The proprietor or a partner of a firm, director of a private or public limited company or an executive or manager of a small or large company may wish to enter into the overseas market for selling their products. If a manufacturer would like to sell his products overseas, he may act as a manufacturer exporter.
If a person wishes to buy products from other manufacturers and sell them in the overseas market, he then becomes a merchant exporter. If a manufacturer would like to sell products of other manufacturers along with his own products, he may act as a manufacturer and merchant exporter at the same time.
The exporter can choose from any one of the following modes of operations.
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(i) Merchant exporter i.e. buying the goods from the market or from a manufacturer and then selling them to foreign buyers.
(ii) Manufacturer exporter i.e. manufacturing the goods needed for export.
(iii) Sales agent/commission agent/indenting agent i.e. acting on behalf of the seller and charging commission.
(iv) Buying agent i.e. acting on behalf of the buyer and charging commission.
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The first and the foremost question that a prospective exporter has to decide, is about the kind of business organisation needed for the purpose. A crucial decision has to be taken, as to whether the business will be run as a sole proprietary concern or a partnership firm or a company.
The proper selection of organisation depends upon (i) the exporters’ ability to raise finance, (ii) his capacity to bear the risk, (iii) his desire to exercise control over the business (iv) the nature of regulatory framework applicable to the exporter.