Types of Import/Export Businesses

Let’s take a look at the players, there are many variations:

Export management company (EMC):

An EMC handles export operations for a domestic company that wants to sell its product overseas but doesn’t know how (and perhaps doesn’t want to know how). The EMC does it all–hiring dealers, distributors and representatives; handling advertising, marketing and promotions; overseeing marking and packaging; arranging shipping; and sometimes arranging financing. In some cases, the EMC even takes title to the goods, in essence becoming its own distributor. EMCs usually specialize by product, foreign market or both, and–unless they’ve taken title-are paid by commission, salary or retainer plus commission.
Export trading company (ETC):

While an EMC has merchandise to sell and is using its energies to seek out buyers, an ETC attacks the other side of the trading coin. It identifies what foreign buyers want to spend their money on and then hunts down domestic sources willing to export. An ETC sometimes takes title to the goods and sometimes works on a commission basis.
Import/export merchant:

It is a sort of free agent. He has no specific client base, and he doesn’t specialize in any one industry or line of products. Instead, he purchases goods directly from a domestic or foreign manufacturer and then packs, ships and resells the goods on his own. This means, of course, that unlike the EMC, he assumes all the risks (as well as all the profits).

Distribution Considerations

  • Which channels of distribution should the firm use to market its products abroad. 
  • Where should the firm produce its products and how should it distribute them in the foreign market?
  • What types of representatives, brokers, wholesalers, dealers, distributors, or end-use customers, and so forth should the firm use? 
  • What are the characteristics and capabilities of the available intermediaries?
  • Should the assistance of an EMC or ETC be obtained?

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