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Every week I receive quite a few enquiries from enterprising
exporters
- How do you get so many overseas trade inquiries for
Indian products ?
- Please tell us how can we find genuine importers
for our products ?
People, very eager and enthusiastic to know whereabouts
of buyers - genuine importers who are serious and most likely to
buy their products.
While it is true that number of business transactions
through Internet is rising rapidly - it is equally true that there
is no short-cut to established business processes. Internet makes
our life that much simpler by providing a cheap, reliable and convenient
mode of communication. However, beyond that it is still that much
of hard work in product sourcing, quality control, marketing, business
correspondence, negotiation etc. etc.
The point I am trying to make is that - selling your
product in international market is a long drawn, systematic process.
It is not as simple as getting a list of buyers through Voodoo magic
or as difficult as Rocket Science - but accomplishment of simple,
well-defined, systematic jobs that will result in a gradual increase
in your overseas business over a period of time. Hard work and perseverance
are the requirements of the day - no quick fix solutions !
Now, to answer our original question 'How to find buyers'
- we need to first understand who are your 'buyers' and exactly
what do they want from you. Understanding their profile will not
only help you in finding the likely places where they can be traced
but also to offer right mix of product and price as also clues on
how to negotiate successfully.
There are mainly following 6 categories of organizations/
people who are likely to buy your product directly or indirectly:
Manufacturer/End-User
Pharmaceutical formulation manufacturer looking to
source bulk drugs, garment manufacturer sourcing fabrics etc. fall
in this category. The buyer is generally well aware of import procedures,
pricing etc. Volumes are usually large and negotiation takes time
to materialize. Since the material will be used in-house, buyer
may provide own specifications. It is not uncommon, when buyer may
decide to enter into collaboration with supplier with buy-back agreement.
Buyer seller relation is comparatively on solid footing (i.e. buyer
does not look for alternate supplier if seller does not commit major
bungling or goof-up).
We know quite a few overseas manufacturers who have
developed lasting relationship with Indian suppliers through initial
contacts at infobanc.com site.
Wholesaler/Trader
Usually a hardened international buyer who knows the
ins and outs of product he/she is buying. The buyer generally has
well-developed distribution line in his country to dispose off imported
products quickly. Generally sensitive to price, looks for alternative
often. Volumes are almost always large - container size at least.
May ask for credit after a few transactions.
At infobanc.com, we constantly track this type of buyers
who do not mind testing new suppliers if price and quality is acceptable.
It is not difficult to track them if you know the usual market places
where these people go for new supplier.
Retail Chains/Supermarkets, Large Brands
These are organized buyers who have well developed
sourcing offices and trained manpower in exporters' countries. Very
particular about quality, delivery etc. Takes quite some time in
negotiation and order placing. Considered very valuable clients
by exporting community in general.
Small Retailer
Before the advent of Internet, small retailers were
happy to buy from wholesalers in their own country as importing
in small quantity did not make economic sense. There were well-defined
distribution channels where retailers used to make reasonable profit
by buying from wholesalers.
By its very nature, Internet has reduced the levels
of distribution in significant amount by removing intermediaries.
Thanks to cheap and convenient communication medium like Internet
and e-mail, small retailers, specially in North America, are now
coming directly in contact with sellers in developing countries
and buying products in small quantity. The risks are higher than
buying from local wholesaler, but profit margin is far too high.
And, there is no dearth of small exporters who do not mind supplying
in small quantity to retailers directly at higher than market price.
These are usually small purchase but at regular intervals. The margins
are also higher.
infobanc.com has probably the largest number of small
retailer/importer in its database of buyers.
Broker/Mandate
Typically, these are representatives of large commodity
buyers who are constantly looking for new sources and lower prices.
They represent buyers who have the money to buy from one continent
and sell at another. North America (Canada and the USA) have plenty
of them. The buyers usually bid for international tenders or secure
orders through their own means and source the products from international
marketplace at a price that can give them healthy profits. Brokers
are usually nearer to actual buyers while a mandate usually represents
a broker.
One needs to be aware of the status of the broker or
mandate - mandates have limited power and prove ineffective in many
cases.
We are in regular contact with a large number of such
broker/mandates who use infobanc.com site to source products
Agent/Distributor
Agent/distributors are not really buyers - they represent
you in a foreign country where you are not able to sell directly.
Because of their intimate knowledge of local market, Agent/Distributor
is considered a formidable part of any export campaign.
Agents know the buyers and represent you as your sales
representative. They usually book orders from local market and collect
commission from sellers. While Agents work on case to case basis,
Distributor stocks your products in anticipation of sales and usually
carries higher risk (and consequently margin) than agents.
Recognizing the importance of agent/distributor in
export campaign, infobanc.com started a separate section for them
and started vigorous campaign to identify and invite commercial
agents towards Indian products couple of years back. Today, large
number of Agents from Europe, Latin America and other counties visit
infobanc.com site regularly and post inquiries.
There are other categories of buyers, however we have
considered only those considered significant in the context of Small
and Medium Sized Enterprises (SME).
Having identified the main categories, we shall discuss
how to reach individual entities in each category in subsequent
articles.
Related Links:
Source: FAIDA
- Newsletter on Business Opportunties from India and Abroad
Vol: 2, Issue 31
January 10' 2002
Author :
Dr. Amit K. Chatterjee
(Amit worked in blue-chip Indian and MNCs for 15 years in various
capacities like Research and Information Analysis, Market Development,
MIS, R&D Information Systems etc. before starting his e-commerce
venture in 1997. The views expressed in this columns are of
his own. He may be reached at amit@infobanc.com
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