What Is an Export Management Company?
An export management company is a firm that facilitates the distribution of other firm's goods to overseas markets. Typically, these firms export goods on behalf of several other companies. To prevent conflicts of interest, an export management company will not work with firms that are in competition with its existing clients.
Some companies have internal export teams that handle the promotion of the firm's products in overseas markets and arrange for goods to be shipped abroad. Many small firms lack the resources to fund an internal export team while some large corporations reduce operating costs by outsourcing such functions to an independent export management company. In some instances, export companies receive a sales based commission from partner firms. Other export firms actually buy bulk quantities of goods from manufacturers and generate income by selling these goods at a higher price to foreign buyers. An export agreement may remain in place for a number of months or years and the exporting firm normally has exclusive rights to market the manufacturer's products for the duration of the contract.
If an export company buys goods directly from the manufacturer, its advertising agents are tasked with promoting those products in overseas locations. The firm must arrange to have the goods shipped to the foreign location and this entails brokering transportation deals with shipping companies and airlines. When the goods arrive in the destination country, locally employed operatives of the export firm must arrange to have the goods either directly shipped to clients or stocked and sold through retailers. Typically, goods are sold at a price that is set during negotiations between the export firm and the manufacturer.
Many export firms facilitate sales but do not actually buy goods from manufacturers. These firms attempt to negotiate deals with retailers and distribution firms in foreign countries to market and sell products. The export firm is usually responsible for arranging to have the goods transported from the manufacturer's factory or warehouses to the storage facilities used by the foreign clients. Costs associated with each stage of transportation must be factored into the price of the goods being shipped. Shipping companies sometimes offer discount prices for bulk shipments in which case the export management company has an incentive to maximize sales.
There are laws in some countries that require export firms to pay customs taxes or tariffs on certain types of imported goods. An export management company must pay any applicable taxes and factor these costs into the pricing negotiations. Additionally, rules in some countries prevent firms from importing certain kinds of products. Export firms rather than manufacturers are responsible for ensuring that exports do not violate local laws.
Discuss this Article
Post your comments