Direct Export Essay

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Direct exporting  involves personally handling every aspect of the exporting process from market research and planning to foreign distribution  and collections. Therefore,  a  significant  commitment  of  management time and attention is required to achieve superior results, making this the most ambitious form of exporting. Nevertheless, this approach is probably the best way to maximize profits, obtain the most control over the process, develop closer relationships  to the overseas market, and achieve long-term growth.

A company  usually begins exporting  by treating its export sales no differently than its domestic sales, using existing personnel and organizational structures. A small firm is likely to have just a single export manager who has the responsibility for the full gamut of international activities. As international sales increase,  it is likely to  separate  the  administration of exports from that of domestic  sales. Larger firms or those at advanced stages of exporting may decide to retain an international division or organize along product   or  geographic  lines.  A firm  with  distinct product lines is more likely to create an international department in each product division, while those that have products that have common end users are more likely to organize geographically.

Irrespective of how the firm organizes its exporting efforts, its success in foreign markets  depends less on  the  unique  attributes   of its  products  and more  on  sound  marketing  methods.  Proper  channels to handle direct exporting  include sales representatives, distributors,  foreign retailers, and direct sales to end users.

Sales representatives  are also called manufacturer’s representatives  or a sales agents. They use the firm’s product  literature  and  samples  and  present them to potential buyers. A sales representative  typically handles many complementary lines that do not conflict and works on a commission basis, essentially as a broker assuming neither  risk nor responsibility for servicing the product after the sale. They are usually under a contract that clearly defines the period of the agreement, their territorial  jurisdiction, whether or not they will operate  on either  an exclusive or a nonexclusive  basis,  the  method   of  compensation, and limits on legal authority  of the representative  to obligate the company.

Foreign distributors  are merchants  who purchase goods from an exporter at a substantial discount and subsequently  resell it for a profit. They also generally provide support  and service for the product  and carry an inventory of sufficient supply of spare parts. Distributors maintain adequate facilities and personnel for normal  servicing operations,  and  normally sell a nonconflicting  but  complementary range  of products.  They may resell the product  to local dealers and retailers.

Selling through  foreign  retailers  usually involves consumer  products, and is effective in countries  that have large retail chains such as the United States, Canada, the United Kingdom, and Japan. The technique relies  on  traveling  sales representatives   contacting foreign retailers or mailing them catalogs, brochures, and  other  literature.  This approach  has benefits  of eliminating  commissions,  reducing  travel expenses, and reaching a broader audience. To maximize results, companies using direct mail to reach retailers should integrate it with other marketing activities.

Companies may sell their products  directly to end users  in foreign countries—entities  such  as foreign governments,   banks,  hospitals,   schools,  or  businesses. The buyers can be contacted  either  through trade  shows, international publications,  or through the Commerce Department’s Export Contact List Services. Selling to  end  users  overseas  may  incur additional costs such as shipping, payment collection, and product support and service.


  1. Ann Berg, “Money’s Sordid Tale of Dirty Floats, Debasement and Doom,” Futures (v.35/11, September 2006);
  2. Alan Greenspan, “The Roots of the Mortgage Crisis: Bubbles Cannot  Be Safely Defused  by Monetary Policy Before the  Speculative Fever Breaks on Its Own,” Wall Street Journal (December 12, 2007);
  3. William Greider, One World, Ready or Not (Penguin Press, 1997);
  4. Peter A. McKay, “Scammers Operating  on  Periphery  Of CFTC’s Domain Lure Little Guy With Fantastic Promises of Profits,” Wall  Street Journal (July 26, 2005);
  5. Gregory J. Millman, Around the World on a Trillion Dollars a Day (Bantam Press, 1995);
  6. John J. Murphy, Technical Analysis of the Financial Markets (New York Institute of Finance, 1999);
  7. Pradip Shah, “Dirty Float Begets Dirty Trade” Businessline (June 3, 2004);
  8. Brian J. Stark, Special Situation Investing: Hedging, Arbitrage, and Liquidation  (Dow-Jones Publishers, 1983).

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