Export management company

From CEOpedia | Management online

An export management company is one of the types of firm, which acts as the department of the export for one or several manufacturers of noncompetitive products. It transacts business and solicits in its own name for salary or a commission or in the names of the manufacturers it represents. In other words, the manufacturer obtains the advantages of an export department without really having one. An export management company generally has more control and closer cooperation during working with it. There are several advantages to an export management company [1]:

  • consolidated shipments tender freight savings,
  • the manufacturer gains immediate foreign market contacts and knowledge,
  • a line of complementary products might get better appearance than just an individual product,
  • export management companies frequently offer variable costs, which might be much easier for a small or medium-sized corporation to meet,
  • the manufacturer does not have to expand exporting expertise, which saves costs and time.

Indirect approaches to exporting

The main forms of indirect exporting are:

  • export trading companies,
  • export agents or
  • export management companies.

Although there are differences between the export trading company and the terms export management company. There are often used interchangeably. The intermediary company is generally either has an office in your own country that deals with your business or is based in your own country.

Export trading companies

Export trading companies can also offer access to storage facilities and distribution channels. Many trades with Korean and Japan is led through export trading houses such as Samsung, Hyundai, Mitsui and Mitsubishi. Some export trading companies are created to market the products of a group of manufactured overseas. This is common with products such a wine and agricultural products [2].

Export agents

Export agents generally operate by representing the indirect exporters who are not in direct competition with each other. Products are purchased by some type of export agent direct from the manufacturer, repackage them and sell them overseas in their own name. Others are paid a commission on the sales which they generated and sell the products through their own contacts overseas.

Export management companies

Export management companies act either like distributors or agents and provide additional services on a retainer basis or a commission. Some export management companies tender their client companies the amenities of a complete export department. Moreover, some of the larger export management companies will take title to the goods and export on their own account. Handling export documentation and organizing shipping are included by the services offered[3].

Examples of Export management company

  • The Export Management Company (EMC) is a private firm that facilitates the export of goods and services from domestic companies. EMCs are typically retained by the exporter to serve as its export sales force, providing sales and marketing services, developing foreign markets, and managing the export process.
  • Avery Global Trading is an example of an Export Management Company (EMC). This company helps to provide valuable resources and advice to exporters looking to internationalize their business. They specialize in providing comprehensive export management services, such as market research and product pricing, international marketing and logistics, foreign legal and financial services, export compliance, and customs and trade compliance.
  • Ingenious Global Solutions is another example of an Export Management Company. This firm helps manufacturers, distributors, and service providers to export their products to foreign markets. They provide a wide range of services, such as market research and product development, foreign market access and entry strategies, export compliance, and international finance.
  • Trade Logistics Solutions is another example of an Export Management Company. Their services include market research and product development, export compliance, international finance and legal services, foreign market access and entry strategies, logistics, and customs and trade compliance. They specialize in helping companies of all sizes to export their products and services to foreign markets.

Advantages of Export management company

An export management company can offer several advantages to a manufacturer that does not have an export department. These advantages include:

  • Streamlined Processes: Export management companies can help simplify the export process through their expertise. They are familiar with the complexities of international trade and can help manufacturers navigate the paperwork, regulations and language barriers that often come with international business.
  • Access to New Markets: Export management companies have extensive networks that can help manufacturers gain access to new markets quickly. They can provide resources and contacts to help manufacturers export their products to new countries and gain a foothold in new markets.
  • Reduced Risk: Export management companies can help to reduce the risk of exporting by providing risk management services. They can help manufacturers to understand the potential risks associated with exporting and can provide advice on how to manage them.
  • Improved Cash Flow: Companies can use export management companies to manage the payment process, ensuring that they receive payment on time. This can help to improve cash flow and reduce the risk of losses from late or non-payment.
  • Cost Savings: Export management companies can help to reduce costs associated with exporting, such as shipping and customs fees. They can also provide advice on how to reduce costs and help to negotiate favourable terms with suppliers.

Limitations of Export management company

An export management company has certain limitations, including:

  • Limited resources - Export management companies typically have limited resources such as personnel, capital, and expertise, making it difficult to manage large-scale export operations.
  • Limited authority - Because the company works on behalf of the manufacturer, it often has limited authority to make decisions and negotiate terms.
  • Lack of control - The export management company may not have direct control over the product or the export process, resulting in delays or inefficiencies.
  • Lack of knowledge - Export management companies may lack knowledge about a particular market or industry, making it difficult to make sound decisions.
  • Cost - Working with an export management company can be costlier than working with an internal export department due to the fees associated with their services.

Other approaches related to Export management company

An export management company is a type of firm that acts as an export department for one or multiple non-competitive manufacturers. Other approaches related to export management include:

  • Third-Party Export Agents: These agents work independently and are hired by the companies to represent them in overseas markets. They are paid either through a flat fee or via commission.
  • Joint Ventures: Companies can enter into a joint venture agreement with a foreign partner to gain access to foreign markets.
  • Franchising: Franchising agreements allow companies to establish a presence in foreign markets without having to directly manage the operations.
  • Exporting Directly: Companies can also export their products directly, without the help of an export management company.

In conclusion, there are various approaches to export management, such as third-party export agents, joint ventures, franchising, and direct exporting. Each approach has its own advantages and disadvantages, so companies must carefully consider all options when deciding which one to use.

Footnotes

  1. ↑ (A. Alkhafaji 1994)
  2. ↑ ( S. Gerald, E. Duerr 2008)
  3. ↑ (J. Westwood 2012)


Export management company — recommended articles
Trade house — Indirect exports — Insurance intermediary — Bancassurance — Corporate agent — Sales agent — Direct exporting — Reinsurance broker — Large organizations

References

Author: Alicja Ryszka

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