Indirect export of the goods in the international market is done through selling products through intermediaries. The agent will present the product to the customers or import wholesalers. You sell the products to a third party who then takes the product to the international market.
It is the easiest way to start your export business. Tie-ups with the intermediary will support you in selling goods into the international market and get positive revenue through the process. The already established export market will speedily move goods through the channels and generate a positive return.
However, the indirect export is not without the challenges. You must be knowledgeable to understand various aspects of international trade and their limitations. The export business consists of risks the company should be aware of while dealing with overseas customers.
Additionally, restrictions on indirect export also cause concern for some businesses. Thus, identify the advantage of indirect exporting before you conduct the actual deal.
Indirect exporting advantages and disadvantages
Understand the advantages and disadvantages of indirect exporting in India.
- Few staff members require to manage the inventory in Indirect exporting.
- Agents work in the established channels, so they know the overseas market and various distribution channels.
- Broad market coverage is possible.
- Less financial risks.
- You will experience more significant financial risks.
- You have to bear the investment of time and staff members.
- You might get stuck due to limited market coverage.
- Companies cannot sustain longer due to insufficient market coverage and knowledge.
- The low-profit margin could be challenging to maintain longer.
- Your company is entirely dependent on the efficiency of its partners.
- No customer contact.
Indirect exporting and direct exporting both have pros and cons that product selling companies must learn to manage. As the policies of the government change, more ways are introduced to sell the product to the overseas market. Knowledge is the key to success in indirect export, so stay updated about the market. Build ties with the reliable partners of the industry.