One of the concerns that companies have as they look to expand their business is overcoming the complexities of exporting products internationally. There are many concerns that can trip up a growing company – as well as literally a world of opportunity.
The Ways to Approach Exporting
- Sell products to someone domestically who then assumes responsibility for selling the product(s) to an international clientele. This approach is no different than a domestic sale for the manufacturing company/original seller. It is the purchasing company that assumes the risk of placing products with the foreign marketplace.
- Using intermediaries to export products. Unlike the first example, the original seller is aware and participatative in the export sale of the product. These intermediaries go by various names. Some of them are Export Management Companies (EMCs), Export Trade Companies (ETCs), International Trade Consultants, etc. Given that the relationship is collaborative between the companies; it is ordinary for the original seller to retain a fair amount of control over the process.
- Direct exporting requires the greatest amount of skill and knowledge to successfully implement. In this arrangement, the selling company retains the responsibility for the entire process. A separate sales and distribution organization is often necessary to meet/fulfill the requirements of this distribution challenge.
Help in making the appropriate determination of which approach to use (and hybrids between two or more of the above are not uncommon) can be sough at http://www.unzco.com/basicguide/c4.html.
Obviously, the critical questions to answer include the following considerations for distribution:
- Which channels of distribution should the company consider in marketing products (and which ones in what countries or regions of the globe)?
- Whether it makes sense to manufacture/product product locally in the market it will be distributed into, or if product should be shippped into the local market?
- What level of support/assistance is required to provide the necesssary support (sale, marketing, operations, etc.)? Is an intermediary a better option than trying to assume total control?
- Is there an opportunity to leverage another company with a complementary product that has an established method of distribution and “piggyback” onto their efforts (by having them sell on your behalf, or in some other way assist in the opening up of the market).
For any company that is considering selling products internationally, it is important that the legal considerations be well understood as the laws governing commerce in the United States may not be consistent with the laws in other countries. While this decision is one that can have significant upside for a company; it can also lead to tremendous upset and difficulties for a company that is ill-prepared for the difficulties of setting up distribution in a foreign country.