What is EMC? Export Management Companies or EMC’s are a vital channel of foreign distribution for small firms just likely to initiate in international trade or for those that lack the resources to assign their own people to foreign markets. Most EMCs are merchant intermediaries, working on a buy-and-sell arrangement with domestic small firms taking title to the goods and then reselling them in foreign markets; others work on com- mission. More than 1,000 EMCs operate across the entire United States, and most of them specialize in specific industries, products, or product lines as well as in the foreign countries they target.
EMC’s offer small ventures with a low-cost, efficient, independent international market- ing and export department, offering services that range from conducting market research and giving advice on patent protection to arranging financing and handling shipping. The greatest benefits that EMCs provide small firms are ready access to global markets and an extensive knowledge base on foreign trade, both of which are vital for entrepreneurs who are inexperienced in conducting global business. In return for their services, EMCs usually earn an additional discount on the goods they buy from their clients or, if they operate on a commission rate, a higher commission than domestic distributors earn on what they sell. EMCs charge commission rates of about 10 percent on consumer goods and 15 percent on industrial products. While, EMCs rarely advertise their services, finding one is not difficult. The Federation of International Trade Associations provides useful information for small firms about global business and trade intermediaries on its Web site (http://fita.org), including a list of EMCs. Industry trade as- sociations and publications and the U.S. Department of Commerce’s Export Assistance Centers* also can help entrepreneurs to locate EMCs and other trade intermediaries.
Furthermore, Export Trading Companies is another great technique to get into international markets with a minimum of cost and effort is through export trading firms. Export trading companies (ETCs) are businesses that buy and sell products in a number of countries, and they typically offer a wide range of services, such as exporting, importing, shipping, storing, distributing, and others, to their clients. Unlike EMCs, which tend to focus on exporting, ETCs usually perform both im- port and export trades across many countries’ borders. Although EMCs usually create exclusive contracts with companies for a particular product line, ETCs often represent several companies selling the same product line. However, like EMCs, ETCs lower the risk of exporting for small businesses. Some of the largest ETCs in the world are based in the United States and Japan. In fact, many businesses that have navigated successfully Japan’s complex system of distribution have done so with the help of ETCs.
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