International Trade and Methods of Payment

Only available on StudyMode
  • Download(s) : 230
  • Published : April 19, 2012
Open Document
Text Preview
International Trade
Export - is important part of international trade. And the two most important reasons for this are likely to be under-used capacity (exporting will allow you to increase production, reduce unit costs and increase profits) and diversity (relying on just your own domestic market is risky because the market may decline; there may be seasonal factors, etc. Selling in other countries allows you to spread the risk and develop opportunities abroad). Before getting started, there is a lot of initial research to be done on the foreign market. The main concerns will include:

• background information (economic situation, political stability, currency risk) • market size and likely product demand
• competitors’ products already in the market
• tariffs or import restrictions (duties, quotas, taxes)
• distribution channels and methods (agents, distributors, wholesalers, retailers) • technical, safety, environmental and other standards required by law • packing and packaging issues ( climate and time in transit, handling methods, need for different packaging to suit local market) • sales literature and support material (translations needed) • servicing arrangements ( if needed)

• customer satisfaction policy (money back/replacement schemes). IT has its Advantages and Disadvantages:
+• Greater variety of goods available for consumption;
• International trade makes it possible for each country to enjoy wider range of commodities than what is otherwise open to it; • International trade promotes competition among different countries; it keeps the prices of their products at reasonable level; • Company will find more customers what is, of course, profitable; • Diversification – and, again, more profit as a result. -• The delay of development because of money shifted to cheap labor markets; • Chances of Trade imbalances;

• Language barrier;
• Increase Dependencies on others;
• Import taxes, exchange controls;
• It’s needed to know local customs...
tracking img