There is a range of strategies that companies can use to export their products to overseas markets and grow their potential customer base.
Indirect exporting is one of these strategies and it has various advantages and disadvantages for exporters. Let’s explore these in more detail.
What is indirect exporting?
Indirect exporting means that a business sells its goods to an intermediary, who in turn then sells those products either directly to customers, or to importing wholesalers.
The simplest means by which a business can export indirectly is to sell to an intermediary in its own country. When a business is selling by this method, it will not usually be responsible for collecting payment from the overseas customer. They will also not normally be responsible for organising the logistics of shipping the goods to their destination country and buyer.
Another means by which they may begin exporting indirectly is to sell products directly to an intermediary based in another country. When a business opts for this kind of indirect exporting, it will be responsible for collecting payment from the overseas intermediary and for arranging the logistics process.
In some cases, the overseas intermediary may request that they are allowed to handle the shipping and logistics process. This might be because they are able to access special transportation rates from in-country carriers with whom they’ve conducted volume business for some time. In this case, the UK business will still be responsible for collecting payment but will have a significantly simplified process for ensuring the goods reach their destination.
What are the advantages of indirect exporting?
If you’re looking to start exporting goods to a new country, then indirect exporting can be a sensible way to begin. You sell your products to an intermediary in the country where you wish to transact business, which then sells your products directly to customers or other importing distributors. You will not know who the end customers are.
Indirect exporting can be an accessible, low-risk way for businesses to begin exporting, or to move into a new country with which they’re currently unfamiliar. It demands minimal involvement in the export process, allowing companies to concentrate on their domestic businesses. The market for your goods in new overseas markets can be field tested, and you can begin to build business relationships with companies in overseas markets.
Depending on the type of indirect exporting you choose you may not have to worry about the logistics of the process.
SSO International Forwarding provides a comprehensive range of export services to help you negotiate customs and successfully trade across borders. We take the complexities out of the process, allowing you to concentrate on your core business. We can outline your options, particularly if you’re exploring exporting for the first time.
To find out more about the comprehensive export services from SSO International Forwarding, contact us today or call +44 01744 410178 or email sales@ssoif.co.uk
