Why would a company choose to work through intermediaries when selling products?

Business & Finance
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Why would a company choose to work through intermediaries when 

selling products in a foreign country?
Nov 7th, 2015

Thank you for the opportunity to help you with your question!

Selling in another country involves many parameters such as  :

Creating a distribution channel for that country from scratch. To country’s with an advanced logistics system that might be an easy task but apart from USA and west Europe that is not case for the rest of the world. Plus it cost money and time (which is money) to do so . Furthermore having expertise on the matter for one region (your domestic market for example) doesn’t mean you ll face the same problems elsewhere.

 Target country’s market size isn’t be enough to worth the trouble or at least to be a priority. Then why lose potential income , just because you don’t want to be directly involved? Plus you are building your brand name by having a presence and when you actually decide to be directly involved you won’t start from zero.

Selling to intermediaries also minimalisms the risk of doing it yourself. Of course it lowers the margin of profits but the fact that you take no risk isn’t at all negligible

Another reason is faster expansion. By not being involved directly into another country the cost for expanding through intermediaries is significally lower and allows you to expand your production faster. Add to that the benefit of scale production costs which will add to your entire profitability factor the benefits are significant. 


Please let me know if you need any clarification. I'm always happy to answer your questions.
Nov 7th, 2015

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