The pros and cons of using EMCs/ETCs
The pros and cons of using EMCs/ETCs
There are, of course, both advantages and disadvantages in using an EMC or an ETC. Credit should be given to the research done by several large accounting firms who have taken great interest in export in general and EMCs/ETCs in particular. An excellent case in point is the article by Catharine H. Findiesen of Coopers & Lybrand in Washington, DC,* which addresses most of these considerations. Advantages an EMC/ETC offers the exporter:
• Faster entry into the overseas market in terms of first recorded sales
• Better focus on exporting because most firms give priority to their domestic problems
• Lower out-of-pocket expenses
• An opportunity to study the methods and potential of exporting
• Expertise in dealing with the special details involved in exporting, as well as its strategies
Potential disadvantages to an exporter might be:
• Loss of control of the export strategies and quality control of after-sales service
• Competition from the EMC's/ETC's other products
• Reluctance on the part of some foreign buyers to deal with a third-party intermediary
• Some added costs, and/or higher selling prices because of gross profit margin requirements of the EMC/ETC, unless economies of scale can be used to offset this factor• The possibility of the EMC/ETC neglecting the client's product in favor of other products that might be more profitable or easier to sell
The challenge of negotiating a sound working relationship with an EMC/ETC is discussed in Exporters-sources.com - index page - 9 "Establishing Channels of Distribution."
Relative
gross profit margin coopers lybrand export strategies etcs service competition accounting firms margin requirements channels of distribution pocket expenses economies of scale case in point emc pros and cons reluctance quality control index page third party washington dc priority relationship
There are, of course, both advantages and disadvantages in using an EMC or an ETC. Credit should be given to the research done by several large accounting firms who have taken great interest in export in general and EMCs/ETCs in particular. An excellent case in point is the article by Catharine H. Findiesen of Coopers & Lybrand in Washington, DC,* which addresses most of these considerations. Advantages an EMC/ETC offers the exporter:
• Faster entry into the overseas market in terms of first recorded sales
• Better focus on exporting because most firms give priority to their domestic problems
• Lower out-of-pocket expenses
• An opportunity to study the methods and potential of exporting
• Expertise in dealing with the special details involved in exporting, as well as its strategies
Potential disadvantages to an exporter might be:
• Loss of control of the export strategies and quality control of after-sales service
• Competition from the EMC's/ETC's other products
• Reluctance on the part of some foreign buyers to deal with a third-party intermediary
• Some added costs, and/or higher selling prices because of gross profit margin requirements of the EMC/ETC, unless economies of scale can be used to offset this factor• The possibility of the EMC/ETC neglecting the client's product in favor of other products that might be more profitable or easier to sell
The challenge of negotiating a sound working relationship with an EMC/ETC is discussed in Exporters-sources.com - index page - 9 "Establishing Channels of Distribution."
Relative
gross profit margin coopers lybrand export strategies etcs service competition accounting firms margin requirements channels of distribution pocket expenses economies of scale case in point emc pros and cons reluctance quality control index page third party washington dc priority relationship
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