Answer
In the import-export industry, consumers and businesses can use a variety of methods to export or import goods. Below are common types of import-export activities that can help businesses determine how to bring products into this field or further develop their operations.
In the market, traders may conduct transactions using their own methods and techniques. However, businesses generally use several major forms of import and export as follows:
Direct import and export
This is a form in which businesses directly export or import their products and services to or from foreign companies through their own organizations. The two parties work directly with each other without an intermediary, allowing the business to take greater control over the sale and distribution of its products.
This form of
import and export is relatively straightforward. Both exporters and importers need to carefully research their partners and target markets. The parties must sign agreements and properly fulfill the terms stated in their contracts.
Entrusted import and export
In this form, an intermediary is entrusted by the exporting or importing entity to act on behalf of the producer in signing contracts with foreign partners. In return for carrying out the required procedures, the intermediary receives a service fee, commonly referred to as an entrustment fee.
A characteristic of this arrangement is that the entrusted company does not need to provide the capital or apply for quotas. The value of goods covered by the entrustment contract is counted toward export turnover rather than the entrusted company’s revenue.
Re-export
Re-export refers to importing goods and subsequently exporting them again to another foreign market. In other words, a business uses re-export activities with the objective of earning more foreign currency than the amount originally spent. This type of transaction generally involves three countries or markets: the exporting country, the importing country, and the destination to which the goods are re-exported.
Goods involved in re-export are generally not processed or used during the re-export process. Businesses participating in re-export therefore do not incur production costs or need to invest in production machinery and technology. However, this form requires strong sensitivity to product markets and foreign-exchange movements.
There are also many other forms of import and export. Each business can select the form that best matches its own direction and operating strategy.