Indirect exporting means selling to an intermediary, who in turn sells your products either directly to customers or to importing wholesalers. The easiest method of indirect exporting is to sell to an intermediary in your own country. When selling by this method, you normally are not responsible for collecting payment from the overseas customer, nor for coordinating the shipping logistics.
Export Management Companies
An export management company (EMC) is one such intermediary.
A good one will act in all respects as a global extension of your own sales-and-service presence — more or less what you are attempting to do on behalf of a manufacturer! EMCs offer a wide range of services, but most specialize in exporting a specific range of products to a well-defined customer base in a particular country or region. For example, an EMC might specialize in exporting personal computer business software to educational institutional customers in Asian-Pacific countries.
An EMC is highly market-driven, representing your product along with other companies’ non-competing products as part of their own import “product line” aimed at the customer base they have created. Generally, the EMC buys the product from a manufacturer and marks up the price to cover their profit. This is called a buy-resell arrangement.
Other common compensation structures used by EMCs include both commission and buy-and-resell, start-up or project fee only, fee plus commission, or fee plus commission and buy-and-resell.
An EMC will carry out all aspects of the export transaction:
- Identifying international markets for your product or service.
- Locating customers overseas.
- Arranging agent/distributorship relationships.
- Preparing, negotiating and handling all communication, documentation and shipping logistics.
- Exhibiting at international trade shows.
- Traveling overseas to meet with potential customers.
- Setting up appropriate distribution channels.
- It’s an almost risk-free way to begin.
- It demands minimal involvement in the export process.
- It allows you to continue to concentrate on your domestic business.
- You have limited liability for product marketing problems — there’s always someone else to point the finger at!
- You learn as you go about international marketing.
- Depending on the type of intermediary with which you are dealing, you don’t have to concern yourself with shipment and other logistics.
- You can field-test your products for export potential.
- In some instances, your local agent can field technical questions and provide necessary product support.
By Laurel Delaney