Q.1 What is an Export Management Company?

An export management company is an independent entity which acts as the exclusive export sales department for a manufacturer. Their representation may apply to entire line of products or a select set. Their representation may include an entire region, like Asia, or may apply to a single country. Their representation is of the U.S. manufacturer and they work hard to develop a successful export business for the company they represent.

In most cases, an Export Management Company will act as a distributor on a “buy-sell” basis. The Export Management Company buys from the manufacturer at a set price and resells the goods or service to the foreign customer at their established price. The Export Management Company is responsible for all invoicing and bears the risk of non-payment. The Export Management Company pays the manufacturer on agreed terms, usually in line with the terms offered to their best U.S. customers.

Q.2 Who should use an Export Management Company?

All manufacturers who have limited or no export experience should consider using an Export Management Company. Even companies with export experience may benefit from dealing with an Export Management Company. Working with an export management company helps to identify new opportunities in select foreign markets where distribution may be lacking. In the U.S. more than 5000 small to mid size manufacturers have outsourced their export sales to be handled by an Export Management Company. As less than 15% of all U.S. businesses have any international sales, questions to ask yourself include:

1. Does your company have the time and specialized knowledge to enter export markets?

2. Does your firm have personnel dedicated to develop an export business?

3. Does your firm have access to foreign languages, market specific information, and other cultural considerations to succeed abroad?

Q.3 What are the benefits of working with an Export Management Company?

Export Management Companies benefit the manufacturers they represent through their established sales network abroad. Dealing with an Export Management Company allows access to their existing network and resources to appoint distributors and dealers in select markets. Export Management Companies have the ability to handle all of the details of an export transaction. This includes the know-how to handle inquiries, prepare quotations, enter orders, handle shipping details, assist with country specific obstacles and handle the international banking and payment details.

An Export Management Company’s greatest asset is in its strength of connection to the international firms they work with. They have the experience to select agents and distributors. They also manage their foreign distribution network through visits to the markets they distribute into. Traveling abroad for the first hand experience allows them to assess market conditions and sales opportunities. An Export Management Company’s profits are based on how successful they are at exporting. Therefore, they are motivated to do a good job.

Should you choose to work with an Export Management Company, the advantages you will notice are:

1. Quicker export sales – Export Management Companies have an established network of foreign agents and distributors. If your product is ready for a particular market, you will have a built in distribution system.

2. Fewer expenses – Your company’s out of pocket expenses will be less as most of the labor expenses will only be realized upon a successful appointment of a distributor and when their orders are placed.

3. Time - An Export Management Company’s dedication is to international sales. Relationships and customer service is a very important part of export sales. An Export Management Company has the time and incentive to develop export business. Even with the appropriate financial resources, you may lack the time to focus on this because of other priorities. Often this time is more appropriately spent on building the domestic market and export details are overlooked.

4. Learn from those with experience - A great way to learn about export transactions is by working with an Export Management Company. Use the opportunity to work together to learn how things are handled.

Q.4 What does an Export Management Company require from its principal?

In terms of sales abilities, Export Management Companies are usually as strong as the principal allows them to be. The relationship between the principal and Export Management Company is vital in developing the proper business. To be successful, the Export Management Company benefits from the following aspects with its principal.

1. Knowledge of the product.

2. Domestic market and distribution information.

3. Access to marketing and promotional materials, sales statistics, etc.

4. Competitive pricing structure.

5. Territory protection.

6. Open communication between both parties.

Q.5 What does an Export Management Company charge?

Export Management Company’s charges to the manufacturer vary depending on the product and degree of promotion required. An Export Management Company functioning on a “buy-sell” basis will ask for your best export price plus an extra discount or commission. This is typically 15% for consumer goods. It is preferred that this commission be handled separately and does not increase the cost of the export pricing.

In addition to commissions or discounts, an Export Management Company may ask for “special event” contribution sharing such as splitting the cost of a tradeshow booth in a foreign country, etc.

Q.6 How do you get paid for your export sales?

In almost all cases, payment will be made domestically through the Export Management Company. As a domestic entity, Export Management Companies should receive your most favorable domestic terms. They assume the risk of non-payment with the foreign companies. KJ’S Global Connections Inc will handle the international banking and any details with letters of credit, terms, and credit limits with the foreign parties.

Q.7 How should you ship your product overseas?

Several factors such as size, weight, shelf life, urgency, manufacturer location and ship point, should be considered. Export Management Companies work with several freight forwarders who offer competitive rates and customer service to ensure the most efficient manner to get your product to its destination. In many cases, the foreign company will select the method of shipment and which freight forwarder to use. The Export Management Company works with the freight forwarder to provide the export documentation for proper arrangement of shipment.

Q.8 What product categories does KJ’S Global Connections Inc. focuses on?

KJ’S Global Connections Inc focuses on the representation and distribution of all building and construction materials, as well as household and commercial appliances.

Q.9 What countries does KJ’S Global Connections Inc. export into?

KJ’S Global Connections Inc is currently managing exports into the Caribbean Islands, South Africa and select other markets.

Q.10 Will our product or service need to be adapted to fit into international markets?

Each country has different regulations for import. Product details such as electrical, prohibited ingredients or materials, any agricultural concerns should be considered when preparing for export sales. Working with an export management company will assist and research what potential adaptations, if any, need to be considered.

Q.11 Will we need to translate our sales literature into the local language or need to speak a foreign language?

In the initial stages of distribution, over-stickering or the insertion of instructions in a localized language will cover most of the needs. This is done by either the manufacturer or by the importer, depending on the application. If quantities can justify new localized language on the packaging, artwork arrangements and translation will be arranged.