lnLernaLlonal markeLlng level and experlence of Lhe enLerprlse can also
be ralsed
ulrecL exporL has lLs llmlLaLlons as means ln Chlna markeL enLry as well
lor example Lhe cosL of Lhls meLhod ls hlgher Lhan LhaL uslng lndlrecL
exporL lL may also requlre huge amounL of caplLals employmenL of
large number of LalenLs SeLLlng up an overseas neLwork would requlre
loLs of efforLs
1ransportat|on
1he exporL process ls encumbered by Lhe amounL of documenLaLlon Lhe
exporLer faces around every Lurn 1hese documenLs can be broken down
lnLo four groups (1) Lhose requlred by Lhe lmporLer (and for cusLoms
clearlng ln Lhe LargeL markeL) (2) Lhose requlred Lo exporL Lhe goods
from uubal (3) Lhose requlred for paymenL and (4) Lhose requlred Lo
LransporL Lhe goods (le Lhe LransporL documenLs) ln many lnsLances
Lhe documenLs may be Lhe same (for example Lhe commerclal lnvolce
may be requlred ln more Lhan one lnsLance as may Lhe blll of
ladlng/alrway blll) ln Lhls secLlon we deal wlLh Lhe documenLs requlred
Lo faclllLaLe LransporLaLlon 1hey lnclude
a) 8lll of Ladlng A 8CL ls one of Lhe oldesL and mosL common
forms of LransporLaLlon documenLs ln use Loday lL ls a documenL
LhaL esLabllshes Lhe Lerms of a conLracL beLween a shlpplng
company and Lhe exporLer/shlpper (or agenL such as a frelghL
forwarder) WlLhln Lhls conLracL lL ls agreed LhaL frelghL ls Lo be
moved beLween speclfled polnLs for a speclfled charge ln Lhe
world of exporL documenLaLlon Lhe Lerm commonly used Lo
descrlbe Lhe lndlvldual or flrm LhaL conLracLs Lhe LransporLaLlon
company Lo send goods Lo a forelgn desLlnaLlon generally Lhe
exporLer ls referred as Lhe shlpper" even ln Lhe case of alr
frelghL
b) Alr way 8lll Alr waybllls (AW8) are a form of 8CL and are used
for boLh domesLlc and lnLernaLlonal fllghLs An AW8 (also
referred Lo as alr conslgnmenL noLe or alrway blll of ladlng) refers
Lo a documenLary recelpL lssued by a carrler (le alrllne) ln favour
of a shlpper for goods recelved and ls evldence of Lhe conLracL of
carrlage Lo carry Lhe goods Lo a speclfled alrporL under speclfled
condlLlons buL lL ls noL a documenL of LlLle Lo Lhe goods Pence
Lhe AW8 ls nonnegoLlable lL ls usually Lhe shlpper Lhe exporLer
(or Lhelr agenL) LhaL compleLes Lhe AW8
c) 8oad conslgnmenL noLe A road conslgnmenL noLe (also referred
Lo as a road LransporL documenL a road wayblll or a road
manlfesL) ls a form of lnland 8CL used ln uubal alLhough as road
conslgnmenL noLes can cover cargo movlng across borders lL ls
also a form of Lhrough 8CL As road haulage ls drlve by a large
number of prlvaLe road haulers you may come across many
dlfferenL Lypes of road conslgnmenL noLes alLhough Lhere ls a
Lendency Lo follow Lhe Lyplcal 8CL used ln Lhe case of ocean
shlpplng Lhere ls sLlll a conslgnee a shlpper a descrlpLlon of Lhe
goods
d) LxporL Cargo Shlpplng lnsLrucLlon1he LxporL Cargo Shlpplng
lnsLrucLlon (LCSl)* ls Lhe wrlLLen lnsLrucLlon from Lhe exporLer Lo
Lhe frelghL forwarder or carrler (shlpplng llne alrllne road hauler
eLc) for Lhem Lo faclllLaLe Lhe movemenL goods Lo Lhe deslred
desLlnaLlon lL conLalns lnformaLlon on Lhe goods and Lhe rouLe
Lo Lhelr desLlnaLlon any LransporL requlremenLs cusLoms
lnformaLlon who ls Lo recelve whaL documenLs and how cosLs
are Lo be allocaLed lL ls exLremely lmporLanL LhaL Lhe lnformaLlon
provlded ln Lhe LCSl ls accuraLe MosL frelghL forwarders and
LransporLaLlon companles have sLandard documenLs LhaL
exporLers can compleLe 1he documenL provlded wlll capLure all
of Lhe necessary lnformaLlon Lo enable Lhe frelghL forwarder or
LransporL company Lo execuLe Lhelr obllgaLlons