Tapping into New and International Markets: Advantages and Disadvantages of Exporting Processes

Advantages and disadvantages of
different exporting processes
Exporting process are the set of procedures
that are executed by firms with a view to
export their offerings in a number of
locations across the globe. In this relation,
there are mainly 2 types of exporting
procedures which can be opted by
organizations for execution of export in
nations.
Both of them are described in a brief
manner as underneath: -
Direct Exporting
This can be referred to as the procedure
of sale of offerings in a new nation in the
absence of middlemen. Hereby, the sale
activities are executed by the firm itself. In
this relation, there are several modes with
the help of which export can be done
(Ibeh, Crick, and Etemad, 2019). These are
acknowledged to be acquisition,
partnership and so on.
 Advantage: This provides
assistance in protection of
trademarks, patent, goodwill and
other IPR.
 Disadvantage: The cost to the firm
for adopting this method is very
high. Further, the risk involved is
also huge.
Indirect Exporting
This can be referred to as a
procedure whereby a firm is engaged in
sale of its offerings in foreign markets with
the usage of intermediaries. Hereby, the
mediator sells the offerings to customers or
wholesalers.
 Advantage: Financial resources
needed to do indirect exporting are
relatively lower than needed in
direct exporting. Further, it
provides effective access to
markets to the firm.
 Disadvantage: Hereby, there is no
control over marketing, distribution
and other activities associated with
sales. Further, there is extensive
risk in relation to choice of
distributor as any adversity would
place a substantial influence over
the company.
Tapping into New and International Markets

Differences between merchandise
and service imports and exports
Merchandise and service import:
This can be referred to as the procedure of
flow of goods and services from one
country to domestic market. This is used
by organisations with a view to gain
growth in rapid course of time (Wu, Ma
and Liu, 2019). The main purpose behind
executing this is to meet the lack of
availability of offerings or resources that
are not available within the confines of
home country.
Merchandise and service export:
This can be referred to as that mode of
business expansion whereby companies
offer products and services to another
market for the purpose of increment in
sales as well as profitability. The main
purpose behind doing so is generating
extensive foreign income for the
entailment of growth and development.
Documentation required while tapping
into new markets
There are certain documents which are
considered important for organisations to
possess while gaining access into a new
market or purchase merchandise from
another country. Some of these documents
are briefly described as follows: -
Letter of Credit: This can be
referred to as a document which is issued
by one bank to another with a view to act
as the guarantee for payment made to a
certain individual under fixed conditions.
This document is taken into use within
international trade for the purpose of
provision of economic guarantee from a
creditworthy bank to an exporter of
merchandise.
Packing List: This can be referred
to as a document encompassing detailed
information about the products to be
exported together with their packing detail.
It is crucial to be prepared by exporters as
it provides the customers with information
regarding the goods ordered along with the
details of quantity.
Commercial Invoice: This can be
referred to as a legal document that stays
between the customers and suppliers,
clearly depicting the good which are sold
along with the due amount on customers
(Wattanakul, Nonthapot and
Watchalaanun, 2019). It is regarded to be
one of the most crucial and important
documents which are taken into use by
customs for determination of custom duty.