Who does what in foreign trade?
Author: Robert
Knowing the difference between key players could make all the difference

Often the definitions of "importer" (buyer) and "exporter" (seller) are unclear due to the many types of companies and organizations engaged in international trade. Here is a breakdown of the main players:

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    An importer (buyer) buys and/or organizes the purchase of products from another country in order to bring them into his/her own country.

  • An exporter (seller) manufactures and/or exports goods (ships out of the country) and issues invoices to collect payment.

  • A manufacturer makes a product. Sometimes it is unclear who the actual manufacturer is, which, in China, makes it a matter of continuing importance.

  • Agents represent either buyers or sellers overseas.

  • A shipping company (or airline) transports goods overseas per the arrangements made between the importer and exporter.

  • An insurance company insures the goods against loss by issuing an insurance policy or certificate.

  • Customs authorities levy import duties and issue customs invoices.

  • Banks oversee and manage settlement of payment.

Variations include:

  • Import/export merchants:  Merchants who do not specialize in any one industry or line of products, but who purchase goods directly from a foreign manufacturer and then resell them fall into this classification. He/she assumes all the risks as well as a large part of the profits.

  • Trading company:  A trading company tries to identify what foreign buyers want to purchase on and then locates domestic sources willing to manufacture and export. A trading company takes title to the goods or works on a commission basis.

  • Export company:  An export company handles all export operations for a domestic company that wants to sell its product overseas.  In some cases, the export company even takes title to the goods.  Most export companies specialize by product and, unless they have taken title to the goods, are usually paid on commission, salary or retainer fee plus commission.

Other players:

When merchandise travels from manufacturer to end user there are many stages in between that can be handled by any or all of the following:

  • Manufacturer's representative: This is a salesperson who specializes in a type or line of products; he/she often provides additional product assistance, such as warehousing and technical services.

  • Distributor or wholesale distributor: This is a company that buys the product you have imported and then sells it to a retailer, representing the classic "middle man."

  • Representatives: They are salespeople who approach wholesale or retail buyers and then pass the sale on to you; unlike a manufacturer's representative, they do not necessarily specialize in a particular product or group of products.

  • Retailer: The person or organization who sells the merchandise to the consumer. 


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Re: Who does what in foreign trade?
by ashish_sukhadia316 on 27 Apr 2009 22:46
Really useful information.

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