Direct exporting means you export directly to a customer interested in buying your product. You are responsible for handling the market research, foreign distribution, logistics of shipment and for collecting payment.
• Your potential profits are greater because you are eliminating intermediaries.
• You know who your customers are.
• Customers know who you are, and feel more secure in doing business directly with you.
• Customers provide faster and more direct feedback on your product and its performance in the marketplace.
• You get slightly better protection for your trademarks, patents and copyrights.
• It takes more time, energy and money than you may be able to afford.
• It requires more "people power" to cultivate a customer base.
• Servicing the business will demand more responsibility from every level of your organization.
• You are held accountable for whatever happens. There is no buffer zone.
• You may not be able to respond to customer communications as quickly as a local agent can.
• You have to handle all the logistics of the transaction.
• You must be prepared to respond to questions at all times, and to provide training and ongoing support services.
Start-up companies generally do not have the money or resources to engage in seeking and negotiating with international distribution partners. Building a network of distribution partners takes time, focus, manpower and capital, all of which are generally in short supply.