Distinguish between Direct & Indirect Exporting

Direct Exporting

Indirect Exporting

Export marketing is undertaken directly by the manufacturer.

The manufacturer exporter exports the goods through intermediaries.

The manufacturer exporter can get first hand information on the importer’s requirement.

The manufacturer exporter may not get first hand information as he has to depend on intermediaries.

The exporter can exercise direct control over packaging, pricing, promotion, after sale service, etc.

The manufacturer may not be able to exercise direct control over packaging, pricing, promotion, etc.

The direct exporter can earn goodwill in international markets.

The manufacturer may not earn reputation in overseas markets. The intermediaries gets the reputation.

There are more risks as the exporter has to assume production and marketing risks.

The risks involved are less as the manufacturer has to bear only the manufacturing risks.

It requires more investment for manufacturing as well as for distribution network.

The manufacturer requires less investment as he has to look after only the manufacturing aspects.

The direct exporter can claim a number of incentives such as income tax benefits, duty drawback. special licences etc.

The manufacturer may not be able to claim various incentives unless the export documents are in his name.

The manufacturer/exporter has to bear production and distribution overheads.

The manufacturer has .to bear only production overheads.

It requires concentration on both marketing and production aspects and as such lacks specialisation.

In indirect marketing, the manufacturer can specialise in manufacturing aspects.

It is more suitable and feasible for large-scale exporters.

It is more suitable and feasible for small scale exporters.

Exports can fetch high prices if sold directly by manufacturer.

Exports may fetch lower prices due to intermediaries margin.