An export trading company (ETC) provides services to support the export process, acting as an intermediary, handling legal requirements, and gathering marketing information. ETCs can be separate entities from the exporting company or set up by the producers of the exported goods. The term ETC is often interchanged with export management company.
An export trading company (ETC) is a company that works with other companies involved in the export industry. The ETC works independently of the company it services for, even though it may have been set up by the exporting company; effectively acts as another branch of the business. These companies provide services to support the export process, such as warehousing, invoicing, and shipping.
Apart from taking care of many of the processes of the actual export, export companies can also take care of other aspects as well. They may act as intermediaries, promote business for exporters or gather relevant marketing information. Many ETCs will also handle relevant legal requirements, such as insuring exported goods and handling relevant legal requirements.
Most exporters deal internationally and having an export trading company that can handle the interpretation and is able to negotiate the various laws and regulations can save you time and effort. Some companies will deal with several export companies, depending on your geographic location. They may even have a different export company for each country they export goods to. This occurs mainly in large export companies.
Foreign trade companies are generally managed in two ways. Most ETCs are separate entities from the actual exporting companies, although there is sometimes a slight crossover. They act as another client of the firm and charge a fee for their services, either through a flat rate or through a commission.
Another form of export trading company is one set up by the producers of the exported goods. These types of groups can be formed to focus on one particular industry or many, depending on the creator company’s type of business. Sometimes these types of export companies are made up of different groups that have the same product. While they may compete for market share, they can save money by sharing costs among other manufacturers, a cost that could be much more if handled by an independent export company.
The term export trading company is often interchanged with the term export management company. This is somewhat of a gray area, as many interpret them differently. The main differences in definition can be narrowed down to function. Export management companies are usually associated with the commercial side of the business, while foreign trade companies, while they may handle the marketing functions, are usually associated with the process of moving and storing product. For all practical purposes, the terms are considered interchangeable.
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