Direct exporting means you export directly to a customer interested in buying your product. You are responsible for handling the market research, foreign distribution, logistics of shipment and for collecting payment.
The advantages of this method are:
- Your potential profits are greater because you are eliminating intermediaries.
- You have a greater degree of control over all aspects of the transaction.
- You know who your customers are.
- Your customers know who you are. They feel more secure in doing business directly with you.
- Your business trips are much more efficient and effective because you can meet directly with the customer responsible for selling your product.
- You know whom to contact if something isn't working.
- Your customers provide faster and more direct feedback on your product and its performance in the marketplace.
- You get slightly better protection for your trademarks, patents and copyrights.
- You present yourself as fully committed and engaged in the export process.
- You develop a better understanding of the marketplace.
- As your business develops in the foreign market, you have greater flexibility to improve or redirect your marketing efforts.
The disadvantages:
- It takes more time, energy and money than you may be able to afford.
- It requires more "people power" to cultivate a customer base.
- Servicing the business will demand more responsibility from every level of your organization.
- You are held accountable for whatever happens. There is no buffer zone.
- You may not be able to respond to customer communications as quickly as a local agent can.
- You have to handle all the logistics of the transaction.
- If you have a technological product, you must be prepared to respond to technical questions, and to provide on-site start-up training and ongoing support services.
Should you decide to export direct, make sure you have a company-wide commitment, which includes your Import/Export Dream Team to ensure the initiative is fully supported.
Photo credit: Laurel Delaney, Narita Airport, Tokyo, Japan
