Methods Of Exporting
There are two basic methods of exporting. 1. Indirect exporting 2. Direct exporting
Under the indirect method, you hire a foreign sales representative who acts as your intermediary. This company or individual is responsible for doing the actual exporting, thus you have no contact with the overseas buyer. Plus, you usually assume no responsibility for transporting the product to its destined market.
Seeking out domestic buyers who represent foreign customers.
Exporting through an Export Management Company (EMC)
Exporting through an Export Trading Company (ETC)
.Methods of indirect Filling orders from domestic buyers who exporting then export the product.
in some cases without even the awareness of the 2/25/11 44
.Filling orders from domestic buyers who then export the product.
These sales are indistinguishable from other domestic sales as far as the original seller is concerned. Someone else has decided that the product in question meets foreign demand. That party takes all the risk and handles all of the exporting details.
Seeking out domestic buyers who representits In this case a company may know foreign customers.
the buyer who assumes the risk and handles the details of exporting. it is still product is being exported.
Exporting through intermediaries With this approach. a company
engages the services of an intermediary firm capable of finding foreign markets and buyers for its products. Export management companies (EMCs). 2/25/11 and other intermediaries can give the 66
. international trade consultants. export trading companies (ETCs).
etc. trademarks. 2/25/11 77
.) grants permission to some other group or individual to manufacture that product (or make use of that proprietary material) in return for specified royalties or other payment.Licensing
A business arrangement in which the manufacturer of a product (or a firm with proprietary rights over certain technology.
. A franchise is a right granted to an individual or group to market a company's goods or services within a certain territory or location.Franchising
Franchising is the practice of using another firm's successful business model.
Agreements with foreign manufacturers to produce your product.
. are referred to as contract manufacturing. as opposed to exporting your product.
without incurring the marketing and distribution costs associated with exporting.Piggyback Marketing
Piggyback marketing is an arrangement in which one firm distributes a second firm's product or service.
. The second company piggybacks its products on to the international market. The second company adds value by offering a more complete solution to the foreign market.
A remarketer purchases products directly from the manufacturer. and repackages the products according to their own specifications.
. They then sell these products overseas through their contacts in their own names and assume all risks.
Market research Foreign distribution Collections
The direct method. requires you to arrange your own overseas
.2. however. Direct Exporting
With direct exporting the exporter handles every aspect of the exporting process.
Methods of direct exporting
Sales Representatives Distributors A Foreign Retailer Direct sales to the End User
The term "sales representative" is preferred because the term "agent" has legal connotations in some countries.Sales Representatives
A sales representative is often called a manufacturer's representative or a sales agent. And he
. literature and samples to present the 2/25/11 product to potential buyers. He uses the company's product.
Use a distributor if you need to maintain inventory on the foreign country and do not want to maintain your own distribution network.Distributor
A foreign agent who sells for a supplier directly and maintains an inventory of the supplier's products. 2/25/11
Effective in countries that have large retail chains. These transactions often involve consumer products.Foreign Retailer
A Company may sell directly to a foreign retailer.
A company may sell directly to a foreign end user. Selling overseas may incur some added costs. Unless other arrangements are made. the seller is responsible for: Shipping Payment collection Product support and service
Subsidiary 2. Strategic Alliance
.Other Methods Of Exporting
1. Joint Venture 3.
1. Subsidiaries are usually formed after market success has been achieved by other methods. Subsidiary
Companies that truly want to commit to exporting to a market form a subsidiary.
Each partner brings specialized skills and contributes to the endeavor. Each partner makes a substantial 2/25/11
.2. Joint Venture
A joint venture brings together your firm and a foreign company with similar goals to establish a market entry and a distribution network.
A strategic alliance may be one or more of the following agreements:
A strategic alliance is a form of presence in an overseas market that is more than a simple buy/sell agreement.
Product development Distribution agreement Cross licensing