basic-guide-to-exporting_Latest_eg_main_086196

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Distribution ConsiderationsHere are some questions to consider when distributing your product:• Which channels of distribution should your company use to market itsproducts abroad?• Where should your company produce its products, and how should it distributethem in the foreign market?• Are there warehouse facilities available in the foreign market to shorten supplylines, save money on freight, and get the products to buyers faster?• What types of representatives, brokers, wholesalers, dealers, distributors, or endusecustomers should you use?• What are the characteristics and capabilities of the available intermediaries?• Should you obtain the assistance of an EMC or an ETC?Your answers from questions asked in Chapter 2 can help you determine whetherindirect or direct exporting methods are best for your company.Indirect ExportingThe principal advantage of indirect exporting for a smaller U.S. company is that anindirect approach provides a way to enter foreign markets without the potentialcomplexities and risks of direct exporting. Several kinds of intermediary companiesprovide a range of export services, and each type of company can offer distinctadvantages to your company.Confirming HousesConfirming houses or buying agentsrepresent foreign companies thatwant to purchase your products. Theyseek to obtain the desired items atthe lowest possible price and are paida commission by their foreign clients.Indirect exporting allows a companyto enter foreign markets withoutthe potential complexities and risksof direct exporting.In some cases, they may be foreign government agencies or quasi-governmentalcompanies empowered to locate and purchase desired goods. An example is aforeign government purchasing mission.A good place to find these agents is through foreign government embassies andembassy websites or through the U.S. Commercial Service.Export Management CompaniesAn export management company can act as the export department for producers ofgoods and services. It solicits and transacts business in the names of the producers itrepresents or in its own name for a commission, salary, or retainer plus commission.Some EMCs provide immediate payment for the producer’s products by either62U.S. Commercial Service • A Basic Guide to Exporting
arranging financing or directly purchasing products for resale. Typically, only larger EMCs canafford to purchase or finance exports.EMCs usually specialize by product or by foreign market, or sometimes by both. Because of theirspecialization, the best EMCs know their products and the markets they serve very well andusually have well-established networks of foreign distributors already in place. This immediateaccess to foreign markets is one of the principal reasons for using an EMC because establishing aproductive relationship with a foreign representative may be a costly and lengthy process.One disadvantage of using an EMC is that you may lose control over foreign sales. Most exportersare understandably concerned that their product and company image be well maintained inforeign markets. A way for your company to retain sufficient control in such an arrangement is tocarefully select an EMC that can meet your company’s needs and maintain close communicationwith you. For example, your company may ask for regular reports on efforts to market yourproducts and may require approval of certain types of efforts, such as advertising programs orservice arrangements. If your company wants to maintain this kind of relationship with an EMC,you should negotiate points of concern before entering an agreement.Export Trading CompaniesAn export trading company can facilitate the export of U.S. goods and services. Like an EMC, anETC can either act as the export department for producers or take title to the product. A specialkind of ETC is a group organized and operated by producers. These ETCs can be organized alongmultiple- or single-industry lines and can also represent producers of competing products.Exporters may consider applying for an Export Trade Certificate of Review under the ExportTrading Company Act of 1982. A certificate of review provides limited antitrust immunity forspecified export activities. For more information, contact your local U.S. Commercial Service office.Export Agents, Merchants, or RemarketersExport agents, merchants, or remarketers purchase products directly from the manufacturer,packing and labeling the products according to their own specifications. They then sell theseproducts overseas through their contacts in their own names and assume all risks.In transactions with export agents, merchants, or remarketers, your company relinquishes controlover the marketing and promotion of your product. This situation could have an adverse effecton future sales abroad if your product is underpriced or incorrectly positioned in the market or ifafter-sales service is neglected. However, the effort required by the manufacturer to market theproduct overseas is very small and may lead to sales that otherwise would take a great deal ofeffort to obtain.Piggyback MarketingPiggyback marketing is an arrangement in which one manufacturer or service companydistributes a second company’s product or service. The most common piggybacking situationoccurs when a U.S. company has a contract with an overseas buyer to provide a wide range ofproducts or services.Chapter 5: Methods and Channels63
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A BASIC GUIDE TOEXPORTINGThe Offici
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export.gov/basicguideLibrary of Con
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Table of ContentsChapter 1: Introdu
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global GDP and 30 percent of global
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A GEE might consist, for example, o
Page 14 and 15: Success StoryPedaling Through Trial
Page 16 and 17: Chapter 2Developing anExport Strate
Page 18 and 19: specified in the EAR under a specif
Page 20 and 21: All U.S. businesses have many ways
Page 23 and 24: Answer these 11 questions:1. Which
Page 25 and 26: Product or Service• What need doe
Page 27 and 28: Sample Outline of anExport PlanTabl
Page 29 and 30: 5. Current Trends and Practices•
Page 31 and 32: 16. My Product’s Harmonized Code
Page 33: Success StoryDownloading NewInterna
Page 36 and 37: This last advantage is especially i
Page 38 and 39: Gathering and evaluating secondary
Page 40 and 41: Drawing ConclusionsAfter analyzing
Page 42 and 43: United Nations Statistical Yearbook
Page 44 and 45: Private-Sector Product and Industry
Page 46 and 47: Success StoryHelping Feed the World
Page 48 and 49: Chapter 4Export AdviceIn this chapt
Page 50 and 51: Some of the more important services
Page 52 and 53: the important difference that the b
Page 54 and 55: at no cost to the small business ex
Page 56 and 57: A commercial bank can perform many
Page 58 and 59: location and construction of manufa
Page 60 and 61: To prevent reverse engineering in C
Page 62 and 63: We are agnostic on the question of
Page 66 and 67: Often, the first company does not p
Page 68 and 69: your ability to terminate agreement
Page 70 and 71: Once your company has prequalified
Page 72 and 73: Choosing a ForeignRepresentative or
Page 74 and 75: Success StoryDon’t Wait—Innovat
Page 76 and 77: Chapter 6Finding QualifiedBuyersIn
Page 78 and 79: companies are available from many p
Page 80 and 81: Trade Fair Certification Program (e
Page 82 and 83: Millennium Development CorporationT
Page 84 and 85: Who Is the “Ideal”International
Page 86 and 87: Scores of new franchising concepts
Page 88 and 89: Success StoryCast a Wide Net to Cat
Page 90 and 91: Chapter 8Preparing YourProduct for
Page 92 and 93: You can also contact the Office of
Page 94 and 95: training seminars, or DVDs. Zeigler
Page 96 and 97: The ChallengeSmith first looked tow
Page 98 and 99: encompasses services in transportat
Page 100 and 101: give U.S. companies a competitive e
Page 102 and 103: Success StoryRecruiting New Franchi
Page 104 and 105: Chapter 10International LegalConsid
Page 106 and 107: For more information from the U.S.
Page 108 and 109: When goods enter a bonded warehouse
Page 110 and 111: under the UCC. Older works may also
Page 112 and 113: Trade names are also protected on a
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knowledge, in turn, promotes furthe
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prevent him or her from obtaining a
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Business-to-Consumer E-Commerce Wor
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Because such a website is often sta
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An online exporter may choose to pu
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important to identify and incorpora
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other business contacts) options re
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Success StoryGrowing Strong withInt
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Chapter 12Shipping YourProductIn th
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One popular method of shipment is t
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Certificate of ConformityRequired b
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The cost of the shipment, delivery
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To learn more about comprehensive r
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China but needed to do a lot of hom
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price is too high, the product or s
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CompetitionIn the domestic market,
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Commonly Used TermsIt is important
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Success StoryAligning Innovationwit
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Chapter 14Methods ofPaymentIn this
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Letters of Credit and Documentary C
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You must provide documentation show
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associated with open-account trade
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payment. This is because the export
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ut they were willing to make the sm
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• The need for preshipment financ
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Thus it is in your best interest to
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to support ongoing export sales or
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To be eligible, a business must hav
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Medium Enterprise Department and OP
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Success StoryManufacturingInternati
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Chapter 16Business TravelAbroadIn t
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Planning an ItineraryTravel agents
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Business Culture TipsAlways answer
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Gift giving is an important part of
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particularly intense issue. So the
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Here are a few suggestions.• Expe
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Building a Working RelationshipOnce
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negotiations and agreements with it
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Chapter 18Rules of Originfor FTAsIn
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5. Determine if the foreign content
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The original ROOs are listed in an
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Example Rules of OriginCombining Mu
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Israel, Jordan, Morocco, Bahrain, a
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The importer may ask the exporter w
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Generic CertificatesIf a good does
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Architectural Association of Kenya
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Appendix A: Glossary of TermsAdvanc
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Export-Import Bank of the United St
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Market SurveyReport that provides a
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Appendix B: Definitions of Abbrevia
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Appendix D: FormsHere, you will fin
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228U.S. Commercial Service • A Ba
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Tech International1000 J Street, N.
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COMMERCIAL INVOICESELLER: INVOICE N
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Copyright © 1998 UNZ & CO.SHIPPER/
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DEPARTMENT OF HOMELAND SECURITYU.S.
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PACKING LIST© Copyright 2001 Unz &
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1a. U.S. PRINCIPAL PARTY IN INTERES
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U.S. $13220of this FIRST of Exchang
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IndexAA2ASee account-to-account (A2
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Global Entrepreneurship Ecosystem (
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Swinko, RonSee Jet IncorporatedSzuc
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International OfficesAfghanistanKab
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