The two words together basically mean trading on an international platform. However the first step is to ask your self the important question why before venturing into this type of trade. The objectives must be clear in order to achieve your dreams.
Whether your objective is to:
- Simply spread your wings for increasing profitability in cases where domestic market is not enough for your appetite.
- Utilize your production capacity to the full extent.
- Grab the opportunity to capture a niche market in a foreign country where demand for your goods is high but availability is low, hence an ideal situation for export businesses. On the other hand there might not be a lot of products and services available in your domestic market which you can make available to them through imports.
- Perhaps spread your risks over various markets.
- Boost the image of your domestic company by making it internationally marketable.
- Explore new opportunities that might come your way while doing business internationally.
The next step is to understand the different kinds of players operating in this market apart from the regular importers or exporters and how you will be comfortable and successful.
- Export management companies are those that handle the exports of one or various companies who do not have the know-how or the resources for such a business. They specialize in either products or markets. These companies may even bring in orders, and handle all the marketing, packing and shipping tasks. Sometimes they take the title of the goods and market it or operate on a commission or fee basis if they have not taken the title.
- Export trading company works just the opposite of Export Management Companies. It does not have the goods to sell but seeks out the products for its buyers according to their requirements.
- Import/Export merchant is the international entrepreneur. He is a free agent and does not have any fixed client base. He is a free agent and procures goods from manufactures and sells as his own and hence bears the risks and profits.
