Imágenes de páginas
PDF
EPUB
[blocks in formation]

usually more costly both from the standpoint of expense attached to it and from that of the initial blunders which are likely to be committed when business is new, but eventually it pays.

REFERENCES

BÄCHER, E. L. Export Technique. Course in Foreign Trade. Vol. IX, Chap. V.

DUDENEY, F. M. The Exporter's Handbook and Glossary, Chaps. VI, VII. VIII and XIII.

FOWLER, J. F. The Export Merchant. Course in Foreign Trade. Vol. IV, Part I.

HOUGH, O. B.

Practical Exporting, Chap. VIII.

PRECIADO, A. A. Exporting to the World, Chap. VIII.

RICHARDS, C. A. The Export Commission House. Course in Foreign

Trade. Vol. IV, Part II.

WYMAN, W. F. Export Merchandising, Chaps. IX and XVIII.

CHAPTER XVIII

CHANNELS OF DISTRIBUTION IN FOREIGN COUNTRIES

Direct Sales to Customers. Some methods of distribution which are used with a fair degree of success in domestic trade are not well adapted to the sale of goods in foreign markets. One of these methods is that of direct sales from producer to consumer, orders being solicited either by means of catalogues or through canvassers and salesmen visiting offices and individual households. It is obvious that such form of merchandising, whatever its advantages and disadvantages may be in domestic business, is of doubtful value when buyers are separated from sellers by thousands of miles, by barriers of customs tariffs, by differences of language, currency, and ethical and legal concepts. Attempts at establishing direct connections with overseas consumers were made in the past but, as a rule, they were unsuccessful. An exception may be found in the sale of goods to foreign railway and steamship companies, municipalities, plantation owners, manufacturing and mining enterprises. These users of imported goods, who usually buy large quantities at a time, have either available funds to make cash payments or command good credit. Such consumers often prefer dealing directly with foreign producers; it enables them to get into closer touch with exporters and to effect savings on intermediaries' profits. Purchases are sometimes made by them through the invitation of public bids or through the dispatch of purchasing commissions to exporting countries. The latter method was used extensively by the governments of the allied nations during the recent War.

Mail order business is carried on quite extensively among

SALES TO RETAILERS

271

the countries of Western Europe; French, British and German houses often sell goods to foreign customers on a cash-on-delivery basis, a certain percentage of the price usually accompanying the order.

American mail order houses are doing some business in various parts of the world; their total sales, however, are small, and most of their foreign connections are not with overseas customers but with buyers residing in the neighboring countries.

Some manufacturers have found it advantageous to maintain retail stores in the more important cities of Western Europe and South America. The most conspicuous of these are manufacturers of shoes and sewing machines. This method involves large expenses for equipment and maintenance of stock, insurance, depreciation, salaries to sales people; it should not be attempted except after a careful investigation of its merits and drawbacks in each specific

case.

Sales to Retailers. Another method of distribution, the adoption of which in foreign trade presents much greater difficulties than in domestic business, is placing the manufacturer in direct touch with the retailer. The markets of an adjacent foreign country may be so reached, because the proximity of such markets makes it possible for the manufacturer to deal with them somewhat as domestic markets are dealt with. Large department and specialty stores, wherever located, may also be reached directly, as most of these stores have their own resident and traveling buyers abroad. However, the maintenance of direct relations with the rank and file of overseas storekeepers is not possible for the majority of exporting manufacturers and merchants. As a rule, only those who have highly developed foreign sales organizations with branches established abroad can carry on their foreign business without resorting to the services of other middlemen besides the retailers in foreign lands.

Goods most suitable to retail distribution in foreign

countries are: (1) those which do not require any reconditioning or other manipulation after they have reached the consignees; (2) articles possessing comparatively small intrinsic value, but yielding large profits to sellers. Large returns on sales permit the taking of greater risks and the incurring of the additional expenses which are entailed in the establishment of relations with many retailers instead of confining one's business to a few importers and wholesalers. Before the War, many German manufacturers used extensively the method of canvassing the retail trade of South America and the Near East. They were able to carry on their business in this way because of the large number of traveling salesmen whom they employed, salesmen familiar with the language, habits and customs of the people. Although an expensive and hazardous method, it possessed the advantage of having opened to German manufacturers many outlets for their goods which otherwise they would not have had.

Sales to Wholesalers.-Inter-European trade is handled, to a large degree, through wholesalers and jobbers. The main reason for this may be found in the close geographic proximity of one European nation to another. Foreign business on the European continent resembles our interstate commerce if one considers it from the standpoint of dispatch with which letters may be exchanged, samples supplied and personal contact established between buyers and sellers. Accustomed to handling both domestic and foreign business, many European wholesalers, when it comes to overseas trade, object to dealing through intermediaries— importers or exporters; they seek the establishment of direct relations with overseas manufacturers. Whether such relations are desirable for the manufacturer can not be decided a priori. Before quoting prices to and accepting orders from wholesalers and jobbers, a manufacturer must be certain that his sales to them will be sufficiently large to compensate him for the loss of business to general importers whose ill will he is most likely to incur.

OVERSEAS IMPORTERS

273

Overseas Importers. The primary function of overseas importers is to act as intermediaries between foreign shippers and native wholesale distributors; they usually buy on their own account from the exporting manufacturers and merchants, reselling the goods to wholesalers. In those markets where the wholesale dealers have learned the advantages of direct connections with foreign sources of supply, the importers have lost their strategic position; they have become competitors of wholesalers in distributing goods to retailers and to small jobbers in inland towns. Generally speaking, manufacturers exporting directly find it preferable to deal with large importers, their own selling organizations not being sufficiently developed to permit their entering into direct relations with ordinary wholesalers. On the other hand, many exporting merchants prefer selling to wholesalers; by so doing they eliminate one of the links in the chain of distribution and are able to obtain a somewhat higher price. The exporters' knowledge of local conditions in foreign markets permits them to deal advantageously with wholesale distributors, little risk being involved for them in the transaction.

General importers are especially prominent in industrially backward countries like China, Turkey, and West Africa. There the wholesalers are not equipped to do a direct importing trade, and satisfactory financial arrangements can usually be made only with large, reliable importing firms established at seaports and doing an international business. When a market develops, specialization takes place and importers appear who handle only certain classes of merchandise, such as textiles, chemicals, machinery.

One of the comparatively recent phenomena which must be taken into consideration is the rise of native importers in such countries as Japan, India, China, and the Levant; though they are comparatively new in the field and lack the foreign connections and the financial strength of large importing houses, their business is worth cultivating. Many native importers, particularly in Japan, China and India,

« AnteriorContinuar »