We have discussed how to develop sourcing strategy
and and identify key markets in earlier issues. Once you have zeroed
in on target markets and have your sales basket ready - the next
step is to determine how will you sell your products or services
Your sales strategy may be based on one of above or you may go for a mix of several options depending upon product spec and available resources.
You exercise maximum control over all overseas operations by selling directly to buyer. This option is also simple to manage and gives maximum profit margin as there is no third party between you and your buyer. However, it is often the hardest option and expensive too. Normally, it takes more time to establish oneself as selling direct requires time and resources for prolonged period. We shall discuss the details later
Selling through Overseas Agents/Representatives
You appoint commissioned agents or sales representatives
to sell. Agents and reps act as brokers, finding specific
foreign buyers for your product or service in return for a commission.
While they do the selling, they often will not fulfill the orders
or handle details such as collections or shipping.
Selling through Domestic Buying Agents/Buying Office
Major importers prefer to source products through
their own buying office or representative. Having own office or
representative means better control over sourcing process, wider
selection of vendors, competitive price, better quality control
and reliable pre-shipment inspection.
Selling through Export Management Company
Selling through Export Management Company (EMC) or
Export Trading Company (ETC) is quite popular in the West - but
is yet to catch up in India. Software and BPO sectors have a few
well organized EMCs, but in merchandising trade - it is small companies
and consultants ruling the roost. Neverthless, we discuss their
working as large organizations like IMS may decide to visit India
in this age of globalisation.
EMCs tend to work on a commission basis and represent products of
many companies. However, a growing number of EMCs now take title to
the goods they sell, making a profit on the markup. This carries the
possibility that your products may be priced incorrectly, which can
affect your competitive position in the market. Be sure to discuss
issues related to pricing at the outset of any negotiation.
Happy and Productive Surfing
Dr. Amit K Chatterjee
- Newsletter on Business Opportunties from India and Abroad
Vol: 6, Issue 7
; August 12' 2005