Doing Business In Argentina

material, input, or material needed to produce the good before taxes PLUS Cost of
conversion (labor, services and other charges, excluding VAT) incurred by the
company to produce or sell the good PLUS Financial costs (i.e., explicit and implicit
interest, monetary updates, exchange differentials) derived from using capital belonging
to other than the producing/selling company PLUS Prorated overhead costs PLUS The
company's unit profit or mark-up.
Cost of Raw Material, Input, or Material: (1) In the case of goods purchased by the
domestic producer, the procurement cost plus the cost of transportation to the location
where the goods will be converted or incorporated into the finished product. (2) In the
case of goods imported by the domestic producer, the CIF cost plus import duties and
taxes paid to place the good in the local market, except VAT, plus the cost of
transportation to the location where the goods will be converted or incorporated into the
finished product. (3) In the case of goods manufactured by the local producer, all the
costs associated with the production process, including the cost of transportation to the
location where the goods will be converted or incorporated into the finished product.
Comparable Prices: Must include transportation costs to the location specified in the
contract.
Distribution and Sales Channels Return to top
After analyzing the product and its uses, and defining the potential customers, U.S.
companies intending to export to Argentina should identify the geographical areas where
the major users of the product reside. It is important to recognize that 80 percent of the
Argentine population is concentrated in urban areas, with over 40 percent living in
Buenos Aires and its suburbs, and almost 10 percent in the cities of Cordoba, Rosario,
and Mendoza.
Segmentation is key. It is increasingly difficult to establish a "typical customer", due to
new consumption habits and to the dynamics of income distribution and demography.
Channel selection should be based on the nature of the product and the company's
knowledge of the Argentine market. Generally, firms new to this market find it more
effective to sell through a distributor. Large firms generally buy directly from overseas
suppliers, while smaller firms prefer to buy through intermediaries. Industrial equipment
is sold by sales agents or through trade fairs, while consumer goods are increasingly
sold through large outlets such as supermarkets.
Argentine distribution channels have gained increased efficiency through merging and
streamlining during the past decade, as a result of the increased competition and
changes in the consumer buying process that require goods to be delivered at lower
prices and in a timely manner. (Please refer to the Retail Network for further details.)
Warehouse and distribution
Argentines have realized the benefits of logistics management in order to be more
competitive. State-of-the-art technology plays an important role in upgrading
warehouses. The introduction of "paperless" warehouses by large companies has been
well received due to its inherent advantages and the reduction of operating costs.
3/4/2008