Direct Exporting Through Export Intermediaries

Stan Klatka | September 18, 2005 | Export Finance
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In today’s global environment, more and more companies are looking at exporting to help grow their businesses. But exporting is often easier said then done. In order to successfully market, sell and ship your company’s products into new markets, you must identify export opportunities, build a sales and marketing structure, and follow the rules and regulations of shipping your goods internationally.

Intermediary-3_Stick_Men_on_puzzle_piecesIn today’s global environment, more and more companies are looking at exporting to help grow their businesses. But exporting is often easier said then done. In order to successfully market, sell and ship your company’s products into new markets, you must identify export opportunities, build a sales and marketing structure, and follow the rules and regulations of shipping your goods internationally.

Because not all companies have the time, knowledge, money or specialized personnel needed to develop an export business, many companies are turning over the job of building an export business to a specialized export sales firm called an Export Management Company (EMC). These export intermediaries give instant access to foreign markets, knowledge and export know-how.

An EMC works as an exclusive export sales department for manufacturers and helps establish a marketing presence in overseas markets. In addition, they may have well-established sales networks overseas that allow them to locate and manage export agents, or representatives, as well as networks of exclusive distributors and dealers in each country market.

Good EMCs have experience in export marketing, foreign travel and other important aspects of international trade. They have the ability to handle all the details of an international transaction. Best of all, their income is directly based on how successfully they help your company export.

Some EMCs work on a commission basis. They will usually want a commission that equals, orA Basic Guide To Exporting even exceeds, your best domestic commission. Other EMCs work on a buy-sell basis and ask for your best U.S. discount plus an extra discount. Some EMCs also ask for contributions such as a 50% - 50% sharing of the costs of exhibiting in foreign trade shows and contributions for advertising and other promotional activities, especially when you are marketing branded consumer products.

Many EMCs require a monthly retainer, especially in the beginning stages of trying to establish export sales since it takes considerable time and effort to introduce unknown U.S. brands in foreign markets.

Although some manufacturers may feel that EMC services are not worth the extra commission, discount or retainer, it is important to remember that EMCs have many costs that even domestic distributors do not including commissions, necessary discounts to their foreign agents, the costs of servicing an export business, overseas travel, and promotional costs.

It is also important to note that many times EMCs receive little or no benefit from the manufacturer's domestic promotion. They need lower prices or higher commission rates since they will be responsible for export promotion and other special expenses.

The advantages of using an EMC are several: export sales come more rapidly, your company’s out-of-pocket expenses are smaller, you can continue to spend your time focused on your domestic sales efforts, and you are learning from an expert export professional.

You can locate EMCs through industry trade associations, trade publications, and the U.S. Department of Commerce Export Assistance Centers throughout the U.S.

Perhaps you will be one of many U.S. manufacturers that have used an experienced and qualified Export Management Company to develop a profitable and growing export business without having to staff an entire export department.

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