An Export Channel less Traveled

​During our September 30 Introduction to Exporting seminar at the Minnesota Trade Office http://mn.gov/deed/business/ I explained the existence of multiple channels of distribution to export markets.  The event was well organized and attended.

​I was surprised that several of the participants had not heard of an Export Management Company (EMC).  In its simplest form an export management company is an outsourced international sales department.  The goods produced locally by the manufacturer are sold to the EMC who then either exports to a third party dealer/distributor or end user.
The functions of the EMC are widespread and variable, they are typically responsible for:

1. Completing export documentation
2. Organizing shipment logistics-freight, EIN designation and customs clearance
3. Collecting all funds from the exporter
4. Managing overseas distributors
5. Overseeing product returns

Why would a local manufacturer hire an EMC?

1. They have no desire to assume the credit risk of an international sales transaction.
2. They have no desire to have inventory risk or hold stock for an international customer.
3. They have no desire to engage in international business risk -they wish to work in the local time zone, language and/or currency.
4. They don’t have the desire or skills to complete export paperwork or logistics.
5. They have no desire to manage an international distributor/dealer network.
6. They want to use the EMC as an initial export channel until they decide to invest more heavily in an international sales infrastructure.  They use the EMC as a bridge until they build their own dealer/distributor network.

There are many types of products and types of transactions that are suitable for an EMC:

1. Standard products with no/minor modifications or customization.
2. Products that are high value add and can afford to have several steps in the distribution channel.
3. High tech standalone goods that do not require complicated installation and/or training.

Export management companies are typically small domestically owned businesses that know US export paperwork requirements, have readymade relationships with international carriers, freight forwarders, banks and trade acceptance groups.  EMC’s also typically have foreign language expertise.  They are a good avenue to start the export journey.

​Contact me if you desire an introduction to a qualified EMC.