Piggybacking your goods or services is another viable indirect export option. With this method you allow another non-competing company, which has a customer and distribution base already in place, to sell your company’s product or service in addition to its own, giving you immediate overseas market access at a nominal expense. For each listed company, take note of how long they have been in business, the number of employees, the products in which they specialize, and the countries to which they export. Lesser Control: The exporter does not enjoy much control over marketing operations. They're likely to have an inside line on which companies are reputable and doing well. In some instances, the overseas agent might request that they are allowed to handle the shipping, usually because they receive special transportation rates from carriers with whom they've done volume business for years. If you are using newspapers, magazines or online advertising, it can be quite expensive for your business since you have to pay a host website to display your advertisement. This situation may adversely affect the product’s … You have limited liability for product marketing problems—there's always someone else to point the finger at! The ETC will then seek out a reputable manufacturer who can handle the demand at an economical price, and then arrange for the transport of the goods to the customer. You can field-test your products for export potential. It allows you to continue to concentrate on your domestic business. Your long-term outlook and goals for your export program can change rapidly, and if you've put your product in someone else's hands, it's hard to redirect your efforts accordingly. EMCs offer a wide range of services, but most specialize in exporting a specific range of products to a well-defined customer base in a particular country or region. We also offer the pros and cons of using an export sales intermediary. Only you can determine which export strategy suits your needs. They generally know who has been in the export trading business for a while. In some instances, your local agent can field technical questions and provide necessary product support. After all, the name of the global game is generating your network of customer relationships. You feel out of the loop. Disadvantages. If you are two or three times removed from a direct relationship with your customers, think twice about how you might get to them directly. The sooner you begin building this foundation, the sooner you will have a flourishing import/export business. This is especially true of telemarketing and door-to-door sales. Laurel Delaney is a former expert for The Balance Small Business, and is the founder and president of Global Trade Source, Ltd. She is also the author of three books on exporting. For instance, when operating online, you need to be conversant with proper search engine optimization techniques to benefit from visits to your page. Better Management: The intermediaries may have established network of sales offices and better marketing and distribution knowledge. At the same time, though, many believe that direct exporting is the only way to maximize control, profits, and market presence. Start your select list of companies that export products similar to your own. You must still collect payment from the customer, but your actual involvement in the transaction is minimal. It’s also harder to establish brand loyalty when you are not interacting directly with your customer. Since indirect marketing is crucial and at the same time difficult, it requires a … Advantages. Under these circumstances, you will not know who your ultimate consumers are. Your content marketing may not achieve its intended purpose by failing to arouse interest or attention to your product. It’s highly unlikely that you’ll see quick results with indirect marketing; it just needs that time to build momentum before you really see any significant results from it. The easiest method of indirect exporting is to sell to an intermediary in your own country. In this case, you will need to arrange for the cargo to be ready by the shipment date. You can track down a good ETC via the same channels recommended above for finding an EMC. One of the demerits of using indirect marketing is that when people access social media sites, they usually want to talk to friends or network with coworkers, not to buy anything. Again, your first and possibly last resort is to search the internet for listings under "Export Trading Companies" or "Export Management Companies.". A good one will act in all respects as a global extension of your ... Trading Companies. The Advantages and Disadvantages of Indirect Exporting. A big disadvantage of indirect marketing is in the high costs of applying this strategy. She has worked as Chief Editor of Business Chronicle, an online magazine based in London. Intermediaries. However, indirect methods, too, have their disadvantages and may cause customer dissatisfaction or intolerance if you apply them in an undesirable manner. And in that time you’re building momentum, you’ll need to put in … It is called a buy-resell arrangement. Some of the downsides and hurdles to overcome when using direct marketing include: Intrusive: Many people find direct marketing annoying and intrusive. By adding an intermediary, you are also increasing the amount of time it takes for your product to reach the buyer. At the very least, they can point you to a good online exporting directory. Disadvantages of Indirect Selling Channel. It is recommended that you choose the method that makes you most comfortable and lets you focus on your business priorities so that you won't be wasting your energy worrying that something isn't working. A good internet search can help you access a list. Skill Requirements. Should My Company Export Products Directly to Its Customers? The high costs can be incurred for publicizing the brand, or the costs for hiring the right people with the relevant skills and capacities for providing good content marketing . This can increase the cost to the consumer, slow down delivery and take control out of the manufacturer's hands. When selling by this method, you are normally responsible for collecting payment from the overseas customer and for coordinating the shipping logistics. Since indirect marketing is crucial and at the same time difficult, it requires a high degree of skill to achieve positive results. Direct Marketing. When selling by this method, you normally are not responsible for collecting payment from the overseas customer, nor for coordinating the shipping logistics. Management Companies. However, with indirect marketing, you are usually not working to push your products or services onto prospective clients. They usually have long-standing customers for whom they source products on a regular basis. The international division of your bank. Diana Wicks is a Canadian residing in Vancouver. It demands minimal involvement in the export process. Disadvantages of indirect sales Break of personal connection between the seller and the buyer; Inability to monitor and track the goods independently; Dependence of the company's reputation on the behavior of the intermediary. An export management company (EMC) is one such intermediary. You lose control over your foreign sales. The intermediary is likely to represent several clients who can help share distribution costs. ETCs are virtually identical to EMCs, but they tend to function on a more demand-driven basis, by which the demand of the market compels them to buy specific commodities. In continuation of indirect exporting methods, here we explore other export intermediary options. If you have no intention of ever selling direct, this process works fabulously. The intermediary might also be offering products similar to yours, including directly competitive products, to the same customers instead of providing exclusive representation. The Disadvantages of Indirect Marketing. If you lack such skills, you may need to pay a professional to provide the service. An export management company (EMC) is one such intermediary. Low Gross Profit Margin vs. Low Net Profit Margin, Tactics Used for Business-to-Business Marketing, Factors That Influence a Company's Digital Marketing Strategy, The Advantages and Disadvantages of Direct Marketing on the Internet, Jym Tarrant: Direct Marketing Strategy: Indirect Vs. Your choice will depend on your goals, your available resources, and the type of business you run. The former will build a reputation based on word of mouth and the goodwill of his customers, while the latter may make money quickly and invest in more offices and employees. Attend a few meetings and talk some shop—somebody's bound to know of an EMC or even run their own. An EMC is highly market-driven, representing your product along with other companies' non-competing products as part of their own import "product line" aimed at the customer base they have created. A good one will act in all respects as a global extension of your sales-and-service presence—more or less what you are attempting to do on behalf of a manufacturer. No matter how you describe it, indirect selling introduces the challenge of channels. Generally, the EMC buys the product from a manufacturer and marks up the price to cover their profit. Challenges of direct marketing. An EMC will carry out all aspects of the export transaction: Finding a good EMC is not that difficult.