Text I. Opening up export markets

    Once you have selected your overseas market, how do you go about developing it? What steps should you take to obtain sales? Of course, it is possible to try and sell direct to potential customers either by using mail-shots or by advertising in appropriate journals. These methods are not normally effective, however, unless combined with other marketing activities, such as visiting the market yourself or appointing local agents or distributors. Potential customers are not likely to be willing to order a product from a manufacturer they have never heard of, situated hundreds or possibly thousands of miles away, if there is no local representatives to sort out any problems that may arise. Direct mail campaigns to overseas markets need to be coordinated with on-the-spot action.

    Some kind of sales network must also be set up, and the following options are those which you will need to consider:

Regularly visiting the market yourself;

Sending out a member of your sales staff;

Using export merchants or export managers in the UK;

Appointing local agents or distributors;

Setting up a branch sales office abroad;

Licensing a local firm to produce goods to your company’s design;

Establishing a subsidiary or associate company abroad with its own manufacturing and marketing divisions.

Let us now look at these possibilities in more details, to ensure that you make the right decision for your company.

It is certainly advisable to visit the overseas market, but not really practical to rely on this as a sole selling method. For the more complex type of transaction, the customer may expect to see you as you will be able to make immediate decisions about prices and delivery dates.

This is only a realistic possibility if you can afford to have this salesperson in the overseas market for several months each year. Such a salesperson should report back on a weekly basis, but must also have sufficient knowledge and authority to answer questions and make on-the-spot decisions.

Export merchants/ confirming houses/ commission agent in the UK operate in various ways, often under the same roof. They buy goods outright and sell on their own behalf, confirm orders received from abroad (i.e. take care of the financial arrangements) and arrange shipment and insurance for the overseas buyer. Most specialize in particular overseas markets and/ or goods. A development of this approach is the export management company. They act as the manufacturer’s own export department, taking care of every aspect of the procedure from trying to locate potential customers, through arranging suitable payment terms, to shipping and documentation. These firms will handle the products of a number of small manufacturers. There are also buying offices in London which specialize in purchasing goods suitable for departments and chain stores located in the USA and a number of other countries.

There are obvious advantages in using a UK-based export agent or merchant. You are dealing with a business located in the same country as yourself. It can handle packing if necessary, arrange shipment and would normally prepare any special export documents which might be required. However, you must also consider the main disadvantage that you, the manufacturer, are not in direct touch with the customer and therefore have much less control. In the long-term this may prove totally unacceptable, although it can work for makers of standard items such as hardware, fasteners, tools and consumer goods.

Appointing a local agent or distribution is the most common method of opening up an export market. There are two principal types:

the commission agent who will book orders on your behalf, with you issuing invoices direct to the customer;

the importer/ distributor, who will buy from you on his own account and then fix his own price levels.  

Vocabulary notes

appropriate – соответствующий

on-the-spot action – действие на месте

to appoint – назначить

subsidiary – дочерний

to rely on – полагаться

advisable – желательный

to afford – позволять, иметь возможность

immediate – немедленный, срочный

outright – прямо, тотчас же

on their own behalf – от собственного имени

purchasing goods – оптовая закупка товаров

obvious – очевидный

to handle – управлять, организовывать

hardware – скобяные изделия

fasteners – задвижки, застёжки

to issue invoices – готовить, издавать коносамент

on one’s own account – на собственный счёт

 

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