Getting Started In Export

INTERNATIONAL MARKETING

Section 2 -B

Getting Started In Export

          The simplest explanation in going to the export business is that you produce something, find a foreign buyer and sell it.

           Then you need to decide on the mode of export entry to adopt.

Modes of Export Entry:

·         Entry Mode 1: Producer-Exporter

-          You produce the product for export.

-          You carry the inventory.

-          You promote the product.

-          You contact and negotiate with the buyer.

-          You package and ship the goods to the buyer.

-          You are paid on the agreed amount of sales.

·         Entry Mode 2: Exporter- Trader

-          You do not manufacture.

-          You buy directly from the producer or supplier.

-          You carry the inventory.

-          You promote the product.

-          You contact and negotiate with the buyer.

-          You package and ship the goods to the buyer.

-          Your buyer pays you directly.

-          Sometimes, you provide materials, working capital and technology to your supplier.

·         Entry Mode 3: Subcontractor

-          You must meet producer’s (contractor’s). The name of the game in exp[ort is volume which is most often not met by even seasoned exporters. They turn to smaller firms which will produce for them either the whole or partial quantity.

-          Your contractor gives you assistance either in form of raw materials, design, quality specifications, technology and sometimes, the working capital.

·         Entry mode 4: Selling Agent

-          A producer appoints you to act as the producer’s agent. You sell the producer’s products to importers.

-          You represent the interests of the producer.

-          You market the product.

-          You assist the producer in shipment.

-          You prepare the sales documents in the producer’s name.

-          You are paid either in salary or commission.

·         Entry mode 5: Buying Agent

-          You are the importer’s representative. You reside in the exporter’ home country.

-          You source the product from local suppliers based on the buyer’s requirements and specifications.]

-          You negotiate the purchase of the product.

-          You check the product before shipment in the interest of the buyer, and ensure timely delivery of the product.

-          You are paid a salary or commission for services rendered to the importer.

          Many business persons say that being an agent requires the minimum in terms of financial and investment. With a telephone, fax machine and personal computer, you can already be in business.

          Can you be both a buying and a selling agent at the same time? The most cunning business persons would say ‘yes’. But business ethics dictate that you should only be serving the interest of one entity.

          As a start, it will be good to learn the ropes by working first in an export firm before trying it on your own. Some begin as export merchandisers for buying offices, and fortunately find themselves establishing their own.