How to export through third parties

Exporting through third parties means selling the business’s products to an intermediary such as a wholesaler or distributor. The business might also have a representative who does not buy the products but represents them in the specific market.

Entering into cooperation with another business to carry out exports can offer significant advantages such as transfer of know-how, risk-sharing, equal contribution to required capital, simultaneous penetration in different target markets etc.

Entering into a strategic partnership with the business in the target market can also be extremely beneficial, since businesses with complementary products are usually chosen and existing distribution networks and promotion tools are used.

Even though direct exports may seem more profitable, the existence of intermediaries can mean significant savings for the business in terms of time and money.

One form of importation into the target market is through representatives, who usually represent a specific market and also sell complementary products.

They are authorised to enter into sales agreements on behalf of the businesses they represent and receive commission only on the sales they make. An agreement with a representative in a foreign market helps give the business or product an immediate presence in that market. It usually costs less than exporting directly, while the business retains control of the product and the price at which it is sold. Local representatives can also assist the business by carrying out market research, advising on the transportation of goods, helping penetration among specific categories of customers, and providing information on legal, financial and procedural issues.

A second option for businesses is to sell in foreign markets via wholesalers, who sometimes buy and resell the products and sometimes sell them on commission. They usually specialise in particular products or product categories. In many cases, they promote the products in the markets in question through advertising, trade fairs and personal sales etc.

Lastly, there are also distributors that buy the products and sell them on to customers in the foreign market. They usually set the prices and monitor the progress of the product in the market in question. The disadvantage of selling through distributors is a lower profit margin for the exporter and less control of the position and price of the product. Choosing an intermediary to export with is a crucial decision and there are likely to be many options, so there are many factors to consider. 

These can include:

  • The intermediary’s sales network and how it has developed and expanded over time etc.
  • The segment of the target market that the intermediary covers and how this links to the business’s objectives; the existence of branches or local offices in the target market
  • The variety and the mix of products represented or sold by the intermediary, and how these relate to the business’s products; representation of other products from Greece; minimum sales that can be guaranteed; effectiveness in selling complementary or related products
  • The method of storage or warehousing of products; ease of communication with the intermediary; the organisation of the business; the services that can be offered to the final customer, etc.
  • The selling method followed by the intermediary; how sales progress is monitored; how sales staff are trained.
  • The profile of the intermediary’s customers; who the main customers are and how many of them there are
  • Provision of technical assistance in market research; promotional tools used; sums invested in advertising and other promotional activities; intention of sharing advertising costs; existence of a website and promotion of the products of the businesses represented.

Growth in foreign markets is a long-term commitment for a business and requires hard work, resources and time. This must be accepted first of all by the business’s management.

For any further information or clarification of the above, and for a more detailed briefing on designing a product for export and export procedures, please contact the Business Information & Support Department at Enterprise Greece (Georgios Papastergiopoulos, tel: 210 3355755).

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