Every
week I receive quite a few enquiries from enterprising
exporters
- How do you get so many overseas
trade inquiries for Indian products ?
- Please tell us how can we find
genuine importers for our products ?
People, very eager and enthusiastic
to know whereabouts of buyers - genuine importers
who are serious and most likely to buy their products.
While it is true that number of business
transactions through Internet is rising rapidly
- it is equally true that there is no short-cut
to established business processes. Internet makes
our life that much simpler by providing a cheap,
reliable and convenient mode of communication.
However, beyond that it is still that much of
hard work in product sourcing, quality control,
marketing, business correspondence, negotiation
etc. etc.
The point I am trying to make is
that - selling your product in international market
is a long drawn, systematic process. It is not
as simple as getting a list of buyers through
Voodoo magic or as difficult as Rocket Science
- but accomplishment of simple, well-defined,
systematic jobs that will result in a gradual
increase in your overseas business over a period
of time. Hard work and perseverance are the requirements
of the day - no quick fix solutions !
Now, to answer our original question
'How to find buyers' - we need to first understand
who are your 'buyers' and exactly what do they
want from you. Understanding their profile will
not only help you in finding the likely places
where they can be traced but also to offer right
mix of product and price as also clues on how
to negotiate successfully.
There are mainly following 6 categories
of organizations/ people who are likely to buy
your product directly or indirectly:
Manufacturer/End-User
Pharmaceutical formulation manufacturer
looking to source bulk drugs, garment manufacturer
sourcing fabrics etc. fall in this category. The
buyer is generally well aware of import procedures,
pricing etc. Volumes are usually large and negotiation
takes time to materialize. Since the material
will be used in-house, buyer may provide own specifications.
It is not uncommon, when buyer may decide to enter
into collaboration with supplier with buy-back
agreement. Buyer seller relation is comparatively
on solid footing (i.e. buyer does not look for
alternate supplier if seller does not commit major
bungling or goof-up).
We know quite a few overseas manufacturers
who have developed lasting relationship with Indian
suppliers through initial contacts at infobanc.com
site.
Wholesaler/Trader
Usually a hardened international
buyer who knows the ins and outs of product he/she
is buying. The buyer generally has well-developed
distribution line in his country to dispose off
imported products quickly. Generally sensitive
to price, looks for alternative often. Volumes
are almost always large - container size at least.
May ask for credit after a few transactions.
At infobanc.com, we constantly track
this type of buyers who do not mind testing new
suppliers if price and quality is acceptable.
It is not difficult to track them if you know
the usual market places where these people go
for new supplier.
Retail
Chains/Supermarkets, Large Brands
These are organized buyers who have
well developed sourcing offices and trained manpower
in exporters' countries. Very particular about
quality, delivery etc. Takes quite some time in
negotiation and order placing. Considered very
valuable clients by exporting community in general.
Small
Retailer
Before the advent of Internet, small
retailers were happy to buy from wholesalers in
their own country as importing in small quantity
did not make economic sense. There were well-defined
distribution channels where retailers used to
make reasonable profit by buying from wholesalers.
By its very nature, Internet has
reduced the levels of distribution in significant
amount by removing intermediaries. Thanks to cheap
and convenient communication medium like Internet
and e-mail, small retailers, specially in North
America, are now coming directly in contact with
sellers in developing countries and buying products
in small quantity. The risks are higher than buying
from local wholesaler, but profit margin is far
too high. And, there is no dearth of small exporters
who do not mind supplying in small quantity to
retailers directly at higher than market price.
These are usually small purchase but at regular
intervals. The margins are also higher.
infobanc.com has probably the largest
number of small retailer/importer in its database
of buyers.
Broker/Mandate
Typically, these are representatives
of large commodity buyers who are constantly looking
for new sources and lower prices. They represent
buyers who have the money to buy from one continent
and sell at another. North America (Canada and
the USA) have plenty of them. The buyers usually
bid for international tenders or secure orders
through their own means and source the products
from international marketplace at a price that
can give them healthy profits. Brokers are usually
nearer to actual buyers while a mandate usually
represents a broker.
One needs to be aware of the status
of the broker or mandate - mandates have limited
power and prove ineffective in many cases.
We are in regular contact with a
large number of such broker/mandates who use infobanc.com
site to source products
Agent/Distributor
Agent/distributors are not really
buyers - they represent you in a foreign country
where you are not able to sell directly. Because
of their intimate knowledge of local market, Agent/Distributor
is considered a formidable part of any export
campaign.
Agents know the buyers and represent
you as your sales representative. They usually
book orders from local market and collect commission
from sellers. While Agents work on case to case
basis, Distributor stocks your products in anticipation
of sales and usually carries higher risk (and
consequently margin) than agents.
Recognizing the importance of agent/distributor
in export campaign, infobanc.com started a separate
section for them and started vigorous campaign
to identify and invite commercial agents towards
Indian products couple of years back. Today, large
number of Agents from Europe, Latin America and
other counties visit infobanc.com site regularly
and post inquiries.
There are other categories of buyers,
however we have considered only those considered
significant in the context of Small and Medium
Sized Enterprises (SME).
Having identified the main categories,
we shall discuss how to reach individual entities
in each category in subsequent articles.
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