From the course: International Logistics

Export management companies

From the course: International Logistics

Export management companies

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- [Instructor] When a company is just beginning to sell their products globally, it's a good practice to hire an export management company, or EMC. An EMC represents the exporter to potential buyers in a foreign country. They can manage all efforts, including marketing, sales, distribution, delivery, and all required documentation. The exporter can hire an EMC for all these activities or just a part of them, dependent upon the seller's needs and expertise in this area. Most EMCs are small companies located in the exporter's country, and they usually focus on just one country or region and just one or two product lines. For example, an EMC in Italy might market and sell grocery items to retail chains in the United States. For their efforts, the export management company charges a commission on the transaction. The more services provided to the exporter, the higher the commission. Sometimes an export company will buy goods directly from the seller and then sell them to a buyer in a foreign country at a higher price. This is called an export trading company, or ETC. ETCs are normally larger companies which sell products to several countries, so they tend to have offices all around the world. The ETC takes ownership of the goods in the exporting country. They then transport the goods to a foreign country and sell them to the buyer, who takes ownership upon delivery. So for both the seller and the buyer these are local transactions, and that's much simpler for them to manage, because the ETC is responsible for the international transfer. When starting out in global business, it's often a good idea to use an export management or trading company. As your experience with international logistics grows, you can adjust your strategy and take on more responsibilities.

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