BUSINESSPLANNING:AGUIDETOEXPORTING
11
Price
Youwillwanttofactorinallpossiblecostsinvolvedinthemanufacturing,marketing,shippingand
servicingofyourproductbeforeyousettheprice.Thisapproachwillensurethatyourproductwillbesoldata
profit.Herearesomeofthemorecommonpricingconsiderationsyouneedtoconsider:
1.Manufacturingcost–Whatistheunitcostoftheproductyouwishtosell?Regardlessofthenumberof
unitsyousell,onceyouhavetheunitcostprojected,youwillbeabletoestimatethetotalcostofan
order.Youwillalsowanttoestimateafixedcostforyouroverhead.Thiswillincludecostssuchas
propertyexpenses,utilities,marketingandotheroperationalexpenses.
2.PackagingandInsurance–Preparinglabels,instructions,disclosuredocuments,etc.toconformtothe
regulationsofthecountrywheretheproductwillbeshippedwilladdanexpensetothepreparation.
Ensuringtheproductwillnotbedamagedinshipmentwillrequireprotectivepackaging,labelingand
insurance.Ifthetermsofthesalerequirethebuyertoprovidetheinsuranceforthetransaction,you
shouldalwaysrequestevidencethattheinsuranceisinplacebeforeshippingtheproduct.Youmayalso
insuretheproductundera“freightforwarder’s”policyforafee.
3.Shippingcosts–Ifyouareusingafreightforwarder’sservicestodeliveryourproducts,theywill
provideyouwithanitemizedlistingoftheirfees. Ifyouarehandlingtheshipping,yourcostswillvary
dependingontheagreeduponINCOTERMSbetweenthebuyerandseller.INCOTERMSisan
abbreviationforInternationalCommercialTerms.INCOTERMSdefineresponsibilitiesofsellersand
buyersforthedeliveryofinternationalgoods.
4.Commissions–Ifyourproductisbeingsoldbyagentsordistributors,youshouldincludethefeeor
percentageofsaletheyreceiveforclosingthesale.Otherfactorsinthiscategoryincludeanydiscounts
orallowancestheagentsordistributorsarepermittedtogivethecustomertoinducethemtobuyyour
product.
5.Tariffs–IfyouareshippingtoacountrythathasenteredintoafreetradeagreementwiththeU.S.,
tariffs maynotbeanissuewhendeterminingyourproduct’sfinalcost.However,shippingtocountries
withoutafreetradeagreementmayrequireatariffbeimposedonyourgoods.Thecountry’stariff
dutiesandtaxratesmustbefactoredintotheoverallcostofyourproduct.Moreinformationontariffs
canbefoundatwww.export.gov.
6.Costoffinancingatransaction-Whenextendingcredittermstoyourcustomer,youwillneedtofactor
inthecostoftheworkingcapitalforthelengthoftimebeforepaymentisreceived.Ifyoubuycredit
insurance,allowforthiscost.
7.CurrencyExchange–Anyfeesrelatedtoconvertingtheforeignbuyer’scurrencyintoU.S.dollars
needstobeincluded.
8.Othercosts–Thisisa“catch-all”categoryforanyexport-relatedcostnotalreadyshown.Typical
expensescouldbestoragecharges,communicationscharges,translationservicesandother
miscellaneouscostsassociatedwiththeselling,producingandshippingofyourproduct.
Onceyouhaveestimatedandcompiledallexpensesassociatedwithyourtransaction,youwillwanttoadd
yourprofitmargintothesecosts.Thistotalwillbetheexportpriceyouwillquotetoyourcustomer.
Ifthepriceishigherthanthevalueperceivedbythecustomer,theproductwillnotsell.Anadjustmentin
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BUSINESSPLANNING:AGUIDETOEXPORTING
12
profitmarginshouldbeconsideredtoinfluencetheirdecisiontobuy.However,youdowantyourpricetore-
flectyourproduct’soverallquality.Anotheroptionfortheselleristooffernon-priceincentivestothebuyer.
Thismayincludebetterpaymentterms,customerserviceoptionsaswellasconcessionsonotherservicesasso-
ciatedwiththesaleoftheproduct.
Naturally,yourpricingwillhavetobesomewhatcompetitiveinthemarket.Makesureyourcompetitors’
pricesineachpotentialexportmarketareinlinewithwhatyouintendtocharge.
Promotion
Promotingaproductinaforeignmarketrequiresattentiontothedifferencesfoundineachmarketor
country.Generallyspeaking,youwillneedtoevaluatethefourmostcommonmethodsofpromotion,which
are:
• PersonalSelling–Willyouuseagents,distributors,employeesoramixofallthesehumanresources?
• Advertising–Howwillyoureachyourmarket?Internet?Print?Media?Anadvertisingstrategymust
beformulatedbasedonyourmarketresearch.
• DirectMarketing–Themessageyouaredeliveringisaimeddirectlyattheconsumer.Thiscanbe
accomplishedthroughemail,mobiledevicesorpostalmail.
• Publicity–Creatinganeventorsituationthatisnewsworthyandmaydrawtheattentionofthemediais
consideredpublicity.Somemethodsofcreatingpublicitywillhaveacostassociatedwithit,suchasa
sponsorship,arranginganexhibitionorsomeothertypeofevent.Othermethodssuchasgivinga
speech,receivingorpresentinganaward,releasingareportandotherattention-grabbingactions
oftentimeshavelittleornocostassociatedwiththem.
Allformsofpromotionhavetwomainobjectives:
1.Increasethepotentialconsumer’sknowledgeandawarenessoftheproductanditsbenefits.
2.Motivatethepotentialconsumertotakeactionandpurchasetheproduct.
Youmaywanttoevaluatehowyourcompetitorspromotetheirproducts.Basedontheirlevelofsuccess,
youmaychoosetoimitatetheirpromotionalapproach.Aswiththedomesticmarket,youwillwanttofactorin
seasonalfluctuationsbasedonthenatureanduseofyourproduct.
Placement
Howyoudistributeyourproductinacountryisdeterminedbyitsregulations,culture,competitionand
distributionpoints.Youmustselectthebestmethodofdeliveringandstoringyourproducteasilyandconve-
nientlyforthecustomer.Directshippingandretailstoresaretwoofthemostcommonmeansofmakingyour
productavailabletoexistingandnewcustomers.Again,whatyourcompetitorsdomayinfluenceyourdecision
toimitateordifferentiatetheplacementofyourproduct.Marketresearchwillhelpyoudetermineitsplace-
ment.
Withyourresearchcomplete,thenextstepintheprocessistodevelopanexportplan.
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13
WRITINGANEFFECTIVEEXPORTBUSINESSPLAN
Onceyou’vemadeacommitmenttoexport,youroverallVision,MissionGoalsandObjectivesmustbe
clearlydefined.Anexportplanisanextensionofyourbusinessplan.Itenablesyoutoevaluatethepotential
benefitsandriskstoyourbusiness,anddescribestheapproachyouwilltaketoreachyourinternationalsales
objectives.Itfocusesonthestrengths,weaknesses,opportunitiesandthreatsyourcompanywouldfaceina
foreignmarket.Anexportplanshouldhelpyoudefineyourobjectivesclearlysothatyoucanusetheright
tacticstoreachyourgoals.Inaddition,itwillgiveyoumorecredibilitywithlenders,whowillaskyouto
proveyourcapacityforexporting.
Theplanshouldspelloutwhichcountriesareyoutargeting,whatopportunitiesexistthere,whoyour
competitorsareandhowyouwillmarketanddistributeyourproductsineachlocation.Itshouldalsostate
whetheryouwillneedtoadaptyourproductsfortheforeignmarket,howyouwilldetermineyourexportsales
priceandhowmuchtimewillberequiredtomeetyourobjectives.Theplanshoulddescribethestaffinglevels
neededtoimplementyourexportinitiative,howyouplantoreachthetargetmarket-throughdistributorsoran
on-sitesalesteam-andhowyouwillevaluateresultstomodifyyourplanwhenneeded.
SeeAppendixA:OutlineforanExportPlanforhelpwithoutliningyourbusinessplan.
Foranin-depthlookatcreating/writingacompletebusinessplan,pleasesee“YourBusinessPlan”on
Page38.
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BUSINESSPLANNING:AGUIDETOEXPORTING
14
EXPORTINGANDE-COMMERCE
Theinternethastransformedhowbusinessisdoneintheworldtoday.E-commerce(thebuyingandselling
ofgoodsandservicesthroughtheinternet)hasenabledsmallandmedium-sizedbusinessestocost-effectively
accesstheglobalmarketplace.Thenumberofcompaniesandpeopleusingtheinternettoconductbusiness
continuetogrowrapidly.Itisestimatedthatmorethan2.2billionpeopleaccessedtheinternetbytheendof
2011.*
*Source:www.internetworldstats.com
Marketingontheinternetcanreducevariablecostsformanycompanies.Havingavirtualpresencein
countriesaroundtheworldenablescompaniestoavoidmarketdevelopmentcostscommonlyassociatedwith
havingaphysicalpresenceinacountryorregion.Costsassociatedwithacceptingpayments,handlingorders,
servicingproductsandothermarketdevelopmentactivitiesareusuallylessthanmaintainingsalesandservice
centersabroad.
Therearevarioustypesofwebsitesbeingusedtodaytotransactbusinessviae-commerce.Someofthe
mostcommonwebsitesare:
Informational
Theearliesttypeofwebsitedevelopedtopromotebusinessinternationallywastheinformationalsite.This
sitepromotestheproductsandservicesofacompanybyprovidingdetailedinformationmuchthesameasa
multi-colorcorporatebrochure.Contactinformationisprovidedonthesitetohelptheprospectivecustomerin
thepurchasingprocess.Theinformationalsiteisalowcostoptionforthesellersinceitdoesnotrequirethe
security,encryptionandothersoftwaresystemsthatarerequiredtoprocessonlinetransactions.Asaresultof
havinga“low-tech”approachtomarketingacompany’sproductsandservices,regularmaintenanceofthesite
isusuallylesscostly.Thistypeofsiteworkswellwithproductsandservicesthatcannotbesoldonline.
Transactional
Transactionalwebsitesareconstructedforthepurposeofprocessingasale.Thesellerwillbuildasitewith
extensiveinformation,pictures,technicalspecificationsandpricingtoinducethebuyertocompletethe
purchaseonline. Companiesmustbecognizantofthevariouspaymentpracticesusedbycountriesaroundthe
worldtoenablebuyerstocompletethetransaction.Themostcommontypesofpaymentmechanismsarecredit
cards,electronicfundstransfersandthirdpartytransfers.Someofthesepaymentmethodsenablethesellerto
processthetransactionintheseller’spreferredcurrency,calculatingtheexchangerateatthetimeofthe
transaction.
VirtualMarketplaces
Thesewebsitesrelyuponthirdpartiestoconstructvirtualsiteswheretherearenumeroussellersofferinga
broadarrayofproductsandservices.Thethirdpartywillnormallybrokerthetransaction,providingtheseller
withanefficientwayoffindinglargegroupsofbuyers.Thistypeofsiteminimizestheseller’scostby
eliminatingtheexpenseofconstructingatransactionalsite.Typesofvirtualmarketplacesincludeauctions,
mallsandmatchingservices.
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BUSINESSPLANNING:AGUIDETOEXPORTING
15
OtherE-CommerceConsiderations
Businesseslookingtoselltheirproductsandservicesoverseasviae-commercemustcustomizetheir
websitetothelanguage,laws,customs,currencyandmeasurementstandardsoftheirtargetmarkets.Although
Englishisconsideredaninternationallanguage,translatingawebsiteintothelanguageofatargetedcountry
willenhancebusinessdevelopmentopportunities.Thisoptionwillenablepotentialcustomerstosearchand
accessyourinformationintheirlanguage.Whenyouselectthedomainnameforyourwebsite,youmaywant
toconsidermakingitmultilingual.
Beforeadvertisingonyourwebsite,youshouldresearchanyrestrictionsorlawsplaceduponcompanies
bythecountriestowhichyouaremarketing.Regulatedproductsmayhavedisclosurerequirementsand
limitationsonanyclaimsyoumakeabouttheproduct.Thesameholdstrueforproductsthatmayrequire
governmentapprovaltobesoldinthecountry.
Severalcountrieshavelawspertainingtothesendingofunsolicitedemailmessagesforthepurposeof
sellingproductsorservices.Thismarketinginitiativeiscommonlyknownas“spamming.”Toavoidbeing
labeledasaspammerandtheriskofbeingsubjectedtopenaltiesorhavingyourmessagesblockedfromtheir
targeteddestination,besuretoofferanopt-outfeatureinyourmessage.Don’tusedeceptioninthesubject
sectionofyourmessage,andproperlyidentifyyourcompanyorwhoyouare.Respectyourrecipient’swishes.
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BUSINESSPLANNING:AGUIDETOEXPORTING
16
FINDINGQUALIFIEDINTERNATIONALBUYERS
Inconductingyourmarketresearch,youconsideredmanyfactorstohelpyoudeterminewhichmarkets
wouldbebestsuitedforyourproducts.Thisresearchhelpedyoutonarrowalengthylistofpotentialmarkets
toaselectfew.Indevelopingyourexportbusinessplan,yououtlinedyourstrategiesforpenetratingthose
markets.
Followingmarketresearch,youcompletedyourmarketingresearchtodeterminethestrategiesyouwill
usetoattractnewcustomersforyourcompany.Youincorporatedthesestrategiesintothemarketingplan
sectionofyourExportBusinessPlan.Basedonyourresearch,puttingthesestrategiesintoactionshould
generatecustomerswhoareinterestedinbuyingyourproducts.Theywilllearnaboutyourproductsthrough
yourwebsite;fromemailmessagessentbyyou;socialmedialikeFacebook,LinkedIn,TwitterandYouTube;
salesrepresentativesanddistributors;tradeshowsandtrademissions;telephonecalls;andfromin-person
visits.However,notallpotentialbuyersarelegitimatebuyers.Manyexportingcompanieshavebeentrickedby
unscrupulous“buyers”toshipproductbeforereceivingsomeformofpartialorcompletepayment.Inmost
cases,oncetheproductisdelivered,theseller’schancesofgettingpaiddropsconsiderably.Tominimizethis
risk,exportersshouldidentifyandqualifytheirbuyers.
TheU.S.DepartmentofCommercehelpsexportersidentifyandqualifyleadsforpotentialbuyers.Itoffers
avarietyofprogramsdesignedtoprovidethesellerswithenoughinformationanddatatoqualifythebuyer.
TheU.S.DepartmentofCommercehasanextensivenetworkofcommercialofficersworkinginmostofthe
countriesaroundtheworld.Abriefsummaryoftheirprogramswillfollow.Foradditionalinformationabout
theseprograms,pleasecontactthenearestU.S.DepartmentofCommerceExportAssistanceCenter.
YoumayalsocalltheTradeInformationCenterat800-USA-TRADE(800-872-8723)orvisitthemonline
atwww.trade.gov.
BuyUSA.govMatchmaking
BuyUSA.govMatchmakingisaconvenientonlineprogramoftheU.S.CommercialServicethatmatches
U.S.exporterswithbuyersandimportersinoverseasmarkets.Basedontheexporter’sprofilesubmittedto
BuyUSA.gov,heorshewillreceivenotificationofinformationonpotentialbuyersintheiridentifiedmarket.
Furtherinformationcanbefoundatwww.buyusa.gov.
CommercialNewsUSA
CommercialNewsUSA(CNUSA)istheofficialU.S.DepartmentofCommerceshowcaseforAmerican-
madeproductsandservices.Theprogramprovidesworldwideexposureforacompany’sproductsandservices
throughanillustratedcatalog-magazineandthroughelectronicbulletinboards.Formoreinformation,visitthe
CNUSAhomepageatwww.thinkglobal.us/.
FeaturedUSExporters
FeaturedUSExporters(FUSE)isadirectoryofU.S.ProductspresentedonthewebsitesofmanyU.S.
CommercialServiceofficesaroundtheworld.Itprovidestheexporterwithanopportunitytotargetmarketsin
specificcountriesinthelocallanguageofbusiness.Todetermineifyourcompanyqualifiesforthisservice,go
towww.buyusa.gov/home/fuse.html.
CustomizedMarketResearch
CustomizedmarketresearchreportshelpU.S.exportersevaluatetheirsalespotentialinamarket,choose
thebestnewmarketsfortheirproductsandservices,establisheffectivemarketinganddistributionstrategiesin
theirtargetmarkets,identifythecompetition,determinewhichfactorsaremostimportanttooverseasbuyers,
BUSINESSPLANNING:AGUIDETOEXPORTING
17
pinpointimpedimentstoexportingandunderstandmanyotherpiecesofcriticalmarketintelligence.Additional
informationonhowtoorderareportcanbefoundatalocalExportAssistanceCenterorwww.export.gov/eac/.
GoldKeyMatchingService
TheGoldKeyMatchingServiceisacustomizedbuyer-findingsolutionofferedbytheU.S.Commercial
Serviceinkeyexportmarketsaroundtheworld.Theserviceincludesorientationbriefings,marketresearch,
appointmentswithpotentialpartners,interpreterservicesformeetings,assistanceinclosingadeal,shipping
thegoodsandgettingpaid.FormoreinformationabouttheGoldKeyMatchingService,contactalocalExport
AssistanceCenterorvisitwww.export.gov/eac/andtype“goldkey”intothesearchboxatthetoprightcorner
ofthepage.
InternationalCompanyProfiles
AnInternationalCompanyProfile(ICP)isabackgroundreportonaspecificforeignfirmthatisprepared
bycommercialofficersoftheU.S.CommercialServiceatAmericanembassiesandconsulates.Thesereports
provideawidevarietyofinformationonaforeignfirmincluding:yearestablished,relativesize,numberof
employees,generalreputation,territorycovered,languagecapabilities,productlineshandled,principalowners
andawealthoffinancialandtradereferences.Toorderaprofile,contactalocalExportAssistanceCenteror
visitwww.export.gov/eac/andtype“internationalcompanyprofile”intothesearchboxatthetoprightcorner
ofthepage.
InternationalPartnerSearch
Afteryouprovideyourcompany’smarketingmaterialsandbackgroundinformation,theU.S.Commercial
Servicewillprovidealistoffivepre-screenedcompaniesthatmatchupwellwiththeproductsandservices
youareselling.TheInternationalPartnerSearchallowsyoutoobtainhigh-qualitymarketinformationin15
days.Theinformationincludesthepotentialpartner’ssize,sales,yearsinbusinessandastatementfromeach
potentialpartneronthemarketabilityofyourproductorservice.Formoreinformationaboutgettingan
InternationalPartnerSearch,contactalocalExportAssistanceCenterorgotowww.export.govandtype
“internationalpartnersearch”intothesearchboxatthetoprightcornerofthepage.
InternationalBuyerProgram
TheInternationalBuyerProgram(IBP)supportsmajordomestictradeshowsfeaturingproductsand
servicesofU.S.industrieswithhighexportpotential.CommercialServiceofficersrecruitprospectiveforeign
buyerstoattendselectedtradeshows.Theshowsareextensivelypublicizedintargetedmarketsthrough
embassyandregionalcommercialnewsletters,catalog-magazines,foreigntradeassociations,chambersof
commerce,travelagents,governmentagencies,corporations,importagentsandequipmentdistributors.Each
year,theU.S.CommercialServiceselectsandpromotesmorethan30tradeshowsrepresentingleading
industrialsectors,includinginformationtechnology,environmentalproductsandservices,medicalequipment
andsupplies,foodprocessingandservices,packaging,buildingandconstructionproducts,sportinggoodsand
consumerproducts.Formoreinformation,visitwww.export.gov/ibp.
TradeFairCertificationProgram
TheU.S.DepartmentofCommerceTradeFairCertificationProgramisapartnershiparrangementbetween
privatesectorshoworganizersandtheInternationalTradeAdministrationtoassistandencourageU.S.firmsto
promotetheirproductsatappropriatetradefairsabroad.CertificationofaU.S.organizersignalstoexhibitors,
visitorsandthegovernmentofthehostcountrythattheeventisanexcellentmarketingopportunityandthat
participantswillreceivethesupportoftheU.S.government.Formoreinformation,visit
www.export.gov/tradeevents.
BUSINESSPLANNING:AGUIDETOEXPORTING
18
TradeMissions
TheU.S.DepartmentofCommerceorganizesorsupportsnumeroustrademissionseachyear.The
missionsinvolvetraveltoforeigncountriesbyU.S.companiesandCommerceDepartmentemployees.
Participantsmeetfacetofacewithprescreenedinternationalbusinesspeopleinthemarketsoftheirchoice.
Formoreinformation,visitwww.export.gov/trademissions.
InternationalCatalogExhibitionProgram
TheU.S.CommercialService’sInternationalCatalogExhibitionProgramoffersU.S.companiesa
convenient,affordablewaytostimulateinterestintheirproductsandserviceswhileneverleavingtheoffice.
CommercialServicetradespecialistslocatedininternationalmarketswilltranslatethecompanyprofileinto
thelocallanguage,displaythecompany’smarketingmaterials,collectsalesleadsfrominterestedlocalbuyers
andassisttheU.S.companyasitfollowsupwiththelocalcontacts.Formoreinformationonalltradeevent
programsofferedbytheU.S.DepartmentofCommerce,visitwww.export.gov/tradeevents.
BUSINESSPLANNING:AGUIDETOEXPORTING
19
HOWTOSELLYOURPRODUCT
Therearevariouswaystosellyourproductoverseas.Hereiswhereyourmarketresearch,marketingre-
searchandexportbusinessplanplayanimportantroleindetermininghowyousellyourproduct.
DirectExporting
Simplystated,thismethodofexportingrequiresyoutoselldirectlytothebuyer.Whetheryougenerate
newbusinessleadsbyhavingasalesteam,ane-commercemarketingstrategyorawebsite,thebuyeris
dealingdirectlywithyou.Ifyoudonothaveanintermediaryinthetransaction,yourprofitpotentialishigher
andyouwillhavetheopportunitytobuildacloseandlong-lastingrelationshipwiththebuyer.Yourcompany
willhavecompletecontrolofthetransaction.However,thereisacostinvolvedindirectselling.Thecostisin
theamountoftime,humanresourcesandotherresourcesyourcompanywillhavetodedicatetosupport
internationalselling.Asignificantamountoftimemustbededicatedtotheexportprocessinorderforittobe
profitable.
IndirectExporting
Thismethodofsellingutilizestheservicesofotherpeopleorcompaniestorepresentandsellyourproduct
overseas.Advantagestoindirectsellinginclude:immediateaccesstoforeignmarkets;benefittingfromthe
experienceofathirdpartythatisactivelysellingproductsinforeignmarkets;workingwithprofessionalswho
haveestablishednetworksofdistributors,agentsandbuyerswhomaybeinterestedinsellingand/or
purchasingyourproduct.Themaindisadvantageisthatyourelinquishdirectcontroloverthetransaction.The
intermediaryishandlingthesaleandyouarerelyinguponthemtorepresentyouinaprofessionalmanner.If
theydonotperformthetransactioninanappropriatemanner,yourrelationshipwiththebuyerisjeopardized.
Futuresalesmaybelostifthereispoorservice,inaccurateinformationgivenorproductsarepriced
improperly.
Herearesomeofthemorecommonexporttradingcompaniesandrepresentatives:
ExportManagementCompany(EMC)-Anexportmanagementcompanyessentiallyfunctionsasan
exportdepartmentforacompany.Itactivelyseeksnewbusinessopportunitiesthroughitsnetworkofcontacts,
representingyourproducteitherinyourownname,orinitsname.ManyEMCsspecializebyaspecific
country,regionorproduct.Thislevelofexpertiseprovidesaccesstomarketsthatmayrequiresignificant
planning,preparationanddevelopment.
ExportTradingCompany(ETC)-Anexporttradingcompanyoftenisdemanddriven.Ittendsto
performlikeanindependentdistributor,identifyingamarketforaspecificproductandthenfindingU.S.
companieswhocanproducetheproducttothecustomer’sspecifications.TheETCwillcanvastheforeign
marketsthroughconstantcontactwithitscustomersanddistributors.Itwillthentrytolinkupthebuyersand
sellerstocompletethetransaction.
ExportAgents(EA)-Anexportagentbuysproductsdirectlyfromthemanufacturer.Heorshethen
packagesandlabelsitaccordingtotheirownspecifications.Theproductsarethensoldthroughtheagent’s
networkofcustomersinhisorherownnameandtheagentassumesalltherisksassociatedwithit.
BuyingAgents(BA)-Abuyingagentusuallyrepresentsforeignfirmsthatareinterestedinpurchasinga
specificgroupofproducts.Buyingagentstendtobuyinvolumeandworkonacommissionbasis.Sometimes
thebuyingagentwillrepresentaforeigngovernmentagency.
BUSINESSPLANNING:AGUIDETOEXPORTING
20
ChannelsofDistribution
Afteryouhavedecidedhowyouwillexport,aneffectivechannelofcommunicationmustbeselected.
Herearesomeofthetypesofdistribution:
Distributors-Adistributorpurchasesyourproductatadiscountandresellsitforaprofit.Youragreement
forthedistributortosellyourproductisformalizedbyacontract.Distributorswilloftenprovidethenecessary
support,serviceandinventoryforyourproduct.
Representative-Apersonwhohasauthoritytomakecommitmentsonbehalfofyourcompany.
ForeignRetailersandEndUsers-Somecompaniesengageinexportingbysellingdirectlytomajor
retailbusinessesorendusersinforeigncountries.Traveltotheretailer’sbusinessisusuallyrequiredtobuild
theserelationships.
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