Direct exporting and the risks/benefits

Direct exporting is the marketing and sale of goods from one business to another in a foreign country. With direct exporting, a business can control its own foreign operations, interact more directly with foreign customers, and potentially generate larger profits than with indirect exporting. The benefits of direct exporting include the ability to control the entire process; increased profits; increased exports; and increased sales in new markets. For example, by handling the exporting process itself, a business can save money on marketing and promotion. It can also identify and analyze the risks associated with entering new markets, as well as manage its inventory and pricing more effectively. At the same time, there are various risks associated with direct exporting. These include the cost of developing a distribution network, the cost of training foreign staff, and the potential for cultural misunderstandings. There is also the risk of not being able to access the same resources and infrastructure in foreign countries as you have in your home market. Furthermore, due to the high cost of administering international transactions, direct exporting can be much more expensive than indirect exporting.