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Domestic Merchant

Export Merchant: The domestic based export merchant buys the manufacturer’s product and sells it abrade on his own. When this type of middleman is sued in an international marketing channel the marketing job of the manufacturer is reduced to essentially domestic marketing, and except for certain modifications in the product mix which are sometimes required to suit the international market, all aspects of the international marketing tasks are handled by the export merchants.

Export Houses: In India, there are a number of export houses that export products produced by many manufacturers. Some companies have established their own export marketing subsidiaries. They take responsibility for the promotion of goods, marketing research, credit, physical handling of the products. They have foods contacts with the overseas buyers and may also have an established network of sales offices.

Trading Companies: Unlike an export house, which concentrates on exports, a trading company is active both in exports and imports. Japanese trading companies have been very successful in promoting Japan’s exports. Like export houses, the trading companies, offer a brad range of services from marketing research to financing and present a relatively inexpensive way for the small or medium size firms to do international business. The advantages of using trading companies are enumerated below:

i.    They can avail themselves of the various economies of scale in transportation, warehousing, and other areas related to physical distribution.

ii.    They can avail themselves of export finance available at confessional rates.

iii.    They are in a position to employ qualified and specialized staff to look after the complicated work relating to customs, legal problems, procedure and documentation.

iv.    They can bargain with large trading companies in foreign countries on an equal footing.

v.    They can achieve  economies in export promotion by using the most effective advertising and publicity media as also by participating in many trade fairs and exhibitions.

vi.    They are able to absorb many of the risks inherent in international trade because of the wide range of products handled by them.

Small industrial units can derive significant advantages by availing themselves of the services of trading houses and export houses.

i.    Information on market opportunities abroad.

ii.    Ability to provide finance through trade credits, investments, direct loans and loan guarantees.

iii.    Ability to absorb many of the risks inherent in trade because of the wide range of products they handle.

iv.    Sales opportunities in otherwise out-of-the-way markets.

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