Get to know this procedure in detail and position your company in the foreign market
Before understanding more about the concept of Indirect Export, the company that wants to export must be aware of how the Direct Export operation works.
In this export model, the company interested in a particular product to be exported is responsible for all stages. Thus, the company to export is the manufacturer, the exporter and the shipper and/or distributor of the products. And, throughout the process, which includes from manufacturing, release from government entities and shipping of the goods, only the company name will appear in all phases.
To operate in this model, it is essential to master each stage, such as: market research; negotiation mechanisms with importers, suppliers, local cargo agents, etc; legal, fiscal, tax documentation; trade rules and agreements between countries; packaging regulations and adequate means of transport; financial and customs procedures, among others. It is important to have experience in foreign trade to ensure that all actions are carried out correctly.
The indirect exports are those in which the company uses a specialized intermediary to negotiate with the foreign market, and this service provider must make the connection between this exporting company and the interested importer.
These intermediaries are normally established in the country of the exporting company and are duly authorized to carry out export operations. All precautions in this process, such as contact and transactions with potential importers, transport to the importing country, research, promotion actions and product disclosure, are the responsibility of this intermediary.
In this export model, intermediaries can be of different natures/modalities, such as consortia (groups) of exporters, which are configured as an ecosystem of interested companies (by segment, by foreign market, by product, etc.) which must help each other, sharing costs with professionals providing these specialized services, being an excellent option for self-employed professionals and individual micro-entrepreneurs, for example.
Another type of intermediary is the Exporting Commercial Company (ECE), which can operate in the domestic and/or foreign market. There are many companies in this category currently operating, but it is essential to be aware that not all of them operate under legal registrations and certifications.
In this sense, it is worth knowing that there is, finally, the Tranding Company, as is the case of KGMG/Trading Company.
However, the difference between an ECE and a Trading Company is that all Trading Companies are ECEs but not all ECEs are Trading Companies.
For a company to be considered a trading company, it must present at least a Special Registration Certificate to operate.
Thus, the Trading Company is the company specialized in operations abroad for both import and export.
Thus, for companies interested in inserting their products in highly competitive and regulated markets, it is crucial to rely on the trading company's specialized consultancy.
Among the main benefits are:
· agility in logistical processes that need a qualified ECE;
· outsourcing of personnel at all stages of export;
· quality market research;
· ease of dealing with international operators;
· simplification of procedures that can be bureaucratic for the company;
· investment security, as risks are controlled by the intermediary;
· more assertive profitability by having a qualified exporter.
In the end, the cost-effectiveness of indirect exports is optimized, and the company can focus on its core business, strategic objectives and enter the international market in the right way, making its brand known positively.