basic-guide-to-exporting_Latest_eg_main_086196

Chapter 5Methods andChannelsIn this chapter . . .• Finding the best approach to exportingfor your company• Separating international from domestic business• Finding overseas partners/agents/distributorsThe most common methods of exporting are indirect selling and direct selling. In indirect selling,an export intermediary, such as an export management company (EMC) or an export tradingcompany (ETC), assumes responsibility for finding overseas buyers, shipping products, andgetting paid. A variation on this method is an agent that you engage on a commission basis whofinds the buyer for you. U.S. wholesalers can play the role of intermediary, buying goods from theproducer and selling them to an end-user outside the United States. The wholesaler takes legalpossession of the goods. The benefit for the producers is that their responsibility ends at theirdelivery dock. The negative is that the wholesaler may receive a better profit margin and thebenefits of acquiring valuable expertise from selling to an array of international markets. If thewholesaler only sells to distributors in Canada but there’s a bigger demand for your product inMexico, you’ll never know that, and sales that could be won’t happen.Using large online marketplaces such as eBay, Amazon, and Alibaba is another variation ofindirect selling that’s gaining popularity. Increasingly, these and other big players are offeringdistribution centers in other countries where your products can be closer to customers. In suchcases, these big sellers offer to handle all the paperwork, customs, and logistics—for a fee.In direct selling, the U.S. producer deals directly with a foreign buyer. The paramountconsideration in determining whether to market indirectly or directly is the level of resources yourcompany is willing to devote to your international marketing effort. Other factors to considerwhen deciding whether to market indirectly or directly include:• The size of your company• Your tolerance for risk• Resources available to develop the market• Opportunity costs• The nature of your products or services• Previous export experience and expertise• Business conditions in the selectedoverseas marketsU.S. Commercial Service • A Basic Guide to Exporting59