Exports through third parties involve selling the company products to intermediaries, who can be wholesale traders or distributors. The company can also have a representative who does not buy its product, but represents them in the specific market.
Partnership with another company to carry out exports, which will offer significant advantages, such as knowhow transfer, risk distribution, equal contribution to the necessary funds, simultaneous penetration in various target markets, etc.
Strategic partnerships with a company in the target market can also be extremely beneficial, since these usually involve companies with supplementary products and they utilize the existing distribution networks and promotion means.
Despite the fact that direct exports may seem more profitable, the existence of intermediaries can result in a significant time and cost saving for the company.
A method for introducing products in the target market is through representatives, who usually represent a specific market and also sell supplementary products.
They are authorized to form selling agreements for the companies they represent and are paid in commission only after the actual sale. An agreement with a representative in a foreign market helps the company or the product to have a direct presence in this market. This usually costs less than direct exports, while the company maintains control of the product and its selling price. Local representatives can help the company and contribute to market research, the provision of advice on issues of goods transport, the penetration in specific customer categories and to the provision of information on legal, financial and procedural issues.
Another alternative for the businessman involves selling to foreign markets through wholesale traders who, in some cases, buy and resell products and, in some others, sell with commission. They usually specialize in specific products or product categories. In many cases, they undertake actions for promoting the products to the actual market, through advertising, participation in trade fairs, personal sales, etc.
Finally, the existence of distributors must also be mentioned, who buy the products and resell them to customers in the foreign market. They usually set themselves the selling prices and undertake to monitor the progress of the product in the market. The disadvantage of selling through distributors consists in decreasing the profit margin for the exporter and lowering the control of the products’ position and price. In order to select the intermediaries with whom the company will cooperate in order to export its products, various factors must be taken into account, since this is a particularly important decision and there may be many potential alternatives.
Some of these factors can be:
- The intermediaries’ sales network, degree of development and expansion over time, etc.
- The part of the target market that they cover and their connection with the company’s targets, the existence of branches or local offices in the target market.
- The product mix and variety that they represent or sell, their relation to the company’s products, representing other products from the Greek market, the minimum sales that they can ensure, their effectiveness in terms of selling supplementary or relative products.
- The product storage or stocking method, the ease to communicate with them, the company’ organization, the services that they can offer to the final customer, etc.
- The selling method they follow, the way they monitor sales, the method for training sales personnel.
- Their customers’ characteristics, who and how many clients they have.
- The provision of technical assistance in market research, the promotion means they use, the amounts they invest on advertising and other promotion actions, the intention to share the advertising cost, the existence of a website and the promotion of the products for the companies they represent through that website.
Development in foreign markets is a long-term commitment for the company and it requires special effort, resources and time. This must be accepted by the company management first and foremost.
