basic-guide-to-exporting_Latest_eg_main_086196

Often, the first company does not produce all the products that it is under contractto provide, and it turns to other U.S. companies to provide the remaining products.The second U.S. company then piggybacks its products onto the internationalmarket, generally without incurring the marketing and distribution costs associatedwith exporting. Successful arrangements usually require that the product lines becomplementary and appeal to the same customers.Direct ExportingThe advantages of direct exporting for your company include more control over theexport process, potentially higher profits, and a closer relationship to the overseasbuyer and marketplace, as well as the opportunity to learn what you can do to boostoverall competitiveness. However, those advantages come at a price; your companyneeds to devote more time, personnel, and resources to direct exporting than itwould to indirect exporting.If your company chooses to exportdirectly to foreign markets, it usuallywill make internal organizationalchanges to support more complexfunctions. As a direct exporter, you’llnormally select the markets you wishto penetrate, choose the best channelsof distribution for each market, andthen make specific connections withoverseas buyers in order to sellyour product.Direct exporting allows morecontrol over the export process,potentially higher profits, and acloser relationship to the overseasbuyer and marketplace—as well asan opportunity to learn how you canboost your overall competitiveness.Getting Organized for ExportingA company new to exporting generally treats its export sales no differently fromits domestic sales, using existing personnel and organizational structures. Asinternational sales and inquiries increase, your company may choose to separate themanagement of its exports from that of its domestic sales.Advantages of separating international from domestic business include thecentralization of specialized skills needed to deal with international markets and thebenefits of a focused marketing effort that is more likely to increase export sales.However, segmentation is sometimes a less efficient use of company resources.Your company can separate international from domestic business at different levelsin the organization. For example, when you first begin to export, you may createan export department with a full- or part-time manager who reports to the head ofdomestic sales and marketing. At a later stage, your company may choose to increasethe autonomy of the export department to the point of creating an internationaldivision that reports directly to the president. Many smaller companies absorb exportsales into existing functions; such an arrangement works effectively until export salesincrease significantly—a happy challenge to look forward to.64U.S. Commercial Service • A Basic Guide to Exporting