Basic Principles of the Exporting Business

Exporting Business

Basic Principles of the Exporting Business

Trade between different groups of people is almost as old as history itself, only the distances have changed. Marco Polo was considered the forerunner of modern trade between countries, he was one of the first exporting business owners. The exporting business today has become a vital part of an industrial nation’s economy.

Who Does the Most Exporting from America?

Although America imports more than it exports, the exporting business accounts for hundreds of billions of These exports go to more than 150 foreign countries. The surprising fact about exporting is that the larger companies and conglomerates have fewer exports than the small exporting businesses. Only about 4% of exports from America are attributable to the large corporations.

What Makes the Exporting Business Lucrative?

Just as it was in the days of Marco Polo, the availability of products and materials makes exporting highly desirable. People who do not have certain commodities will pay top dollar to get them from those who do. Some items that may be available locally are considered more “sexy” or classier when they are imported from another part of the world. Of course, cost has much to do with how marketable any product is.

The Exporting Business Based on the Country

Many countries are better noted for exports of one primary product or resource because they are limited in other areas. A case in point is the countries that have large oil reserves. They must export to get monies to buy things they cannot produce themselves or cannot produce cost effectively. Countries that have mild climates can export fruits and vegetables almost year round, and technological nations supply those that are not as advanced.

The Role of the Export Management Company

Businesses that are more comfortable with producing rather than distributing often hire exporting business management companies (EMC) to take care of the details for them. The EMC is familiar with the export requirements for products, but also takes charge of marketing, advertising, packaging, and shipping. It can also find buyers in other countries and arrange financing. An EMC is often paid on a commission basis as well as a salary.

The Individual Exporting Business

Some businesses are structured to take charge of their own exporting and do quite well working independently. While they assume all the risks for their products, they also have all the profits for sales. Companies that do not diversify heavily usually can handle their own exports, or only need minimal aid from export management companies. Businesses that are located near international ports often are more comfortable with exports.

Those involved in exports have a good understanding of the trade channel, which constitutes how the merchandise gets to the end user. An intermediary who is located in the country where a sale is made can be an asset for an exporter, and handle some of the arrangements for accepting the goods.

If you enjoyed reading about Basic Principles of the Exporting Business then see our next article Import Export Documents.

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