Assignment Task:
1. Small companies or new companies in import/export can benefit by using intermediaries. This can be a good approach for a company to expand overseas while potentially minimizing risks. Export trading companies can facilitate the export process that involve documentation, transportation, insurance and risk reduction. An intermediary is in a better position to find foreign markets and buyers for products since they have expertise in export procedures and contacts globally. This will save the company marketing expenses and the screening of potential overseas buyers. Also, the producer or manufacturer's responsibility will end at the delivery dock.
For example, an intermediary company such as American Trading International (ATI), a company based in California since 1995, offers its services to American manufacturers and producers to export their products. The company focusses on the food and beverage industry. ATI helps companies minimize the potential risks in international trade since it exports USA food and beverages to over 80 markets worldwide. The decision to choose between an intermediary or direct export of products needs to be carefully evaluated by the manufacturer or producer. The company needs to take into consideration its own commitment to marketing efforts and its tolerance for risks inherent in direct exporting.
A hybrid approach is another option. A company may make a decision to export directly to neighboring countries such as Mexico and Canada while using indirect export for new overseas markets.
2. Foreign Distributor
The reading states the using a foreign distributor is both the most common and the most consistent channel for smaller US exporters. I think this is because it is a happy medium for most companies. It is relatively direct without being overly complicated. Trying to go direct to retailers means having a team on the ground and having detailed knowledge of the foreign market. Going direct to consumer through the internet means having a transaction for every item sold. Using a foreign distributor allows the exporter to consolidate transactions. Developing a good working relationship with that distributor means you get the benefit of their knowledge of that market, and you benefit from inroads they have made with the retailers.
An ETC or EMC could offer similar benefits. It seems they are useful additions if they can surmount barriers to entry that the exporter could not accomplish on their own. Conversely, it seems they can become a layer of distance between manufacturer and target market. This may be useful if the exporter truly wants to be hands-off (in the selling...attention is still required in setting up the agreements with the ETC or EMC). But for a company that has a sense of its target customer in a foreign country, understanding how to work with a distributor that grants access to that market should be straightforward enough.