when corporations start exporting their products ctu course hero

by Dr. Madeline Monahan IV 4 min read

How much does it cost to start an import/export business?

One of the catch-22s of being in business for yourself is that you need money to make money--in other words, you need startup funds. These costs range from less than $5,000 to more than $25,000 for the import/export business. You can start out homebased, which means you won't need to worry about leasing office space.

What does it mean to run an import/export business?

Now that you know what running an import/export business entails, you need to plan, or target, your market, and determine who your potential clients will be, which geographic areas you'll draw from, and what specific products or services you'll offer to draw them in. This is a very important phase in the mega-trader building project.

What is the difference between an etc and an import/export merchant?

An ETC sometimes takes title to the goods and sometimes works on a commission basis. Import/export merchant: This international entrepreneur is a sort of free agent. He has no specific client base, and he doesn't specialize in any one industry or line of products.

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What are the two methods used by import and export companies?

Import/export management companies use two basic methods to price their services: commission and retainer. Normally, you choose one method or the other based on how salable you feel the product is. If you think it's an easy sell, you'll want to work on the commission method.

What is the mission of an international trader?

As an international trader, your mission is sales--in two different but overlapping arenas: a) selling yourself and your company to clients as an import/export manager for their products, and b) selling the products themselves to representatives and distributors. Success in one of these arenas will contribute to your success in another. Once you've established a favorable sales record with one client's goods, you'll have a track record with which to entice other clients. And, of course, each success will contribute to your own self-confidence, which will, in turn, lend that air of confidence to your negotiations with new prospects.

How does a middleman work in a trade channel?

Now that you're familiar with the players, you'll need to take a swim in the trade channel, the means by which the merchandise travels from manufacturer to end user. A manufacturer who uses a middleman who resells to the consumer is paddling around in a three-level channel of distribution. The middleman can be a merchant who purchases the goods and then resells them, or he can be an agent who acts as a broker but doesn't take title to the stuff.

What do traders do during peak hours?

Some traders act only as sales representatives, finding buyers and taking commissions, but steer clear of the shipping, documentation and financing aspects of the deal. Others are happier offering a full line of services, buying directly from the manufacturer and taking on all the responsibilities of transactions from shipping to marketing. These traders often specialize in either import or export and stick to the merchandise industry they know best.

What is an ETC?

An ETC sometimes takes title to the goods and sometimes works on a commission basis. Import/export merchant: This international entrepreneur is a sort of free agent. He has no specific client base, and he doesn't specialize in any one industry or line of products.

What is the tail end of a trade channel?

Retailer: the tail end of the trade channel where the merchandise smacks into the consumer; as yet another variation on a theme, if the end user is not Joan Q. Public but an original equipment manufacturer (OEM), then you don't need to worry about the retailer because the OEM becomes your end of the line.