Imports and exports define international trade. They account for all the goods and services that travel between countries. In order to facilitate them, a long list of players must be involved. The three most important players are directly related to the manufacture and consumption of goods.
A company involved in global trade may utilize the services of a customs broker. They may work with a company like Vigilant Global Trade Services to maintain trade compliance and optimize global trade efficiency. But at the end of the day, the top three players in the import/export business are the same three who make imports and exports necessary:
1. Import/Export Merchant
The first player is the import/export merchant. A merchant can take many forms. A manufacturer that makes goods and sells them overseas is an export merchant. The company doesn’t work through any intermediaries for sales, distribution, etc. It may work with Vigilant GTS to maintain trade compliance, but it handles all its own business affairs in terms of finding customers and selling to them.
Likewise, you could have a company looking to buy goods from overseas. That company can also work as a free agent of sorts, not relying on intermediaries or distributors. The company handles all the purchasing and acquisition on its own.
Both types of import and export merchants can also be distributors. The export merchant can buy products from domestic manufacturers and then sell them overseas. Likewise, the import agent can purchase goods and then sell them to domestic customers.
2. Export Management Company
Next up are export management companies (EMCs) who handle things on the export side of the equation. An EMC provides services directly to a limited number of clients looking to sell their products overseas. It does everything from generating invoices to hiring agents and facilitating overseas marketing.
In some cases, EMCs end up buying products from their clients and then selling them overseas. They become distributors in addition to EMC service providers. Doing so can complicate exports, but it is still a good way for an EMC to increase its revenues.
3. Export Trading Companies
And export trading company (ETC) is the exact opposite of an EMC. Rather than working on behalf of manufacturers to find customers for their goods, ETCs work on behalf of importers looking to buy goods and services from other countries. If it helps, think of an ETCs as buyer’s agent whereas EMCs are seller’s agent.
ETCs can act solely as brokers connecting buyers with the appropriate sellers. They can also act as direct importing agents, or importers of record (IORs), taking title of imported goods prior to duties being paid and shipments being cleared for distribution.
Independent import/export agents make money by way of traditional buying and selling. As for EMCs and ECTs, they can be paid a flat rate, an hourly rate, or via commission. It is really up to the involved parties to work out compensation.
4. Tying It All Together
With all that said, do you recognize what all three players have in common? It is not import and export paperwork. It is not trade compliance. It is not even duties and taxes. Their common component is the buying and selling of goods. Without buying and selling, there would be no global trade. There would be no need for global trade services offered by companies like Vigilant GTS.
When you get right down to it, the import/export business is driven by people buying and selling things. Manufacturers make things and customers buy them. The three players discussed in this post simply facilitate transactions between the two.