Advantages of Indirect Exporting


Advantages of Indirect Exporting:

The following are the advantages of indirect exporting:

(a) Less Risk: Indirect exporters are prone to comparatively less risks as the risk of marketing gets transferred to export market intermediaries. At the same time, these intermediaries are specialised in their own field.

(b) Less Investment: Since indirect exporters concentrate only on manufacturing or assembling of goods, they require a lesser amount of capital than the direct exporters.

(c) Specialization: Since indirect exporters concentrate only on manufacturing aspect, they can exercise their task with a greater degree of specialisation, leaving the responsibility of marketing to export marketing intermediaries.

(d) Availability of Imported Inputs: Indirect exporters can import raw materials, components, spare parts, etc., for export production through intermediaries such as export houses, trading houses, etc.

(e) Technical Guidance: The intermediaries, which undertake export of goods, provide technical guidance to local suppliers for promoting exports from the Country. Generally such guidance is provided free of cost or at negligible fees.

(f) Suitable for Small Firms: it is not feasible for small firms like SSIs and cottage industries to export directly due to diseconomies of scale. Export marketing intermediaries assist them by providing them with marketing infrastructure.



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