Simply put, the Chinese are more likely to trust that the overseas salesperson knows their product better.Ĭompanies export because it’s the easiest way to participate in global trade, it’s a less costly investment than the other entry strategies, and it’s much easier to simply stop exporting than it is to extricate oneself from the other entry modes. In countries like China, some companies find that-culturally-Chinese consumers may be more likely to buy a product from a foreign company than from a local distributor, particularly in the case of a complicated, high-tech product. Making sure that the distributor favors one firm’s product over another product can be hard to monitor. Often, that’s because distributors sell multiple products and sometimes even competing ones. For example, some companies find that if they have a dedicated salesperson who travels frequently to the country, they’re likely to get more sales than by relying solely on the distributor. However, using distributors to help with export can have its own challenges. Companies use distributors because distributors know the local market and are a cost-effective way to enter that market. In many cases, the distributors take title to the goods and then resell them. Often, distributors represent many companies, acting as the “face” of the company in that country, selling products, providing customer service, and receiving payments. Increasingly, the Internet has provided a more efficient way for foreign companies to find local distributors and enter into commercial transactions.ĭistributors are export intermediaries who represent the company in the foreign market. Many government export-trade offices can help a company find a local distributor. These same reasons make exporting a good strategy for small and midsize companies that can’t or won’t make significant financial investment in the international market.Ĭompanies can sell into a foreign country either through a local distributor or through their own salespeople. It’s a low-cost, low-risk option compared to the other strategies.

In the first year, sales were only $100,000 but then jumped to $1 million in the second year, when Cuffe sold to more than one thousand restaurants, retailers, and grocery stores. Even better, American Airlines began carrying Cuffe’s imported wines on flights, thus providing a steady flow of business amid the more uncertain restaurant market. Cuffe has attributed her success to passion as well as to patience for meeting the multiple regulations required when running an import business.Įxporting is an effective entry strategy for companies that are just beginning to enter a new foreign market. She started her company with $70,000, financed through her savings and credit cards. She also saw a gap in the existing market related to wine produced by indigenous African vintners and decided to fill it. Cuffe got the idea after attending a wine festival in Soweto, where she saw more than five hundred wines from eighty-six producers showcased. Cuffe did some market research and learned of the $3 billion wine industry in Africa. Importing wine isn’t new, but Cuffe did it with a twist: she focused on importing wine produced by black South Africans. Selena Cuffe started her wine import company, Heritage Link Brands, in 2005. Importing is also known as global sourcing. Importing is the flipside of exporting. Importing refers to buying goods and services from foreign sources and bringing them back into the home country. After reading this section, students should be able to …Įxporting is defined as the sale of products and services in foreign countries that are sourced or made in the home country.

Exporter definition