Build Export Success - Indirect Exporting Options

Indirect Exporting Options

Indirect exporting is not as aggressive an approach to exporting as direct exporting, and a firm may not be able to fully maximize the profit potential in foreign markets.

Brokers

A local export broker works on a commission basis, and is similar to an overseas agent or broker. Usually a specialist in certain bulk commodities or manufactured products, brokers are then in a good position to find buyers for those products in many areas of the world.

Trading Houses

Selling via trading house is appropriate if you do not have the resources to service a distribution channel in the market; if an export market is relatively exotic and requires cultural and market knowledge that you cannot readily acquire; or when you would prefer not to become involved with exporting but would rather deal through an experienced third party.

Trading houses are specialists in exporting. They undertake to market a firm's product by acting as a local export department for the firm. Trading houses may be both exporters and importers. They are knowledgeable about their markets, know the customers' needs, the communication problems in foreign markets, and the cultural problems in the market. They usually handle packing, shipping, and documentation and thus relieve you of many of the tedious tasks required for exporting. A trading house may buy products from you outright and assume all credit and financial risks in selling abroad, or it may be retained on a commission basis, acting on your behalf, with credit and financial risks to be shared with you.

Canadian-based Foreign Buyers or Purchasing Agents

Resident foreign buyers or purchasing agents in Canada act on behalf of their principals abroad. They buy a wide variety of industrial and consumer products and are located in large cities.

Manufacturers

Some manufacturers in Canada buy many components or parts from other domestic manufacturers, either for use in the products they export or to complement their export product line.

Consortia

Many Canadian companies participate in capital projects throughout the world such as dams, schools, airports, or manufacturing plants. These projects require hundreds of different products and services; small firms have the opportunity to be suppliers to them.

Procurement Offices

Some countries buy goods through procurement offices established in foreign lands. These government crown agencies usually procure large quantities of goods, such as agricultural equipment, hotel furnishings, construction machinery, and apparel.