Export basics and selection of commercial agent
Some believe that the field of export is a complex area that needs a lot of money and procedures, but this belief is completely wrong. The work in the field of export needs more experience than the need for money, especially the export of small and medium-sized goods such as food commodities, vegetables and consumer goods because of its large profit return and ease of trading.
We have shed light on some statistics that show the importance of work in this field, according to the Central Agency for Public Mobilization and Statistics (CAPMAS). In its latest publications on the volume of foreign trade in Egypt for the period from January to July 2017, the total value of Egyptian exports raised up to 14.8 billion dollars , Compared with 12.5 billion during the same period last year, in addition to a report of the Export and Import Control Authority,
Construction materials exports raised up 4% in September to record 384 million dollars compared to 370 million dollars in the same month last year. Chemical exports raised up 31% to record 307 million dollars, 234 million dollars, the same month last year.
Exports of ready-made garments had risen up 2% to 83 million dollars in September 2017 compared to 82 million dollars last year, and yarn and textiles also increased 2% to record 56 million dollars.
While furniture exports jumped 15% to 37 million dollars compared with 32 million dollars in September 2016. Exports of handicraft products jumped 30% to record 15 million dollars compared to 11 million dollars, and agricultural crops achieved total exports of 87 million dollars, the same proportion achieved last year.
Overall, Egypt’s exports in this year raised up 8.4% to $ 6.4 billion.
The export process is based on a number of essentials for the success of the project including; the procedures, documents required, the registration procedures in the exporter register, the steps to be followed during the export process, the export quality control, the certificate of origin and the guarantee letter, the agency contract, Trade, methods and terms of payment. In this regard, however, we will highlight the good choice of the commercial agent.
There are several ways to reach a good trading agent in foreign markets, but the exporter must first identify the commodity he intends to export and all the related information such as demand rates, the nature of consumers, competitors and others.
Types of commercial agency:
There are several types of commercial agency, the most important of which are:
- Commission agent.
- The vending agent is the so-called distributor.
- A joint agent with the buyer.
- There is also a mixture between two or all previous species.
Each type of agency has characteristics in dealing and different functions. The following is a presentation for each type:
This is the role of the agent in receiving orders from the purchasers of the product. He then sends to the exporter the orders he sends to the buyers directly and verifies their receipt of the shipment. Therefore, ownership or possession of the commodity is not transferred to the agent and cannot be handled or traded.
In this type of agency does not require the appearance of the name of the commercial agent on the exported commodity and does not bear any risk ratio either from the source or the buyer, all that is required is to agree on a commission at a predetermined rate in return for his role in the completion of the purchase and is determined on the basis of The nature of the market and the commodity sold.
The commission agent is considered a successful and effective method of promoting the commodity, as its percentage is determined by the amount of sales, where the higher the greater the discharge of the commodity or product.
Here the role of the agent is different where he buys the item for his own account, and then the ownership and possession of the commodity goes to him, then the agent in the rest of the process of storing and repackaging and displaying and selling the item at the price he deems appropriate. It should be noted that this type of agency bears the burden of risk in terms of providing guarantees and facilities for buyers and provides after-sales services such as maintenance and spare parts and others.
Joint Agent with Buyer:
This type of agency includes more risks than the previous types where the agent is responsible for the orders of supply and payment of the products to the exporter if the buyer refrained from paying the value of the commodity and therefore the mutual agent receives a high commission rate. This type of agency is not widespread because of its costs and risks.
The Agency contract may include more than one type at the same time. Therefore, when choosing the commercial agent taking into consideration, it is necessary to have several qualities:
- Good reputation.
- Financial and productive capacity.
- Previous experiences.
- Type and number of agencies.
- Ability to know the conditions in the market.
- Financial institutions that deal with them.
- The geographical area it serves.
- Annual activity volume.
In all cases, the source must be in direct and continuous contact with the agent so that he can follow the volume of success achieved and the reasons that led to his failure in the market.
All of the above are just tools to facilitate your business and increase the chance of success for you in the foreign markets can choose the most suitable for you and your trade, and these tools can be used in a double way, where you can also through your commercial agent to identify more markets that deal with it Or has been dealt with previously and the new and evolving needs of the current market in addition to the main role in the promotion of your commodity.