Export Guide Essay
7.1 When exporting indirectly, is it better to use a merchant or an agent in the export marketing channel? Explain.
When exporting indirectly, whether it is better to use a merchant or an agent when exporting depends on the objectives and needs of the exporter. A merchant takes title to the goods and assumes most of the risk. In return for this, the merchant consumes a greater share of the return, receiving a greater share of the producer’s profit margin. This can be justified for a producer who has little foreign market and export knowledge or is very risk adverse. An agent does not take title to the goods and so most of the risk remains with the producer. Agents act by bringing buyers and sellers together without assuming the …show more content…
7.8 ‘The decision facing the export marketer concerning establishing a foreign-based sales subsidiary is a difficult and complex one to make.’ Discuss.
A foreign sales subsidiary is a separate entity