Advantages and Disadvantages of Exporting Process

To have a secure deal in exporting process use of direct methods of exporting is suggested for
Barclays as it lead to more control over sale transaction. Beside this, effective market research and
analysis should also made by Barclays to identify better export opportunities at global market.
M4) Export process
The export process is a lengthy activity that includes several steps. It get started with
having a export order which is a kind of written agreement between exporter and importer. After
that, examination and confirmation of order is made with respect to terms and conditions of
contract. The next step includes the clearance process from central excise and various forms and
legal formalities are needs to be met by exporter. Various documentation are also required at this
stage of export that are as follows:
Letter of credit- it is a written document issued by bank that guarantees buyer's
(importer) payment to seller (exporter) on time and with correct amount.
Packing list- it is a detailed document that states and includes information about all the
product and packaging details contained in each shipment.
Commercial invoice- it is a legal document between the exporter and importer that
clearly shows and describes the information about sold goods and amount and value of export on
which custom duty is levied.
Terms of payment- it is the document that includes all the terms and conditions of
payment of amount that includes period allowed fir payment, amount due, method of payment like
cash on delivery or deferred payment, etc.
Customs document- it includes all the relevant shipping documents like airway bill, bill
of lading, commercial invoice, insurance certificate and other documents required to clear customs.
P5) Advantages and disadvantages of exporting process
Export is process that basically includes sell of goods and services to customers in some
other countries with the aim of having better market share and profits. There two main type of
export process which are explained below with respect to Barclays Plc:
Direct exporting- it that process of exporting where sale of goods are made abroad
without involvement of any middlemen. Under direct exporting, organisation itself takes
responsibility of selling goods overseas and wholly responsible for dealing with foreign firms
directly. Following are the advantages and disadvantage of direct exporting that can be
encountered by Barclays Plc
Advantages Disadvantages
 Profits are more as intermediaries are
eliminated from exporting process.
 Provide greater degree of control
over sale transaction and makes it
more efficient and effective as direct
connection with customers are made.
 Require more time and money to
attract customers of foreign country
without any middlemen.
 Exporting organisation is wholly
accountable for all risks and safety of
logistics in transaction.
Indirect exporting method- it is the method where sale of goods are made with the help
of some of middle men in abroad or foreign location. Use of some independent agents, export
management companies, etc. are made as sale intermediaries who are having the responsibility of
sending and exporting goods at foreign countries. The advantages and disadvantage of indirect
exporting are as follows:
Advantages Disadvantages
 Provides a less risky way off
exporting with the help of an expert
middlemen and sale intermediaries.
 Beside this, less amount of
investment and time is required as
compared to direct investment.
 Reduce the amount the profit as
commission of agent and middlemen
is also included.
 Dilution in control over sale
transaction is also lead by indirect
exporting.
Tapping into new and international Markets