Exporter

Commerce

An exporter is that businessman or company that is dedicated to selling its products and / or services to clients abroad.

In other words, an exporter is that business or person that sends its merchandise abroad. This, in exchange for a consideration.

It should be noted that with exporter we can refer to a nation. For example, Saudi Arabia is an oil exporting country.

Characteristics of the exporter's activity

The characteristics of the exporter's activity are as follows:

  • Your clients are outside the borders of your country.
  • It can be the same manufacturer of the merchandise or an intermediary (between a local producer and his client abroad).
  • You must get involved with everything that includes international transactions. For example, everything related to regulations and terms such as incoterms. These are used to determine at what time of the purchase the risk on the merchandise is transferred from the seller to the buyer.
  • Not all of your clients must be foreigners. It may be that part of your merchandise is placed in the local market.
  • You should bear in mind that the type of negotiation may depend on the client's culture, which may be very different from your own. For example, Americans tend to be very direct and appreciate saving time. In contrast, the Chinese and Japanese normally take much longer to trust their counterpart.

Exporter's business risks

The exporter is subject to different risks such as the following:

  • Exchange risk: The exporter sets the price of its merchandise in a foreign currency, which could lose value in relation to its local currency.
  • Logistics administration: The exporter must have adequate control of the merchandise to ensure that it reaches its destination in optimal conditions, at least to the extent that it is responsible. For example, if the condition of the sale is FOB (Free on Board, Free on Board), the seller is responsible for the merchandise until it is loaded on the ship.

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