Export management companies facilitate the distribution of goods to foreign markets on behalf of other companies. They may purchase goods from manufacturers or negotiate deals with retailers and distribution companies in foreign countries. They must also factor in taxes and transportation costs.
An export management company is a company that facilitates the distribution of other companies’ goods to foreign markets. Typically, these companies export goods on behalf of several other companies. To prevent conflicts of interest, an export management company will not work with companies that compete with its existing clients.
Some companies have in-house export teams who handle the promotion of the company’s products in foreign markets and arrange for the shipment of goods overseas. Many small businesses lack the resources to fund an in-house export team, while some large corporations reduce operating costs by outsourcing these functions to an independent export management company. In some cases, export companies receive a commission based on sales from partner companies. Other export companies actually purchase large quantities of goods from manufacturers and generate revenue by selling these goods at a higher price to foreign buyers. An export agreement may remain in effect 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 agreement.
If an export company purchases goods directly from the manufacturer, its advertising agents are tasked with promoting those products at locations overseas. The company has to arrange for the goods to be sent abroad, and this implies the intermediation of transport agreements with shipping companies and airlines. When the goods arrive in the destination country, the export company’s locally employed agents must arrange for the goods to be shipped directly to customers or stored and sold through resellers. Typically, the goods are sold at a price set during negotiations between the exporting company and the manufacturer.
Many export firms facilitate sales but do not actually buy goods from producers. These companies attempt to negotiate deals with retailers and distribution companies in foreign countries to market and sell products. The export company is usually responsible for arranging the transportation of goods from the manufacturer’s factory or warehouses to storage facilities used by foreign customers. The costs associated with each stage of transportation must be factored into the price of the shipped goods. Shipping companies sometimes offer discounted prices for bulk shipments, in which case the export handling company has an incentive to maximize sales.
There are laws in some countries that require exporting companies to pay taxes or tariffs on certain types of imported goods. An export management company must pay all applicable taxes and factor these costs into price negotiations. Also, in some countries, regulations prevent companies from importing certain types of products. Exporting firms and not manufacturers are responsible for ensuring that exports do not violate local laws.
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