Importing, Exporting, and International Trade

The Nature of International Trade

• Research
• Generate a list of internationally available items
• List suppliers of an item from list
• Make a chart to fill in information about suppliers

Supplier

Location

Item

Availability

Price

Complications/ Regulations

International Trade Relationships

• Understanding Trade Relationships
• Why Companies Export
• Opens them up to new markets
• Why Companies Import
• When the company has an unmet need or finds and opportunity in a product from another country
• Why Countries Import
• To fill needs
• Why Countries Export
• Economic growth and Political ties.

International Trade Relationships

• Direct Exporting
• A company that exports its own products
• Benefits:
• Control over negotiations, prices, distribution, and marketing programs
• Can choose how and where products will be sold
• Costs:
• Primary cost is shipping
• Often raises a products price

International Trade Relationships

• Indirect Exporting
• Requires less work than direct, hires another company in the importing country to handle items
• 4 Types of Independent Exporters
• Manufacturers Export Agent
• Export Commission Agent
• Export Merchants
• International Firms
• Benefits
• Volume and Simplicity
• Disadvantages
• Company has less control over the export process

International Trade Relationships

• Exporting and Risk
• Time Risk
• How long it takes to get your money back on an investment (The longer the riskier)
• Economic Risk
• Possibility of downturns in economic conditions can affect businesses locally, nationally, or globally
• Product Risk
• Some products are more risky than others
• Country Risk
• Investment could be lost due to political changes in a country
• Importing and Risk
• Dependency (biggest risk) – Relying too much on one trading partner