The Opportunities & Challenges Of An Export Management Company
Trade between distant lands has happened since time immemorial. There are tales of trade happening across the oceans, cutting through the mountains, crossing big deserts, etc. History has countless references to this form of association between different cultures. In modern times such trade has been framed into two terms – import and export. When something is brought from a foreign land it is called import and when sold to a foreign nation it is known as export.
For any nation or organization to prosper it needs to have a good export market for it’s raw materials and finished products. This creates the need for import and export management companies. A good export management company can facilitate a company’s products and relationships outside the host country. In the last few decades the global trade volume has increased exponentially and working with an export management company has become a very lucrative business decision. But it comes with its share of challenges also and managing an export management company is easier said than done.
Let us take a look at the opportunities and the challenges of an export management company:
- International trade has increased many folds in the recent decade and people have the need for a quality export management company. The margin in this business is huge as products exported are usually in huge demand in the foreign markets.
- Small producers and manufacturers do not have their own export licenses and need an export management company to sell their product in the international market.
- Big manufacturers also outsource their export business to an export management company further creating business for this sector.
- Many export management companies also act as the retailer of the products in the foreign markets, which creates tremendous opportunities for them in the foreign market.
- Export brings in a lot of foreign exchange to any nation and the governments usually promote this sector. This is especially true for the companies operating out of the developing countries.
- Any export management company, which can read the trends in the international market, can earn huge profits by positioning itself in the right places at the right time.
Some of the challenges being faced by export management companies are:
- There is high entry barrier in export management in some countries and this entry barrier prevents many export management companies in venturing out in certain countries.
- Getting an export license isn’t very easy in many countries even if the demand for a certain product is high in that international market.
- Governmental regulations in certain countries prevent the sale of certain products even though they might be in huge demand in that international market.
- International trade is often a by-product of foreign relations. In case there is tension between two countries the trade volume drops hitting any export management company hard.
The opportunities clearly out number the challenges when it comes to running an export management company and in the future the opportunities are expected to grow more and more as countries are opening up their economies. A good export management company always needs to have a foot in the future to grab a large share of the pie.
Exporting is a very lucrative sector in any country and has created the need for the best export management companies. These companies however have their own share of challenges and opportunities when it comes to facilitating trade between two countries.