Types of Exports
There is considerable scope for selecting the type of product or service to be exported. The method used to export will vary according to the product or service, the market and individual preferences.
You should be prepared to explore a range of options and seek advice on the approach that best suits your business and your market.
Off-shore Versus On-shore Sales
- In an off-shore arrangement, you deal directly with an importer in the target market. You may establish a contract with a buyer and negotiate a contract for the sale of your product or service. Alternately an agent may obtain, promote and sell your product in the market on a commission or retainer basis. In this arrangement you may retain ownership of your product.
- In an on-shore arrangement you make the deal in Australia, for example by utilising the services of an export merchant or through an Australian branch of a foreign company. Export merchants are experienced in international trade and buy from you with the intention of selling your products/service overseas. Payment would be made in Australia, in Australian currency.
In-country Business Ownership
- In the case of a joint venture arrangement an Australian business in association with a local business may establish a third business entity to produce and or distribute in the target market.
- Alternately the Australian business may set up a branch or subsidiary in the target market.
The Transfer of Intellectual Capital
It is not always necessary for a product to be shipped overseas. The export potential may lie in the intellectual property associated with the development of a good or service.
- The transfer of the intellectual property associated with a product to an established manufacturer allows for the product to be manufactured under licence in that country. Distribution arrangements would then need to be put in place.
- Through a licensing arrangement a business may license an overseas business to use its intellectual property.
- Similarly, through a franchising arrangement a business may grant an overseas business a licence to operate its business within defined parameters.
- In a project management arrangement the Australian business may provide a comprehensive management service to a foreign client.
Tendering for Overseas Business
In some instances export opportunities are easily identified and well documented. By tendering for an overseas contract you enter a bid for a defined project. The contract may be one-off, recurring or lead to other export opportunities, perhaps not identified in the initial phase.
The nature of the tender delivery will vary from project to project and
will invariably require sub-contractors, and the sourcing of additional
equipment, services and consumables.
