The company intends to expand its overseas business, with products covering traditional manufacturing and emerging electronic products, and is asking which type of export agent is easier to work with. The best answer suggests choosing a general trade export agent, as its model is mature, policies and regulations are well-established, related supporting services are mature, and there are clear standards for foreign exchange settlement and tax refund processes, allowing for the use of professional agencies. Cross-border e-commerce export agent platforms, however, have complex rules and are less suitable for initial expansion.
Why do exporters engage agents for export business?
Resolved
I am an exporter who has been in the foreign trade industry for a short time and am recently considering whether to conduct export business through an agent. I would like to ask, what are the general reasons why exporters choose to do export business through agents? I hope to get a comprehensive answer so that I can make an appropriate decision.
Trade Expert Insights Answers
There are several reasons why exporters choose to engage agents for export business. Firstly, agents typically possess professional foreign trade knowledge and experience and are familiar with export procedures, efficiently handling all stages from customs declaration and inspection to freight arrangement, thereby reducing errors and risks caused by the exporter's unfamiliarity with the process. Secondly, agents often have extensive resources and good channels, such as long-term cooperative relationships with freight forwarders and shipping companies, enabling them to secure more favorable prices and reduce export costs. Furthermore, in terms of finance, some agents can provide financial support, such as pre-paying for goods, to alleviate the exporter's financial pressure. Additionally, agents can assist exporters in managing trade risks, such as dealing with complex changes in trade policies and regulations, and resolving trade disputes.
In summary, by leveraging agents, exporters can better focus on product manufacturing and market expansion.
It is common for new exporters to lack customer resources. Agents have a rich customer network, which can help exporters quickly open up international markets and increase order volumes. Moreover, agents may be more skilled in international trade negotiations, able to secure more favorable transaction terms.
Some exporters are small in scale, and building a complete foreign trade team is too costly. By using an agent, professional services can be accessed at a relatively low cost, eliminating the need to spend significant effort and capital on recruiting and training foreign trade personnel.
Agents can provide one-stop services, including document processing, logistics, and distribution, saving exporters time and worry, and eliminating the need for them to coordinate across various stages, thereby improving the overall efficiency of export operations.
Exporters may be unfamiliar with the markets of certain countries or regions. Agents are familiar with local market conditions and can provide advice on market research, product positioning, and other aspects, making products better suited to the needs of the target market.
Some exporters have unstable business volumes; they get overwhelmed during peak seasons and cannot afford too many foreign trade personnel during off-seasons. Relying on agents allows for flexible adaptation to changes in business volume, leveraging the agent's strength during peak seasons and reducing dependence during off-seasons.
Agents can assist exporters in risk assessment, provide early warnings for potential exchange rate risks, credit risks, etc., and offer coping strategies to protect the exporter's interests.
When handling various export documents, agents are more professional, ensuring the accuracy of documents and avoiding negative consequences such as cargo detention at the port due to document issues.
If an exporter wishes to quickly enter a specific market, agents, with their local connections and resources, can help the exporter shorten the market entry cycle and seize market opportunities.