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An International Marketing Guide 
for the Minority-Owned Firm I 




OBULDA 



UYD 




An 



Marketing Guide 



for the Minority-Owned Firm 



Prepared by 

Rockville Consulting Group, Inc. 
McLean. Virginia 22101 
(Nelson T. Joyner, Jr. and 
Richard G. Lurie) 



NOTE 

References are made in this document to the United States 
Department of Commerce's Domestic and International 
Business Administration which has recently been renamed the 
Industry and Trade Administration. 



TABLE OF CONTENTS 

Page 

About the Authors ii 

Preface iii 

INTRODUCTION How Exports Can Pay Off 1 

Four Ways Exports Can Boost Profits 1 

PART ONE EXPORTING IN YOUR OWN BACKYARD 3 

CHAPTER I The Hidden Export Market: Selling in Your Own Back- 
yard 5 

CHAPTER II Large Corporations Purchase Billions of Dollars Worth 

of U.S. -Made Goods for Use by Their Foreign Affiliates . 9 

Sources To Identify Firms With International Affiliates 10 

Tips on Selling Large Corporations 10 

Telephone Calls to Purchasing Departments? 11 

Tips on Writing to Large Corporations 11 

CHAPTER III "Piggybacking" When Another Manufacturer Ex- 
ports Your Product for You 12 

CHAPTER IV Selling to Large Firms Who Design and Build Foreign 

Facilities 16 

Typical Foreign Projects Awarded to U.S. Designer/Builder Firms . . 17 

The Top Designer/Builders: How To Find Them 18 

CHAPTER V Selling to the U.S. Military (and Their Dependents) Sta- 
tioned Abroad 23 

The Military Resale Market Abroad A Large Market for Con- 
sumer Goods 23 

PX's Abroad Do a Big Business in Consumer Goods 24 

Headquarters for the PX and the Commissary System 24 

DOD Offices Which Will Help Minority-Owned Businesses Do Busi- 
ness With the Military 25 

Sources for Information About the Military Resale Market 27 

These Firms Specialize in Selling to PX's and Commissaries 28 

CHAPTER VI A Billion-Dollar Market Selling to the U.S. Buying 

Offices of Foreign Trading Companies 31 

These Companies Buy Over a Billion Dollars of U.S. Goods 32 

CHAPTER VII Selling to the Export Merchant or Jobber 34 



Page 

CHAPTER IX Selling to the United Nations: Specialized Opportunities . 44 

How to Register With United Nations (U.N.) Purchasing Offices .... 46 

CHAPTER X Selling to Foreign Department Stores In the United 

States 47 

Six Foreign Department Stores With Their Own U.S. Buying Offices . . 47 

U.S. Consumer Goods The Top Sellers in Foreign Markets 48 

Buying Offices in the United States Serving Foreign Department 

Stores 49 

The Top Sellers: Consumer Goods Which Do Best in Foreign De- 
partment Stores 50 

CHAPTER XI Selling the Foreign Buyer When He Visits the United 

States 51 

Go Meet Them: Foreign Buyers Attend These Shows 52 

CHAPTER XII Selling to U.S. Buying Offices of Large Foreign Firms . . 54 

CHAPTER XIII The U.S.-for-Export Market Revisited 56 

These Sources Can Suggest Best Buyer Guides 57 



PART TWO DEVELOPING YOUR OWN EXPORT EXPERTISE ... 59 

SECTION A Handling Inquiries, Quotations, Shipping, and Payments . . 61 

CHAPTER IWhat To Do When You Get Inquiries From Abroad 62 

What if Letters Are in a Foreign Language? 64 

CHAPTER II How To Handle the "Easy-To-Sell" Inquiry 66 

The Foreign Business Letterhead 66 

Sources of Information About Foreign Firms 68 

CHAPTER III Shipping Your Product Overseas 71 

Ten Possible Costs in an Export Shipment 71 

Documents! Documents! 75 

The U.S. Government Keeps a Watchful Eye Over Exports 77 

What Goes on an Export Carton 79 

How an Export Shipment Moves 81 

CHAPTER IV How To Sell on Letter of Credit 83 

CHAPTER V Following an Export Transaction 86 

CHAPTER VI Stimulating Even More Inquiries From Foreign Firms . . 97 

It's Easy To Get Leads From Foreign Firms 98 

SIC: The Government's View of the U.S. Economy 99 



SECTION B Identifying Sales Prospects in Foreign Markets and Get- 
ting Someone To Sell for You 103 

CHAPTER VII Identifying Your Best Foreign Market Prospects 105 

Tnn T7rriairm X/fo-rUotc fr\r TT C finnrt^ 



Page 

CHAPTER VIII Market Penetration: What You Will Need 114 

20 Ways Commerce Department District Office Specialists Can Help 

You Solve Your Export Problems 115 

CHAPTER IX Foreign Agents: Picking the Right One 117 

Tips for Telephone Calls to Foreign Firms 119 

CHAPTER X Financing Your Export Orders 126 

175 Banks That Can Insure Against Customer Nonpayment 130 



SECTION C DEVELOP AN EXPORT MOMENTUM 135 

CHAPTER XI Putting Your Best Foot Forward: In Low-Cost Promo- 
tions 137 

U.S. Trade Centers Abroad 137 

CHAPTER XII Up, Up and Away! 140 

Alert the Foreign Service Post Prior to Your Arrival 141 

Twenty Ways in Which U.S. Government Officials Abroad Can Help 

You (and Your Agent) Develop Business 142 

CHAPTER XIII A Final Note 143 



PART THREE HOW TO FIND AND USE AN EXPORT MAN- 
AGEMENT COMPANY 145 

CHAPTER I What's an Export Management Company (EMC)? 147 

CHAPTER II EMC's: Should You Use One? 150 

These Are the Most Active Associations of Export Management 

Companies 151 

CHAPTER III Selecting an EMC 155 

CHAPTER IV Making the Marriage Work 157 

District Offices of the U.S. Department of Commerce 160 



This manual was prepared as part of a contractual arrangement with a private con- 
tractor. The Office of Minority Business Enterprise is not responsible for the ac- 
curacy of facts, views, or opinions in the material. The Government has not obtained 
any of the business references under a pledge of confidentiality. Further, this manual 
is being published under assurances from the author that the business references con- 
tain no proprietary information and were not obtained under a pledge of 
confidentiality. 



ABOUT THE AUTHORS: 

Nelson T. Joyner, Jr., Vice President ofRockville Consulting Group, Inc. Mr. Joyner 
has over a decade's experience in international business as the export manager for 
the Industrial Products Division of American-Standard, as an international 
marketing expert for the U.S. Department of Commerce, and as an international 
consultant. Currently, he is a consultant not only to international business firms but 
also to minority-owned companies. He teaches international marketing at 
Georgetown University's School of Foreign Service. 

Richard G. Lurie, international journalist and marketing consultant. Mr. Lurie is 
author of Passports and Profits, a guide to doing business in 105 countries. Former 
editor and publisher of Export, he has participated in numerous Department of 
Commerce trade missions and contributed many articles on international marketing 
to U.S. and foreign journals. He is a recognized expert on U.S. -based export 
management companies. Currently, he is editorial director of World Wide Projects. 



PREFACE 



WHY THIS HANDBOOK? 



Since its inception in 1969, the Office of Minority 
Business Enterprise (OMBE) has provided practical 
assistance to minority business people. This inter- 
national marketing handbook, How To Develop an 
Export Business, is a continuation of this concept. It 
contains down-to-earth advice for the minority- 
owned firm that wants to sell products or services to 
customers in other countries. 

The exports of goods and services from the United 
States are now at record levels. And opportunities 
certainly exist for minority-owned firms in foreign 
markets. Minority-owned firms make a wide variety 
of products that are exportable. Others provide 
engineering or construction services for which a 
foreign demand exists. 

On the other hand, until now, only a few of these 
firms have attempted to market abroad, although 
many have the capability and the capacity. Why 
haven't they done so? For the most part, their 
management has been preoccupied with market 
development in the United States. Consequently, 
they have had little time to explore profitable sales 
opportunities abroad. Nor have they had the oppor- 
tunity to familiarize themselves with the helpful inter- 
national marketing services available from U.S. 
government agencies, as well as from private in- 
dustry. 

This handbook, then, is designed specifically for 
minority firms who are new-to-export; in other 
words, those firms without export experience as yet. 
It is a step-by-step guide a practical, how-to-do-it 
manual that describes in detail what to do, how to do 
it, and where to go for information on specific inter- 
national marketing help. 

But this handbook is different from other how-to- 
export guides. We believe minority-owned firms 
should start with the export opportunities that are 
easiest to capture. We recognize that practically every 
successful exporter reached that position through 
stages. An exporter does not become successful over- 
night. Tvnicallv. these staff es are- 



goods to foreign customers. The U.S. 
manufacturer does not need an export 
department, nor does it need to worry about 
shipping goods beyond United States 
borders. Selling normally is similar to selling 
a domestic account. You can use your own 
domestic sales personnel who do not have to 
know another language. You needn't be 
familiar with the intricacies of special export 
paperwork, and you are selling to customers 
who pay as promptly as the best domestic ac- 
counts (sometimes better!). This market, 
called the U.S. -far-export market, is huge 
and growing. For every $4 of exports of 
goods and services from the United States, 
about $1 results from U.S. -based buyers who 
make up this "export" market segment! 

Stage II: In this stage, manufacturers re- 
spond directly to inquiries or leads which 
come from foreign companies. In addition to 
selling the U.S.-for-export segment identified 
above (Stage I), the new-to-export firm will 
make occasional shipments to foreign 
customers. This stage normally does not re- 
quire a firm to have a special export depart- 
ment, but it does require some knowledge 
about the details of shipping goods to foreign 
locations, and how to get paid by foreign 
customers. 

Stage III: In this stage, manufacturers go 
beyond the occasional shipment to foreign 
customers (Stage II) and sell customers in a 
foreign country on a regular basis. The es- 
tablishment of a marketing team abroad 
sales agents and/or distributors and dealers 
in foreign countries is generally necessary. 
By now, the manufacturer probably has a 
well-established export department. Some 
manufacturers, however, can reach Stage III 
without their own internal export depart- 



Companies (EMC's). Using an EMC to 
reach foreign customers is much like using a 
U.S. manufacturer's representative (or agent) 
or a distributor/dealer in order to reach U.S. 
customers. 

This handbook starts with a discussion of selling in 
your own backyard reaching out to sell your 
products to export buyers who are located in the 
United States. Secondly, the handbook will guide the 
novice exporter in how to get a foothold in foreign 
markets; and thirdly, it will advise the firm who may 
wish to "hire" an export department; that is, use the 
services of an export management company (EMC). 

LIKE A LADDER 

The handbook is designed to reflect how a firm ac- 
tually gets involved in the various stages of exporting. 
Thus, the handbook contains a number of segments. 
Each is like a rung on a ladder. Readers can climb no 
further than they wish, consistent with their own 
needs, expectations, and resources in developing an 
export business. 

There are some who will only be able to handle ex- 
port business that comes to them easily. Perhaps they 
can do no more than sell to one of the huge Japanese 
trading companies that maintain buying offices in the 



United States. Perhaps they may want to go no 
further than selling to U.S. Post Exchanges around 
the world through special sales representatives that 
handle the large U.S. military market abroad. For 
these firms, PART ONE will assist them in getting 
started. 

Other manufacturers may just want to go a bit 
further by "skimming the cream" in export sales. 
They may not have the time or management 
resources for a deep, committed export sales effort. 
However, these firms can still develop profitable ex- 
port sales. PART TWO of this handbook is designed 
for these "part-timers." 

But, there will be those who want to go all the way 
and mount an aggressive export effort. Foreign travel 
is a must, a network of foreign distributors and/or 
agents will be needed, and management will have to 
familiarize itself with the specialized vocabulary of 
exporting. PART TWO of this handbook will also 
guide these firms. 

Some manufacturers who don't want to devote the 
time and resources to developing their own export ef- 
fort still find that they can obtain profitable export 
sales. They "hire" an Export Management Company 
(EMC) to handle their exports. PART THREE of 
this handbook will guide firms who consider this 
alternative. 

But, remember, stop where you want. 



INTRODUCTION 
HOW EXPORTS CAN PAY OFF 



WHY EXPORT? To make money is the obvious 
answer. Expanding total sales means growing total 
profits. In the United States, about one of every ten 
manufacturers is an exporter. Some 10,000 small 
firms, those with fewer than 100 employees, are 
currently exporting. It is fair to assume that they 
would not be doing so if they were not making a 
profit. 



FOUR WAYS EXPORTS CAN BOOST 
PROFITS 

1. Exports mean additional customers. This means 
greater annual sales which translates to greater 
total profit. 

2. Exporting may offer growing market oppor- 
tunities when U.S. sales have fallen off. A good ex- 
ample: the temporary U.S. recession in 1974 and 
1975 was offset for many U.S. companies that ex- 
port. In fact, export sales boomed during those 
two years. 

3. Exporting often extends the life of a product 
which is nearing the end of its usefulness in the 
United States. 

4. For seasonal businesses, exports may help keep a 
firm's plant operating by lengthening production 
schedules. 



A GENERAL RULE TO FOLLOW. If you are suc- 
cessful in selling a product in the U.S. market, 
chances are you will be successful in selling abroad. 
But frankly, some products have limited potential. 
For example, there won't be many opportunities for 
selling products of wood such as pallets in 
countries with extensive timber tracts or where low- 
cost labor can turn out a competitive product at a 
lower price than you could sell it there. 



BUT EXPORTING IS NOT FOR EVERYONE. 
Export sales can be a difficult proposition. Exporting 
is no cure for your business headaches in the United 
States, particularly if you have product problems. If 
your product is not accepted in the United States, it 
will not do well in foreign markets. And exporting 
can be time-consuming and expensive, eapecially in 
the early stages. 

WHEN TO EXPORT: A RULE OF THUMB. If 
you have a successful domestic business which is run- 
ning efficiently and profitably, and you are looking 
for new worlds to conquer, then exporting will pay 
off. But and this cannot be stressed often enough 
developing foreign markets will take the same energy, 
determination, hard work, and advance planning that 
made development of your U.S. market a success. 

BUILT-IN MINORITY EXPORTS EXPER- 
TISE. Minority business people often have a natural 
expertise which will help them in sales development 
abroad. Many were born abroad and thus have close 
personal ties with business people in their original 
homeland. Their knowledge of a second language 
and foreign business customs could be helpful. For 
example, many exporting firms in the U.S. Southwest 
are owned by those of Mexican or other Hispanic 
origin an advantage in selling to the Spanish- 
speaking Caribbean area, to Mexico, Central 
America, and South America as well. 

A SPECIAL WARNING! While some minority 
entrepreneurs may have built-in ties with potential 
customers in other countries based on a personal, 
family, or cultural relationship, sometimes they ask 
too much from these relationships. For example, 
some may want to start an export business with little 
or no prior business experience. Starting an export 
business calls for capital, business know-how, and ac- 
cess to products. Without them, success is impossible. 
Even with them, it is not guaranteed. 







PART ONE describes a gigantic portion of the export sector the U.S.-for-export 
market which is comprised of many segments. This market is ideal for the new-to- 
export firm seeking additional business that requires no specialized knowledge. Sales 
activities are basically the same as those employed when doing business with the 
firm's regular customers. 

The following chapters identify potential customers, provides discussion needs, and 
offers step-by-step instructions on how a company proceeds in selling to U.S. based 
customers. 



CHAPTER I 

THE HIDDEN EXPORT MARKET: SELLING IN YOUR 

OWN BACKYARD 



YOU MAY ALREADY EXPORT! Although you 
don't actively solicit business from customers in other 
countries, chances are your products have already 
found their way abroad. At this moment, without 
your knowing it, your products may be displayed in a 
ferreteria (what hardware stores are called in Latin 
America). Perhaps they are being used in a Nigerian 
housewife's kitchen, or perhaps they are helping a 
German firm make its product. 

Your goods can appear overseas in at least six ways 
which involve no selling effort on your part, and in 
some cases, without your knowledge! 

1. Foreign tourists visiting the United States may 
purchase your product and bring it back home. 

2. Americans often send gifts to friends or relatives 
living overseas. 

3. Some U.S. wholesalers and/or distributors are ac- 
tive exporters. The product you sold to your 
wholesaler or distributor, in turn, may have been 
resold to a foreign firm. 

4. A well-established export market exists for used 
clothing, used industrial machinery, or used con- 
struction equipment. All are popular items 
abroad. A foreign buyer may have purchased 
some used goods from one of the many specialized 
firms located in the United States for this type of 
product. 

5. A U.S. construction company, finishing an 
overseas project, often finds it less costly to sell the 
construction machinery locally, rather than bring 
it back home. 

6. You may sell your product to another U.S. 
manufacturer who incorporates your product into 
his own. The complete product may be then ex- 
ported by your customer to a foreign location. 

The examples cited are all part of a special export 

.,1 .- ,-. f nemw* 4- 1 1 -J -*-V* T T O f 4- 1 4- 



over 100 countries. What is not apparent or 
appreciated is that one-quarter or more of this $100 
billion was actually bought by customers located in 
the United States. The U.S. -based customers then 
arranged for the shipment of this $30 billion in goods 
to foreign markets. 

The U.S.-for-export market is composed of many 
segments. It's a gigantic part of the total export sector 
that's often overlooked by U.S. firms. But a surpris- 
ing amount of "export" business can be developed 
for the company that wants to get additional business 
but doesn't want to, or can't devote resources to, es- 
tablishing its own export expertise. And it requires 
almost no specialized knowledge. Sales made to this 
market segment are for the most part no different 
from sales made to your other customers. The order 
is received, in the English language, from a U.S.- 
based firm. Shipment is made, usually in domestic 
packing, to a U.S. location, and you will be paid in 
the same way as your domestic customers pay. 

FIVE EXAMPLES OF THE "U.S.-FOR- 
EXPORT" MARKET. Here are some customers 
who are likely to purchase U.S.-made goods or serv- 
ices for export. 

1. A large Chicago-based commodity broker 
purchasing grain from a farmer's cooperative in 
order to fulfill a sales contract with the Soviet 
Union. 

2. A builder of prefabricated homes, buying compo- 
nent products from U.S. suppliers to be assembled 
in prefabricated houses destined for oil-rich 
markets of the Middle East. 

3. A large engineering/construction firm, building 
an oil refinery abroad, buying U.S.-made equip- 
ment to be used in that refinery. 

4. A U.S. military post exchange (PX) abroad, 
sending orders for U.S. consumer goods back 
through U.S. government channels. 



their order in the same way as your best domestic ac- 
counts. In some cases, they may pay in advance; in 
other cases, upon delivery of your goods, consistent 
with the domestic terms of your industry. 

IDENTIFYING THE EXPORT BUYING SEG- 
MENTS MAY TAKE SOME DIGGING. It may 

not be easy to pick out and choose the U.S.-for- 
export segment best suited for your product, and it 
will take hard sales work. In this chapter, we identify 
the major "U.S.-for-export" buying segments. In suc- 
ceeding chapters, we describe each buying segment in 
detail, telling how to locate potential customers, with 
suggestions on how to approach them. 

ELEVEN IMPORTANT SEGMENTS. We'll iden- 
tify and describe the 1 1 most important segments. 

1. The large U.S. companies that purchase U.S.- 
made goods for their own foreign affiliates. Many 
large U.S. companies have manufacturing plants 
located in other countries. These plants usually 
require a wide range of U.S.-made products 
such as raw materials, components, sub- 
assemblies, and even finished products for resale. 
These large companies found in every 
industry are the General Electrics, the Du- 
Ponts, the Gillettes, the General Motors, etc. 
While much of the $15 billion worth of U.S. 
products sent by these manufacturers to their 
own plants abroad is made in the company's own 
U.S. factories, a large volume is purchased from 
other U.S. firms. 

Example: A large U.S. -based chemical company 
has a plant in Puerto Rico. When this plant needs 
scientific instruments, purchasing executives 
located in the company's New York headquarters 
may purchase the instruments and arrange for their 
shipment to the Puerto Rican facility. Suppliers 
are paid by the headquarters. 

2. Large design and construction firms purchase for 
foreign projects. U.S. design and construction 
firms awarded contracts for building major in- 
stallations abroad such as hospitals, oil 
refineries, chemical plants, etc. purchase goods 
and services in the United States. Two types of 
firms make up the segment. The first: general 
contractors typically large organizations who 
build ports, roads, and dams not only in the 
United States but in foreign countries. The sec- 
ond group, called constructors, build such things 
as steel mills, chemical plants, oil refineries, tex- 
tile plants, petrochemical plants not only in the 
United States but also in foreign countries. 



goods needed to build these foreign facilities. 

Example: The Lummus Company recently was 
asked to build a new foreign refinery. Much of the 
equipment and materials needed in this facility 
were purchased by Lummus buyers located in their 
Bloomfield, New Jersey, headquarters. 

3. U.S. branches of gigantic foreign trading com- 
panies. Japan imports $12 billion of goods from 
the United States each year. And almost half of 
this total $5 billion is bought in the United 
States by huge Japanese trading companies 
which have established branch offices in New 
York and other major U.S. cities. These offices 
buy a wide range of U.S. products: coal, cotton, 
textiles, foods, industrial machinery, consumer 
goods, etc. In addition to Japanese trading com- 
panies, a handful of European-based companies 
have also established buying offices in the United 
States. 

Example: Mitsui & Co. (U.S.A.), a subsidiary of 
the Japanese-based international trading company, 
was asked to purchase soybeans. The New York 
office located a U.S. supplier, placed the order, 
and handled all the details of the export shipment 
to Japan. The U.S. supplier was paid in U.S. 
dollars from a U.S. bank. 

4. U.S. export merchants who buy for their own ac- 
count. Thousands of U.S. -based export "mid- 
dlemen" purchase and export goods to foreign 
buyers. They are called export merchants or job- 
bers, and they are similar to domestic wholesalers 
or jobbers except they sell abroad. Some are 
large, some are small, and while they cover all in- 
dustries, they are most prevalent in exports of 
general merchandise and consumer goods. Some 
are even domestic wholesalers or distributors 
that have established special departments to han- 
dle sales to foreign buyers. Others only export 
and do no more than sell to customers in a few 
countries abroad. 

Example: Middle East Traders, Inc., is a 
Washington, D.C.-based export merchant. A con- 
tractor based in Kuwait, building a hospital, re- 
quested Middle East Traders to buy much of the 
equipment for this hospital. Middle East Traders 
located suppliers in the U.S., placed orders, and 
arranged for all the export details. 

5. Large foreign companies with offices in the United 
States. In addition to the huge trading companies 
mentioned above, many foreign corporations 
maintain their own U.S. offices. These offices 
purchase from U.S. suppliers, and usually handle 



recently was asKea 10 purcnase instru- 
ments for a new A GIF nuclear plant in Italy. 

6. The U.S. military abroad. Last year post ex- 
changes (PX's) located overseas sold over a 
billion . dollars worth of U.S. merchandise to 
overseas U.S. military personnel and their de- 
pendents abroad. Most orders for goods are 
placed in the United States, and shipping de- 
tails are'arranged by the Department of Defense. 

Example: The U.S. military in Germany wished to 
purchase ethnic cosmetics to sell in their many 
PX's in Germany. This requirement was forwarded 
to specialized buyers located in Dallas, who iden- 
tified potential suppliers, placed the order, and 
arranged for payment and shipment. 

7. U.S. manufacturers supplement their own product 
lines. Some U.S. manufacturers seek out 
products made by other U.S. companies on an 
exclusive basis to round out their own export 
product line. For example, a manufacturer of 
portable electrical drills may also export a line of 
drill bits that he does not make. This is called 
"piggybacking." 

Example: American Standard, Inc., is a large and 
successful manufacturer of plumbing products. Not 
only does American-Standard export its own line 
of fittings and fixtures, but it also exports valves 
and other related equipment made by other U.S. 
suppliers. This arrangement benefits not only 
American-Standard, but also foreign distributors 
and other U.S. suppliers. 

8. The United Nations buys. Not all United Nations 
agencies purchase merchandise, but the United 
Nations Development Programme (UNDP) un- 
derwrites annual equipment purchases of about 
$50 million. The UNDP prefers to have the 
manufacturer handle the foreign shipment. But 
for smaller manufacturers who lack exporting ex- 
perience the UNDP will organize the shipping 
and pay the manufacturer in dollars from a New 
York bank. 

Example: The Food and Agricultural Organiza- 
tion (FA O), a UN agency, sponsored a fish proces- 
sing plant in Nigeria. About $130,000 in equipment 
was needed. Bids were solicited from U.S. firms. 
Equipment from U.S. suppliers was shipped to 
New York, where the UN arranged for export to 
Nigeria. 

9. Foreign governments purchase U.S. -made goods 
and services. About 25 foreign governments have 
established offices in the United States to buy 



yvasmngion. ineir ojjice in san rrancisco was 
asked to locate a supplier of rice, and purchase rice 
in bulk for export to Korea. 

10. Many foreign department stores buy U.S. -made 
products. Some have established their buying of- 
fices; many others utilize the services of "resi- 
dent" buying offices to place orders for them. 

Example: Takishimaya, one of Japan's largest 
department stores, maintains their own buying of- 
fice in New York to seek out U.S. -made goods that 
are likely to sell well in their Tokyo store. Recently 
they were asked to purchase Indian craft items, in- 
cluding jewelry. Suppliers shipped the merchandise 
to a west-coast warehouse where the buying office 
arranged for shipping to Japan. Suppliers were 
paid from accounts maintained by Takishimaya in 
U.S. banks. 

1 1 . Many foreign buyers visit the United States to 
locate and even purchase U.S. goods. Most come 
to see individual suppliers; however, many 
schedule special trips to coincide with trade 
events. The U.S. Department of Commerce 
actively supports these foreign buyers. 

Example: Executives from Dutch automotive sup- 
ply firms visited the International Automotive 
Service Industries Show in San Francisco. These 
visitors purchased $100,000 worth of U.S. goods 
during and after the show. 

OBVIOUS ADVANTAGES OF SELLING TO 
THE U.S.-FOR-EXPORT MARKET. Selling to 
export buyers located in the United States who 
want your product has three main advantages: 

1. You can sell to these customers usually at the 
terms you normally offer your present customers. 
In some cases, you might be paid in advance. 
Normally, you will be paid in dollars, from an acc- 
ount in a U.S. bank. 

2. You'll be able to ship your products to a location 
in the United States. This frees you from special 
documentation normally associated with export 
shipments. The export buyer arranges for the exp- 
ort of your product. 

3. You can contact this $30 billion "U.S.-for-export" 
market with your own domestic marketing 
organization. You won't need foreign sales 
specialists. 

BUT IT WILL BE HARD WORK. It may be 

difficult to uncover and identify the U.S.-for-export 
segment that best suits your needs. And finding the 



and perseverance, then your chances of success will 
be excellent. On the other hand, don't approach this 
market unless you are certain you can deliver to new 
customers. New customers anywhere, domestic or 
export, will not place repeat orders if you have 
problems in either product quality, production, or 
meeting delivery schedules. And you might not get 
the first or "trial" order if export buyers sense any of 
these problems. 



NOTE WELL. U.S. export buyers do not care if 
suppliers are minority-owned or not. However, if the 
supplier is new, or small, then these buyers may 



I t I 

equate newness or smallness with potential supplier 
problems. The main question in the buyer's mind, 
whether located in the United States or abroad, is 
"can the supplier deliver on time?" 

THEY'LL BE LOOKING FOR YOU. Most U.S.- 
for-export buyers have purchasing needs that can 
only be satisfied by seeking out U.S. suppliers. Thus, 
you may be contacted by one of them. However, the 
chances of getting business will be increased 
significantly if you mount a modest marketing effort 
to try to reach them. This volume describes each 
segment in detail, describes how buyers purchase, 
and gives tips on tapping each market segment. 



CHAPTER II 

LARGE CORPORATIONS PURCHASE BILLIONS OF DOLLARS 

WORTH OF U.S.-MADE GOODS FOR USE 

BY THEIR FOREIGN AFFILIATES 



U.S. COMPANIES WITH FOREIGN 
OPERATIONS MAY NEED YOUR GOODS FOR 
THEIR FOREIGN PLANTS OR 
CUSTOMERS. This chapter describes an important 
segment of the U.S.-for-export market large corp- 
orations, the General Motors, the Caterpillars, the 
DuPonts, the ITT's. Your firm may already number 
these companies among your present customers. If 
so, you may even be supplying your products to their 
overseas facilities. 

Example: A Cleveland-based firm makes molded 
rubber products. General Motors is one of their best 
customers. GM headquarters has placed orders with 
the firm for products which will be needed in some of 
GM's foreign plants. The Cleveland firm doesn't 
need an export department at this time. It ships the 
products to a U.S. location, invoices General 
Motors' headquarters, and gets paid in U.S. dollars 
from a U.S. bank. General Motors handles all the 
export details. 

Like GM, some 3,500 U.S. companies have 
established subsidiaries in foreign countries. In fact, 
over 25,000 such facilities (called plants, factories, 
subsidiaries, foreign branches, etc.) now exist. They 
require a large volume of U.S. -made goods. It's 
estimated that one of every four shipments of 
manufactured goods exported from the United States 
goes to a foreign firm partly or entirely owned by a 
U.S. corporation. These foreign affiliates may need: 

1. U.S. -made machinery or other equipment to make 
or test their own products. 

2. U.S. components to incorporate into their own 
finished product. 

3. U.S. raw materials for use in their factories. 

4. U.S.-made finished products to sell along with 



to need goods that are not used in the U.S. operations 
of the parent corporation. In most cases, the foreign 
subsidiary will ask its U.S. parent company to buy 
the product and arrange for shipment. 

This market segment is a potentially lucrative one 
for minority-owned companies. Some reasons for 
this: 

1. It's a large export market segment. Purchasing 
executives in these large corporations buy annual- 
ly $15 billion of U.S. manufactured goods. And 
normally these large corporations handle all the 
export details. 

2. Most large corporations want to increase the 
number of minority-owned vendors. 

3. These large corporations may already buy your 
product, but only for the domestic side of their 
huge operations. If they are your customer 
already, selling them for their foreign needs may 
be easy. 

PURCHASING HABITS VARY FROM FIRM TO 
FIRM. Unfortunately no purchasing pattern exists. 
Every company seems to have evolved its own 
methods of purchasing U.S. goods to meet the 
requirements of its foreign affiliates. Here are three of 
the more prevalent methods: 

1. In some corporations, the needs of foreign plants 
may be handled by a product purchasing specialist 
who buys for the U.S. plants as well. If you are 
presently selling to a corporation whose 
purchasing is organized in a similar manner, 
chances are you're already supplying goods for 
foreign plants. 

2. At others, a separate international buying group 
located within the headquarters purchasing 
deoartment has the sole resoonsibilitv to buv for 



operations. In this case, the buyer may even be 
located in a different city from the domestic buyer. 

Even if you presently sell to large corporations, 
don't assume the "international" buyer will know 
about your company or your products. 

YOU DON'T NEED TO BE AN EXPORT 
EXPERT. Remember, when you sell to a large corp- 
oration buying for its own foreign affiliates: 

1. Your goods are shipped to a location in the U.S. 
You don't have to worry about special packing, or 
complicated paperwork. The U.S. parent corp- 
oration handles these details when it ships the 
goods to its foreign affiliate. 

2. You won't have to worry about receiving payment 
in foreign currency. And there's practically no risk 
of nonpayment, provided you meet their 
requirements. 

SELLING THEM REQUIRES DIGGING. The 

large corporations which have been asked to 
purchase for their foreign affiliates naturally do not 
wait for vendors to contact them. If it's a product 
that's been purchased before, the corporation reviews 
its vendor lists. If it's for a product not previously 
bought, the purchasing executive uses a variety of 
methods to identify potential suppliers. 1 Thus, there's 
a chance you may be contacted by the large corp- 
orations based on their research. 

However, chances for getting this "export" 
business will be improved if you take action yourself. 
Contact them. Don't wait for them to contact you. 
Here are some suggestions on how to do this: 

YOUR PRESENT CUSTOMERS MAY NEED 
YOUR PRODUCTS FOR THEIR FOREIGN 
AFFILIATES. Ask your large corporate customers 
what their international requirements are. Find out 
how they buy for their foreign affiliates. 

1. List your customers you believe are likely to have 
international operations. Don't overlook 
customers that are divisions or subsidiaries of 
large corporations. Some may appear to be "smal- 
I" firms, but in reality are part of industrial giants. 

2. Either telephone or write to the individual (or 
department head) who normally places orders for 
your products. Ask if they handle foreign 
requirements for your product. If not, ask for the 
proper department and address. (Don't be 
surprised if some are uncertain domestic 
purchasing aeents aren't alwavs familiar with 



3. Write or telephone the appropriate individual. 
Find out the international requirements for pro- 
ducts such as yours, how they're purchased, and 
what procedures to follow as a potential supplier. 
Be sure to mention that you presently sell to their 
U.S. facilities. 

4. Develop your sales plan! 



SOURCES TO IDENTIFY FIRMS WITH 
INTERNATIONAL AFFILIATES 

You'll find several references to help you identify 
large international firms. Most can be found in a 
good business library. 

1. Fortune Double 500 Directory lists the top 1,000 
U.S. manufacturing firms practically all inter- 
national in scope ranked by sales. The directory 
includes a separate industry and product index. 
Available ($4) from Fortune Magazine, Room 
1828, Time/Life Building, New York, N.Y. 10020. 

2. Directory of American Firms Operating in Foreign 
Countries. Identifies those U.S. firms which have 
foreign affiliates. Available from World Trade 
Academy Press, 1 West 39th Street, New York, 
N.Y. 10018. 

3. Standard U.S. business directories such as Moody' s 
Index, Thomas Register, Standard and Poor's, and 
Dun and Bradstreet's Million Dollar Directory. 
Most of these directories identify the location of 
the firm's headquarters and the address of the 
various manufacturing divisions. 



TIPS ON SELLING LARGE 
CORPORTATIONS 

Many large corporations are doing their best to 
locate potential minority-owned suppliers. Here's 
how to make their job easier: 

1. Register your company and products with the 
National Minority Purchasing Council. A com- 
puter bank of qualified minority-owned firms has 
been established. For information, contact 
National Minority Purchasing Council, 1925 K 
Street, N.W., Washington, D.C., Telephone (202) 
466-7077. 



GETTING NEW CUSTOMERS. Other large inter- 
national corporations may not be your customers, 
but may be buying products similar to yours for their 
foreign affiliates. Here are some steps you might 
follow to "tap" this potential: 

1. Make a list of corporations likely to need your 
product. Remember, only 3,500 firms have foreign 
affiliates. The box above describes sources to help 
identify these firms. 

2. Write the headquarters of these corporations for 
information about their international require- 
ments for products similar to what you make, and 
how they're purchased. Since all these corpora- 
tions will be large, you may want to address the 
letter to the attention of the Purchasing Depart- 
ment, but send copies to others within the cor- 
poration. For example: the president and the 
minority business coordinator. 

3. Remember, the more knowledgable you are about 
the operations of the potential customer, the more 
likely the chance of a successful sale. One source 
that can assist you in learning about large cor- 
porations is their annual report. Most companies 
write about their foreign operations in the annual 
report. You can get it by writing to the company's 
public relations department. 

4. Develop your sales plan! 

TO SUM UP: A LARGE MARKET POTENTIAL 
WITHOUT NORMAL EXPORT HEAD- 
ACHES. Large U.S. corporations who purchase 
U.S. -made goods for their foreign affiliates represent 
a potentially large "export" market for U.S. 
manufacturers. Vendors normally don't have to 
worry about export paperwork or complicated ship- 
ments. Payment terms are no different from your best 
customers. Successful sales, however, depend upon 
reaching the appropriate buyer. This executive may 
not be the same one purchasing goods for the com- 
pany's U.S. facilities. And remember, even if the 
company doesn't need your product for its U.S. 
facilities, a foreign affiliate might need it. 



TELEPHONE CALLS TO PURCHASING 
DEPARTMENTS? 

A telephone call may not be the best way to find out 
information. Purchasing executives are usually busy 
and frequently unwilling to answer casual telephone 
inquiries. In all probability, they'll say "Write us a 
letter." 



TIPS ON WRITING TO LARGE 
CORPORATIONS 

1 . It's not essential to have the name of a specific in- 
dividual within the corporation. Letters can be 
directed to the attention of a particular depart- 
ment, or a particular title. For example: 
Attention Purchasing Department or 
Attention Vice President, Purchasing. 

2. Since these companies are large, with many dif- 
ferent departments, divisions, and subsidiaries, 
don't hesitate to send copies of your letter to 
several departments within the corporation. 

3. Briefly describe your products. Ask whether the 
company has need for these products in their 
foreign affiliates and if so, how they are 
purchased. 

4. State that you are a minority-owned company. 
(You might want to send a copy of your letter to 
the firm's minority business coordinator. Most 
large firms have one.) 

5. List some of your present customers. (This is im- 
portant!) 



CHAPTER III 

'PIGGYBACKING" WHEN ANOTHER MANUFACTURER EXPORTS 

YOUR PRODUCT FOR YOU 

This chapter will be helpful to manufacturers of virtually any type of 
industrial or consumer product. 



MANUFACTURERS MAY WANT TO EXPORT 
YOUR PRODUCT. An estimated 10,000 exporting 
manufacturers (about one-third of the total) not only 
export their own products, but also sell selected items 
made by other U.S. firms. 

1. The exporter may need additional products in 
order to sell a "package" in foreign markets. 

Example: The Kewanee Boiler, Inc., makes an in- 
dustrial steam and water boiler. Users also require 
pumps and valves. In the United States, the 
customer normally purchases these accessories 
separately; however, in many foreign markets 
customers want to buy the boiler, the pumps, and 
other accessories from one source. It's easier for 
them to do this. Therefore, Kewanee's export 
department purchases U.S. -made pumps and valves 
to satisfy their foreign customers' needs for "one- 
stop" shopping. 

2. Foreign customers may have asked the exporter to 
obtain specific merchandise not available in their 
markets. 

Example: Ets. Diab, a large Lebanese distributor 
of building products, couldn't find a certain brand of 
relay switches in the Lebanese marketplace. They 
asked the export department of Westinghouse 
Electric, one of their U.S. principals, to purchase 
this product for them. 

3. Some U.S. exporters want to sell additional 
products in foreign markets to increase their total 
export sales. In some cases, U.S. exporters will ask 
the manufacturer to make a line with the ex- 
porter's brand name. 



for little additional expense. Thus, they sought out 
complementary products to add to their own line. 

As noted in the first two examples, exporters may 
deal with other manufacturers on an order-to-order 
basis. But sometimes as the third example describes, 
the export effort may be ongoing, and even for- 
malized by an agreement between the exporter and 
the manufacturer. This is called "piggybacking." 

LIMITED POTENTIAL FOR MINORITY- 
OWNED MANUFACTURERS. This market seg- 
ment is not nearly as large as the one discussed in the 
previous chapter. Nor is it as easy to tap. But it does 
offer two kinds of opportunities. First is the pos- 
sibility of selling to an exporting manufacturer on an 
order-to-order basis. Secondly, the manufacturer 
may be willing to add your products to his regular ex- 
port line. In either case, your goods will be shipped to 
a U.S. location. Payment terms will be similar to 
domestic terms. 

SELLING ON AN ORDER-TO-ORDER 
BASIS. Exporting manufacturers buying another 
firm's products on an order-to-order basis have vary- 
ing purchasing patterns. 

1. In some firms, usually the larger ones, the 
purchasing executive will be part of the export 
department. (And the domestic purchasing 
department may not be aware of the export 
department's needs.) 

2. In other firms, the export department relies on the 
domestic purchasing department. 

Naturally, the manufacturer will be looking for 



Here are some suggestions to follow up on the 
potential opportunity of obtaining occasional orders 
from existing exporters. 

1 . Contact, by telephone or mail, the export depart- 
ment of your present customers. If telephoning, 
ask the switchboard for the export manager; if 
writing, address your letter "Attention Export 
Manager." (Note: you may find that customers 
who are large firms may have a centralized export 
division which handles exports for many 
divisions.) 

2. Find out if your product is needed. If so, ask how 
best to proceed. 

3. Develop your sales plan! 

OPPORTUNITIES FOR PIGGYBACKING. An 

exporting manufacturer might be interested in 
piggybacking another firm's products for two 
reasons. First, exports to existing markets can be in- 
creased at little additional expense. And relationships 
with foreign customers can be solidified by satisfying 
their requests for additional products. Secondly, in 
new foreign markets, potential customers may be 
easier to attract with a more complete line. 

There are potential disadvantages to the manufac- 
turer whose products are piggybacked. Your 
products are subordinate to the piggybacker's own 
product line. Thus, they may not be promoted as 
aggressively. The exporting manufacturer may feel 
greater loyalty to his own wares and he may be un- 
der greater pressure from his management to export 
his own products. 

The decision to piggyback normally is made by the 
export sales manager. In most cases, he determines 
the products needed and he seeks out potential sup- 
pliers. In some cases, a manufacturer may approach 
the exporter hoping to convince the exporter to 
piggyback his product. 

AT WHAT PRICE DO YOU SELL? Most ex- 
porting manufacturers who are serious about 
piggybacking will ask for an extra discount beyond 
your best distributor price. This may be justified if 
the exporter plans to heavily promote your products 
in foreign markets. Other exporters will ask only for 
your distributor price. Normally, your domestic pay- 
ment terms will be acceptable, but some piggybackers 
may ask for additional time to pay, because their 
foreign customers have delayed paying them. 

SALES ARRANGEMENTS. The exporter may re- 
auest a formal r.ontrart Some, however, will onlv 



FINDING A PIGGYBACKER WON'T BE 
EASY. Many manufacturers only want to export 
their own products. Others who offer to piggyback 
may not be willing to promote your products as 
aggressively as their own. 

1. Limit your search to your own industry, and 
remember the prime requirement of piggybacking: 
the exporting manufacturer must have a well- 
established foreign sales network in which your 
product fits. 

2. Contact your industry's trade associations. 1 Their 
executives will know firms active in export, and 
can suggest potential piggybackers. 

3. Contact trade magazines in your industry. 2 Their 
editors are knowledgeable and may help you select 
the best firms to approach. 

4. Contact the nearest district office of the U.S. 
Department of Commerce. Check your local 
telephone directory for the number. Ask for the 
director, who may be able to give you leads, or at 
least suggest additional sources. (A listing of of- 
fices appears on page inside back cover. 

Note well: Companies interested in finding an ex- 
porter to "piggyback" their products should also 
consider using an Export Management Company 
(EMC). This arrangement is covered in detail in 
PART THREE of this Handbook. 

CONTACTING PIGGYBACKERS. After 
developing your list, write a letter. A sample is given 
in the box on page 16. The following points are imp- 
ortant. 

1 . A description of your product line. 

2. A partial listing of your customers. 

3. Some evidence of your reliability as a supplier. 

4. Description of how you sell in the United States. 

WHEN YOU MEET FACE TO FACE. If the 

potential piggybacker manufacturer is interested, his 
export manager most likely will write or telephone 
suggesting a meeting. At this meeting, he will want to 
know more about your company, products, com- 
petitors, customers, availability of promotional 
material, and pricing. You should be interested in in- 
formation about: 

1. What products the firm now exports. 



*The Encyclopedia of Associations, published by Gale 
Research Comoanv, Book Tower. Detroit, Mich. 48226 



2. How your product will be promoted in par- 
ticular, who will handle your product, how often 
does he travel abroad, etc. 

3. Type of distribution used in major foreign 
markets. 

4. Export pricing policies. 

5. Identification of other firms being piggybacked. 
(Check with these firms to find out if they are hap- 
py with the arrangement.) 

6. Estimated amount of export sales for your 
product. 

7. Countries covered by the exporting manufacturer. 
Be sure to find out if he covers Canada and Puerto 
Rico, potentially important markets but ones that 
some manufacturers consider domestic markets. 

SHOULD YOU HAVE A CONTRACT? If there's 
a mutual interest, you should insist at least on a letter 
of understanding. The important points to cover: 

1 . Set the time of the agreement. Don't get stuck with 
an arrangement which would hinder your ability 
to establish your own export effort, or which you 
couldn't change if dissatisfied with the exporter's 
performance. 



2. Check over the pricing structure. Consider an ex- 
tra discount if the manufacturer agrees to promote 
your product, or if you believe a lower price would 
result in additional sales volume for your product. 

3. Ask for exclusivity. You won't want the exporting 
manufacturer to handle your competitor's 
product. 

4. Countries covered. Be certain to find out what 
countries the piggyback covers. In large corpora- 
tions, foreign factories may have been established 
in several foreign countries, and the export depart- 
ment is not permitted to sell in those countries. If 
this is so, you'll want to either sell yourself in these 
markets, or try to find another piggybacker. 



TO SUM UP: PROFITABLE BUSINESS CAN 
RESULT. The manufacturer willing to spend time in 
identifying potential piggybackers, and in following 
up with a select number, can get additional sales. 
Again, no special export expertise will be needed. But 
remember, your products may play "second fiddle" 
to the exporter's own products. Another alternative 
to consider is using an Export Management Firm, a 
possibility so important that we have discussed it in a 
separate section of PART THREE. 



YOUR COMPANY, INC. 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 



(THIS IS A SAMPLE OF A LETTER THAT COULD BE SENT TO A "PIGGYBACKER") 



kBC Manufacturing Company 

!33 Main Street 

lometown, Virginia 22101 USA 

ientlemen: 

le are seeking a firm such as yours to "piggyback" our line of laboratory scales 
n export markets. Your name was suggested by (name source). Enclosed is litera- 
;ure describing our scales which may complement your line of laboratory glassware, 

in the United States we use manufacturer's representatives to sell to scientific 
nstrument supply houses and directly to large users in the chemical process 
ndustry. Our customers include such large companies as (name them). We deal 
/ith over (name number) supply houses throughout the United States. Our annual 
;ales have grown to $XXX,000 in the 10 years we have been in business. 

)ur product line might fit well into your existing export distribution channels. 
!f you are interested, we would be pleased to meet with representatives of your 
r irm to discuss the possibility of export sales. Don't hesitate to telephone if 
'ou would like additional details. 

Sincerely, 



Nelson T. Joyner, Jr, 
President 



CHAPTER IV 

SELLING TO LARGE FIRMS WHO DESIGN AND BUILD FOREIGN 

FACILITIES 

This chapter will be hjelpful to manufacturers and distributors of 

industrial products. 



ANOTHER BILLION DOLLAR U.S.-FOR EX- 
PORT MARKET SEGMENT. This chapter discus- 
ses the huge purchase of U.S. equipment by firms 
such as Fluor Corporation; Bechtel, Inc.; Kaiser 
Engineers; the Lummus Company for plants and 
other facilities which they build in foreign countries. 1 
Some of these firms also have the capacity to design 
as well as build. 2 These firms (which we call 
designer/builders) have a "turn-key" capability. This 
means they could sell and deliver a ready-to-operate 
plant. Their customers need only to "turn the key" to 
start up operations. 

Sometimes the owners of the projected installation 
will buy all the material needed for the installation. 
But more frequently the designer/builder will 
purchase, arrange for shipping to the project site and 
then build the installation. Such firms purchase over 
$2 billion in U.S. -made goods for use in multi-million 
dollar projects under construction in foreign 
countries. And there are probably no more than 75 
firms which account for most of the business. These 
foreign projects represent about 20% of the U.S. 
designer/builders total work. The box on page 23 
lists typical projects undertaken by designer/builders. 

In this chapter, we also discuss a specialized seg- 
ment of this market: companies which prefabricate 
homes and other buildings. A growing number of 
these firms have been getting orders from foreign 

Two types of firms make up the segment. First, general 
contractors typically large organizations building 
hospitals, schools, offices, etc. and projects such as ports, 



customers, in particular those from the oil-rich Mid- 
dle East. These firms purchase a large volume of 
U.S.-made products for their prefabricated homes. 

HOW DESIGNER/BUILDERS PUR- 
CHASE. Purchasing is a vital part of the project. 

1. Frequently, a designer/builder works on a fixed 
price basis. Thus, the cost of purchased materials 
is important. 

2. Delivery schedules are critical. If a supplier fails to 
keep to his promised shipping schedule, this can 
cause delays in the project's completion. The 
designer/builder's customer often invokes a con- 
tract "penalty" clause if the project is not com- 
pleted by a specific date. Thus, the 
designer /builder's procurement executives ex- 
pedite shipment. 

3. Careful attention is given to material specifica- 
tions. Designer/builder firms (and owners) cannot 
tolerate product failures in these projects. Product 
reliability is vital. 

DESIGNER/BUILDERS MAY NOT ALWAYS 
BUY IN THE U.S. If a U.S. designer/builder gets a 
contract to build a project abroad, he may not 
purchase U.S.-made equipment. First, the owner's 
wishes must be considered. A German oil company, 
contracting with a U.S. designer/builder for a new 
refinery, may insist on German products wherever 
possible. Secondly, the wishes of those involved in 
financing (particularly if it's government financing) 
may be critical. The Japanese government might loan 



TYPICAL FOREIGN PROJECTS AWARDED TO U.S. DESIGNER/BUILDER FIRMS 



Type Project 

Tehran 

International Airport 
Iran 

LNG Facility/Ammonia 

Plant 

Algeria 

Housing/Medical 
Facilities Saudi 
Arabia 

PVC Plant 
Canada 

Railroad (expansion) 
Surinam 



Owner 
Government 

Sonatrach 
Government 



Diamond 
Shamrock 

Government 



U.S. Designer /Builder 

Tippetts-Abbett-McCarthy- 
Stratton* 



Pullman-Kellogg 
BlountBros. 

C.F. Braun&Co. 
Morrison-Knudsen 



Estimated 
Value 

$ 1 billion 



$ 1.3 billion 
$120 million 

$ 50 million 
$ 60 million 



*NOTE: This firm functions as the Architect and Engineer. It designs the project and supervises the General 
Contractor for the client. 



And finally, the wishes of the designer/builder may 
be critical. As sophisticated purchasers, the firm may 
"shop" several countries to find the best quality at 
the best price. 

PURCHASING PATTERNS VARY. Purchasing 
patterns vary from firm to firm, and from project to 
project. 

1. In some designer/builder firms purchase of 
specific products is the responsibility of a 
specialist buyer, whether the products are destined 
for a foreign project or one being built in the U.S. 

2. In other designer/builder firms, a buyer may 
purchase only for foreign projects. This buyer may 
be located in the same office even across the aisle 
from his domestic counterpart or he might be 
thousands of miles away in another office. 

3. And sometimes purchasing responsibility may 
change from project to project. The buyer might 
be located in the U.S. or overseas. 

NOTE WELL: All designer/builder firms keep ex- 
tensive supplier (vendor) files. Through the years, 
lists of approved suppliers have been developed for 
their "acceptable" bidder lists. These suppliers will 
usually be asked to submit bids when the 



"We give those on our bid list enough information on 
the equipment required so they can send us a respon- 
sive bid, not only on price but on delivery as well." 
The very large designer/builders rarely need supplier 
directories. They are aware of potential suppliers 
anywhere in the world for the components and 
machinery they will need for the foreign projects. In 
addition, as one executive says, "We classify all sup- 
pliers on their responsiveness to delivery, price, and 
product quality." 

TAKING ADVANTAGE OF THIS 
MARKET. You don't need to be an export expert. 
Normally you ship to a U.S. location, and payment 
terms are similar to the terms of your industry. Some 
U.S. designer/builders are trying to give more 
business to minority-owned firms. But not quite to 
the extent that you'll find among the large manufac- 
turers discussed in Chapter II. 

HOW TO SELL THE MARKET. Make sure the 
important designer/builders know about your 
products. Try to get on their approved supplier list. 
Secondly, once you are on their list, an additional 
"selling" campaign may be appropriate on specific 
projects. 



If you're not on their list as yet, here are some steps 
to follow: 

1 . Develop a list of the leading designer/builders. It's 
not hard; remember, there are no more than 60 
doing most of the international business. The box 
on page 21 identifies the important ones. 

2. Contact these firms. A letter will be the best ap- 
proach. Be specific about your product, your ex- 
perience in dealing with designer/builder firms, 
and your company's capabilities. (See the box on 
page 22 for a sample letter to a designer/builder 
firm.) 



THE TOP 

DESIGNER/BUILDERS: 
HOW TO FIND THEM 

About 60 firms design and/or build the lion's share 
of foreign projects awarded to U.S. firms. Another 
100, who only design facilities, get most of that 
business. Here are some sources to identify these 
firms: 

1. The National Constructor's Association (NCA), 
the major association of builder firms. Forty-eight 
of the largest are members. Their membership 
directory is available for the asking. NCA's ad- 
dress: 1101 15th Street, N.W., Suite 1000, 
Washington, D.C. 20005. 

2. Engineering News-Record, a weekly McGraw-Hill 
publication, annually surveys U.S. 
designer/builder firms. Those who have inter- 
national work are included in either the ENR 500 
Design Firms or the ENR 400 Largest Construction 
Contractors. They're available for $1 each from 
the Reprint Department, Engineering News- 
Record, P.O. Box 692, Highstown, N.J. 08520. 

3. American Consulting Engineers Council (ACEC), 
the major association of designer firms. One 
hundred of the largest are members of the associa- 
tion's international division. Their international 
engineering directory (about $10) lists firms, type 
work, past projects, and principal executives. 
ACEC's address: 1155 15th Street, N.W., 
Washington, D.C. 20005 

4. Associated General Contractors of America 
(AGC), an association of firms that build roads, 



3. If the designer /builders are interested in your 
products, prepare for a personal visit from their 
executives. An executive of Lummus says, "We 
visit all firms we seriously consider as approved 
suppliers. We want to evaluate their production 
facilities, and their labor force. We want to be 
positive they can build the equipment we need and 
deliver it on time." 

4. Develop your sales planner! 

FINDING OUT ABOUT FOREIGN PROJ- 
ECTS. Once you're an approved supplier for 
designer/builders, you'll get requests from them to 
furnish bids on use of your products, when necessary, 
in foreign projects. However, if you want to boost 
your chances in getting business from them, you may 
want to consider some market research of your own. 
It's particularly important if yours is a unique 
product, not likely to be readily specified in the 
design phase. Here are some steps to follow: 

1. Develop an intelligence system to identify projects 
and the designer/builder firm awarded the con- 
tract. See the box on page 32 for a listing of 
sources which could be useful in setting up this 
system. 

2. Develop a follow-up program with specific 
designer/builder firms who have been awarded 
contracts for the specific projects. In some cases, 
they may not need help in specifying your product. 
In other cases, it may be necessary to sell them on 
your product's advantages. 

THE IMPORTANCE OF FIRMS THAT ONLY 
DESIGN. Some 80 large U.S. architects and 
engineering firms are retained by foreign clients to 
design a wide range of facilities. These firms specify 
what material will be needed for the construction 
phase of the project. Sometimes the material is 
specified by brand name. Thus, if a U.S. firm wants 
to have a chance of supplying their products for such 
a project, selling must start early. A&E firms main- 
tain extensive product and supplier files. It won't hurt 
for firms who want business to send product 
literature. In some cases, the supplier may be asked to 
provide application assistance and cost estimates to 
A&E firms working on specific projects. 

A DIFFERENT KIND OF DEiSIGN- 
ER/ BUILDER FIRM. In recent years, about 
20 firms that specialize in building pre-fabricated 



Selling to the prefab builders is much like selling to 
a designer/builder. Prefab builders work from ap- 
proved supplier lists. It's tough to break in, but it can 
be done. If you're already on their approved supplier 
list, your product may already be going overseas. If 
you're not on their list, here are some suggestions 
that may be helpful in becoming an approved sup- 
plier. 

1 . Obtain a listing of prefabricated home builders in- 
terested in foreign markets. The box on page 24 
lists those firms interested in foreign business as of 
1976. To update this list, contact the National As- 
sociation of Building Manufacturers, 1619 Mas- 
sachusetts Avenue, N.W., Washington, D.C. 
20036. Their membership directory is available at 
a nominal cost. 

2. Contact these firms. Describe your products and 
your company. Express an interest in becoming an 
approved supplier. 

3. Follow-up with those prefabricated builders ex- 
pressing an interest in your products. 

4. Develop your sales plan! 5 

WHO'S GETTING THE BUSINESS? It's not easy 
to uncover those designer/builders who are awarded 
contracts for foreign projects. However, with some 
effort, you should be able to develop an intelligence 
system. We have listed some sources that may prove 
helpful: 



5 It's beyond the scope of this handbook to go into specific 
details on developing a sales plan. It should cover, though, 
your strengths and weaknesses, your sales targets (ex- 
pressed in measurable terms), and the specific steps you will 
undertake to reach those targets. 



1. The construction trade press. Magazines such as 
Engineering News-Record, The Constructor, 
Construction Equipment and Methods follow this 
field. Issues of their magazines identify contract 
awards. 

2. The trade press for particular industries. 
Magazines directed toward the petroleum in- 
dustry, the chemical process industry, the textile 
industry, etc., also identify awards to 
designer/builders. 

3. Announcements of foreign projects which receive 
loans from the Export-Import Bank of the U.S. 
These announcements frequently identify the U.S. 
designer /builders involved with the particular 
project. All announcements identify the foreign 
borrower. To be placed on a free mailing list, re- 
quest an application from: Public Affairs Office, 
Export-Import Bank of the United States, 811 
Vermont Avenue, N.W., Washington, D.C. 
205 1 1 . Remember, if the foreign owner gets a loan 
from Ex-Im, he'll have to purchase U.S. equip- 
ment. 



TO SUM UP: A LARGE BUT DIFFICULT 
MARKET. Even though designer/builders (and pre- 
fabricated home builders) purchase a substantial 
amount of U.S.-made goods for overseas projects, 
business is not easy to obtain. Only approved sup- 
pliers receive orders. But profitable business is possi- 
ble for firms willing to devote time and effort in 
becoming an approved supplier. And advantages ex- 
ist when these designer/builders "export" your 
products. You won't have to worry about export 
shipping and payment details. Selling them will be 
just like selling your customers in the U.S. 



THESE FIRMS DESIGN AND BUILD MULTI-MILLION DOLLAR FACILITIES IN FOREIGN COUNTRIES 



Guy F. Atkinson Company 

P. 0. Box 593 

(TO West Orange Avenue) 

S. San Francisco, Calif. 94080 

(415) 761-0600 

The Austin Company 
3650 Mayfield Road 
Cleveland, Ohio 44121 
(216) 382-6600 



Badger America, Inc. 
One Broadway 
Cambridge, Massachusetts 
(617) 494-7000 



02142 



Bechtel Corporation 

P. 0. Box 3965 

(50 Beale Street) 

San Francisco, Calif. 94119 

(415) 764-5000 

C. F. Sraun & Company 
1000 South Fremont 
Alhambra, Calif. 91803 
(213) 570-1000 

Catalytic, Inc. 
1500 Market Street 
Philadelphia, Pa. 19102 
(215) 864-8000 

Combustion Engineering, Inc. 
1000 Prospect Hill Road 
Windsor, Conn. 06095 
(203) 688-1911 

Crawford & Russell Incorporated 
733 Canal Street 
Stamford, Conn. 06904 
(203) 327-1450 

Davy Powergas, Inc. 
P. 0. Drawer 5000 
Lakeland, Florida 33808 
(813) 646-7100 

Dravo Corp., Chemical Plants Division 
One Oliver Plaza 
Pittsburgh, Pa. 15222 
(412) 566-3000 

Dravo Corp., Engineering Const. Div. 
One Oliver Plaza 
Pittsburgh, Pa. 15222 
(412) 566-3000 

Ebasco Services Incorporated 
2 Rector Street 
New York, New York 10006 
(212) 785-2200 

Fluor Engineers & Constructors, Inc. 
2500 S. Atlantic Blvd. 
Los Angeles, Calif. 90022 



Foster Wheeler Energy Corporation 
110 S. Orange Avenue 
Livingston, New Jersey 07039 
(201) 533-1100 

Jacobs Constuctors, Inc. 
837 S. Fair Oaks Avenue 
Pasadena, Calif. 91105 
(213) 681-3781 

Kaiser Engineers 
300 Lakeside Drive 
Oakland, Calif. 94604 
(415) 271-2211 

Koppers Co., Inc. 

Engineering & Construction Division 

Koppers Building 

Pittsburgh, Pa. 15219 

(412) 391-3300 



C. E. Lummus Company 
1515 Broad Street 
Bloomfield, New Jersey 
(201) 893-1515 



07003 



Arthur G. McKee & Company 
6200 Oak Tree Blvd. 
Independence, Ohio 44131 
(216) 524-9300 

The Ralph M. Parsons Company 
100 West Walnut Street 
Pasadena, Calif. 91124 
(213) 440-2000 

J.F. Pritchard and Company 
4625 Roanoke Parkway 
Kansas City, Missouri 64112 
(816) 53.1-9500 

Pullman Kellogg Co. 
Division of Pullman, Inc. 
1300 Three Greenway Plaza E. 
Houston, Texas 77046 
(713) 626-5600 



Research-Cottrell , Inc. 
Box 750 

Bound Brook, New Jersey 
(201) 885-7000 



08805 



Sam Wallace Industrial Constructors, Inc. 
2102 Empire Central 
Dallas, Texas 75235 
(214) 357-4561 

Sanderson & Porter, Inc. 
25 Broadway 

New York,. New York 10004 
(212) 344-5550 

Starrett Housing International, Inc. 

909 Third Avenue 

New York, New York 10022 



YOUR COMPANY, INC. 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 



(THIS IS A SAMPLE OF A LETTER THAT COULD BE SENT TO A DESIGNER/BUILDER) 



ABC Construction Corporation 
Main Street 
Hometown, USA 

Attention: Vice President, Purchasing 
Gentlemen: 

As manufacturers of a complete line of ,chlorinators, heaters, pumps, and 
rotometers, the YCI Company would like to be considered as an approved 
supplier by your company. We offer a complete line of heating and metering 
systemsfor solids to solids, solids to liquids, and liquids to liquids 
proportioning. Our equipment is presently operating in several chemical 
processing plants in the United States, including (name them). We have 
sold our equipment to other design/construction firms, including (name them). 

Enclosed is a complete sales catalog describing our equipment. We have also 
included our current price list. We believe we are competitive with products 
offered by other manufacturers of heating and metering systems. 

Our manufacturing facilities consist of a 50,000 square foot plant. We 

employ 100, and our current annual production is 350 units. Total sales of 

YCI Company are now $1 million. Our shop is unionized with the AFL-CIO 

Chemical Workers Union. We have not experienced any strikes or other work 
stoppages for the past 5 years. 

We would be delighted to have one of your executives visit us personally to 
check on our manufacturing facilities. Don't hesitate to telephone if we 
can provide you further details. 



THESE PREFAB HOME BUILDERS ARE INTERESTED IN OVERSEAS MARKETS' 



ACORN STRUCTURES, INC. 

Box 250 

Concord, Massachusetts 01742 

Telephone: (617) 369-4111 



L.C. ANDREW, INC. 

28 Depot Street 

South Windham, Maine 04082 

Telephone: (207) 892-6731 



ATLAS HOMES CORPORATION 

P.O. Box 1550 

North End Station 

Wilkes-Barre, Pennsylvania 18705 

Telephone: (717) 829-1911 



BOISE CASCADE CORPORATION 
MANUFACTURED HOUSING 
61 Perimeter Park 
Atlanta, Georgia 30341 

Telephone: (404) 455-6161 



COMPONENT HOMES, INC. 
817 South Capitol Street 
Iowa City, Iowa 52240 

Telephone: (319) 338-5448 



COMPONENTS, INC. 

4400 Homerlee Avenue 

East Chicago, Indiana 46312 

Telephone: (219) 397-3950 



CONTINENTAL HOMES, INC. 
P.O. Box 13106 
Roanoke, Virginia 24031 

Teleohone: (703) 334-5000 



FABRICON CORPORATION 
1780 Rohrerstown Road 
Lancaster, Pennsylvania 17601 

Telephone: (717) 569-6471 



IVON R. FORD, INC. 

McDonough, 

New York 13801 

Telephone: (607) 647-5221 



HARVEST HOMES 

1 Cole Road 

Delanson, New York 12053 

Telephone: (518) 895-2341 



HERITAGE HOMES, INC. 

Southampton Road 

Westfield, Massachusetts 01085 

Telephone: (413) 568-8614 



NEW ENGLAND HOMES, INC. 

Box 464 

Portsmouth, New Hampshire 03801 

Telephone: (603) 436-8830 



PERRY BUILDING SYSTEMS, INC. 

260 Port Road 

Riviera Beach, Florida 33404 

Telephone: (305) 844-4388 



POLORON HOMES OF PENNSYLVANIA, INC, 

74 Ridge Road 

Middleburg, Pennsylvania 17842 

Telephone: (717) 837-0051 



UNION HOMES 

Division of Berry Builder Mart 

P.O. Box 744 

Union, South Carolina 29379 

Telephone: (803) 427-5691 



WESTON HOMES, INC. 

P.O. Box 126 

Rothschild, Wisconsin 54471 

Telephone: (715) 350-4281 



BENDIX HOME SYSTEMS, INC. 
61 Perimeter Park 
Atlanta, Georgia 30341 

Telephone: (404) 458-9421 



GENERAL ELECTRIC COMPANY 
3198 Chestnut Street 
Philadelphia, Pennsylvania 19101 

Telephone: (412) 823-4822 



REED SUPPLY COMPANY 
1100 National Highway 
Thomasville, North Carolina 27306 

Telephone: (919) 475-2171 

SCHOLZ HOMES, INC. 
3103 Executive Parkway 
Toledo, Ohio 43606 

Telephone: (419) 531-1601 

TANDY INDUSTRIES, INC. 
P.O. Drawer 3188 
Tulsa, Oklahoma 74101 

Telephone: (918) 585-5611 



CHAPTER V 

SELLING TO THE U.S.- MILITARY (AND THEIR DEPENDENTS) 

STATIONED ABROAD 



This chapter will be helpful to manufacturers and distributors of consumer products. 



IT'S A BIG BUSINESS. The U.S. Department of 
Defense (DOD) runs the world's largest retail opera- 
tion. Each year its military and civilian personnel, 
plus their dependents, purchase $6 billion worth of 
consumer goods in military post exchanges (PX's) 
and Commissaries (military supermarkets). And 
overseas, the 500,000 DOD personnel and their 
350,000 dependents currently stationed outside the 
U.S. acco.unt for a quarter of these goods $1.7 
billion, most of it U.S. -made. The box on page 34 
identifies the annual sales overseas in PX's and Com- 
missaries for each branch of the service. DOD calls 
this the military resale market. And as in most seg- 
ments of the U.S.-for-export market, suppliers don't 
have to be export experts. Suppliers usually ship their 
wares to military warehouses located in the U.S. and 
the DOD pays by check. 

In addition to the overseas PX's and Commis- 
saries, the military resale market abroad also includes 
officers and enlisted men's clubs. At many larger in- 
stallations abroad, military personnel have organized 
audio and/or photography clubs which often 
purchase equipment for sale to their members. 

The range of products needed for the military 
resale market is extensive. Almost all consumer 
products found in U.S. drug stores, supermarkets, or 
discount houses will be sold in Commissaries and 
PX's abroad. The box on page 24 gives a partial 
listing of the major product categories, and how 
much was sold abroad. 

Even though orders are placed centrally, the in- 
dividual facilities look for a certain amount of 
merchandising support from selected suppliers. The 
box on page 24 lists the headquarters for each of the 



THE MILITARY RESALE MARKET 

ABROAD A LARGE MARKET FOR 

CONSUMER GOODS 

PX's and Commissaries abroad sell over one 
billion dollars worth of consumer goods annually. 
Listed is the breakdown for each service. 



Sales by PX's 

Army/Air Force' 

Navy 

Marine Corps 

Coast Guard 

TOTAL 



Sales in Commissaries 

Army 

Navy 

Air Force 

Marine Corps 

Coast Guard 

TOTAL 



Millions of$ 

$1,964 

320 

28 

5 

$2,317 



$201 

60 

136 

8 

1 

$406 



'Note: The Army and Air Force maintain a joint PX 
system abroad. 

Source: Exchange and Commissary News. 

abroad. The PX manager chooses the merchandise 
and orders are placed through central headquarters 
maintained by the Navy, the Marine Corps, the 
Coast Guard, and jointly by the Army and the Air 
Force. 



Annual sales of selected product categories in the Army/Air Force PX system and the Navy PX system 

abroad are large. 



Sales To Army and Air Force PX's Abroad 

(July 1, 1974 to June 30, 1975) 
Consumer Product category 



Sundries (small misc. items). 

Civilian Clothing 

Candy, Beverages 

Housewares 

Drug Store Items 

Tobacco 

Jewelry 



Sales, in 
Millions of$ 

$170 

139 

119 

99 

50 

46 

31 



Sales of Selected Products in Navy PX's Abroad 

(July 1, 1973 to June 30, 1974) 

Sales, 
Millions o^ 

Household Appliances, Accessories $! 

Civilian Clothing : 

Photo Equipment 

Jewelry 

Sporting Goods 

Toys 

Household Supplies 

Source: Exchange and Commissary News. 

NOTE: Ethnic products are popular in the PX and Cot 
missary system, both in the U.S. and abroad. 



HEADQUARTERS FOR THE PX AND THE COMMISSARY SYSTEM 

Each branch of the military operates its own system for both PX's and Commissaries. Listed below are t 
locations of the headquarters. 



Headquarters for the PX system 



Army & Air Force Exchange Service 
Red Bird Plaza 
Dallas, Texas 75222 
Phone:(214)330-3721 

Marine Corps Exchange Service Division 

Headquarters, U.S. Marine Corps 

Bldg.No.3074, 

MCB Quantico, Va. 22134 

Phone:(703)640-2917 



Navy Resale System Office 
Third Avenue & 29th Street 
P.O. Box Drawer 12 
Brooklyn, N.Y. 11232 
Phone:(212)965-5000 

Navy Resale System Office, West Coast 
Building 310 Naval Supply Center 
Oakland, California 94625 
Phone:(415)466-5733 



Headquarters for the Commissary System 



Army Commissary Stores 

Commissary Branch Troop Support Division 

Department of the Army (DALO-SMT-C) ' 

Room 1E-573A The Pentagon 

Washington, D.C. 20310 

Phone: (202) OX 5-9001, OX 7-4322 

Navy Commissary Stores 
Navy Resale System Store 
Third Avenue & 29th Street 
Brooklyn, N.Y. 11232 
Phone:(212)965-5000 

Marine Corps Commissary Stores 
Commissary Store Branch (Code LFS-1) 
Headquarters, U.S. Marine Corps 
Washington, D.C. 20380 



Air Force Commissary Stores 
Director of Supply & Serv~ices 
Personnel Support Branch 
Department of the Air Force 
Washington, D.C. 20330 
Phone: (202) 697-5672 or 7446 



Coast Guard Commissary Stores 

Resale Programs Branch Headquarters 

U.S. Coast Guard 

Room 7124 

400 Seventh Street, S.W. 

Washington, D.C. 20590 

Phone: (202) 426-2094 



DOD OFFICES WHICH WILL HELP 
MINORITY-OWNED BUSINESSES DO BUSINESS WITH THE MILITARY 

The Department of Defense is trying to increase its business with minority-owned firms. To help minority- 
owned businesses sell to the military, the Department of Defense and the various service branches have es- 
tablished special offices to act as a liaison between the military and the minority-owned firm. 



ARMY 

Army Small Business Advisor 
Office of Assistant Secretary (I&L) 
Washington, D.C. 20310 
(202)0X7-8113 

For the Army/Air Force Exchange System: 

Department MR-M 

Army/Air Force Exchange System 

Dallas, Texas 75222 

(214)330-2120 



NA VY AND MARINE CORPS 

Special Assistant for Small Business 

and Economic Utilization 
Office of Assistant Secretary (I&S LOG) 
Washington, D.C. 20360 
(202)692-7122 



AIR FORCE 

Air Force Small Business Advisor 
Directorate for Procurement Policy 
Washington, D.C. 20330 
(202)697-4126 

'The Coast Guard is part of the Department of Transportation. 



DEPAR TMENT OF DEFENSE 

Directorate for Small Business and 

Economic Utilization Policy 
Office of Assistant Secretary (I&L) 
Washington, D.C. 20301 
(202)0X7-1481 



DEFENSE S UP PL Y A GENC Y 

Small Business and Economic Utilization 

Office 

Defense Supply Agency 
Cameron Station 
Alexandria, Va. 22314 
(202)274-6471 



COASTGUARD 1 

Office of Installations and Logistics 
Department of Transportation 
400 7th Street, S.W. 
Washington, D.C. 20590 
(202)426-4237 



qualified. Commissary managers abroad, however, 
are not always restricted to this list. In addition, the 
Army and Air Force maintain a Commissary item 
selection board to determine what merchandise will 
be sold. 

AN INTERESTING MARKET FOR MINORITY- 
OWNED SUPPLIERS. If you make a popular con- 
sumer item, the military resale market is a good one 
to explore. As a minority-owned firm, you may have 
a particular advantage. The U.S. government wants 



SUPPLIERS SELL DIRECTLY OR USE A 
MILITARY SALES REPRESENTATIVE. A com- 
pany can sell to the military resale market two ways. 
First, a company can assign its own personnel to 
market and sell; or secondly, it can use a military 
sales representative organization which specializes in 
selling to the military sales market. There are about 
300 "military reps." Some companies will use their 
own personnel in selling to U.S.-based PX's and 
Commissaries and a military sales "rep" for overseas 
sales even though orders are placed in the U.S. 



"military reps" in this chapter) may be a better ap- 
proach for a small firm. But for sales to foreign in- 
stallations, marketing experts strongly recommend a 
military rep. Even though shipments are made to 
U.S. warehouses, successful selling probably requires 
travel to individual installations as well as to regional 
exchange headquarters. For example, the joint Ar- 
my/Air Force Exchange System maintains regional 
headquarters in Honolulu and Munich. In addition 
to travel costs, there are the complex regulations per- 
taining to PX and Commissary sales. These may be 
difficult to master. 

MILITARY REPS KNOW HOW TO 
MARKET. Military rep organizations are staffed by 
merchandising and marketing experts. Many have 
foreign offices. The larger firms handle a full line of 
consumer goods: food, household goods, health and 
beauty aids, etc. Some military reps may specialize in 
selected consumer product categories. The larger 
firms have offices in Europe and the Far East, while 
smaller military reps may focus on certain geographic 
markets. The successful military rep can provide 
professional marketing and merchandising support. 
For example, one military rep mounts special in-store 
promotions tied into military themes, such as an Air 
Force 28th Birthday Sale, or a Bicentennial Sale. 
Most military reps are members of the American 
Logistics Association. The 15 largest military reps 
formed the Armed Forces Marketing Council. Both 
Associations are headquartered in Washington. Over 
170 military rep organizations are listed at the end of 
the chapter. 

HOW THEY WORK. Most military reps work on a 
commission basis. Thus, the manufacturer gets 
orders from the PX or Commissary system and pays 
a commission to the military rep after receiving pay- 
ment from the Government. The actual rate of com- 
mission may vary according to the product line, but 
generally is in line with the commission paid to a 
U.S.-based sales representative organization. Excep- 
tions do exist. The military reps may purchase some 
products, such as hi-fi components. For these and 
other products the military rep may actually 
warehouse abroad, and handle repair and service. 
Agreements between a military rep and suppliers 
usually are on a year-to-year basis, and may contain 
30-, 60-, or 90-day cancellation privileges. 

The aggressive military rep constantly tries to get 
new lines. Thus, you may be approached by one. 
They don't have the time or resources to do a 



1 . Who are your customers? In particular, what's the 
acceptance by the 18 to 25 year-old market since 
the military consists mainly of this age group. 

2. How reliable is your company as a supplier? 

3. What is your pricing structure? Since PX's and 
Commissaries are generally large volume 
purchasers, they look for maximum discounts. 

4. What merchandising and advertising support can 
you provide? 

5. Who are your competitors? 

6. Who do you sell to now? 

HOW YOU SHOULD EVALUATE THE 
MILITARY REP. Here are questions to raise with 
the military rep interested in your line. 

1. What product lines does he handle? You're look- 
ing for a firm that understands how to market 
your type of product. 

2. What companies does he represent? Check these 
companies to find out how satisfied they are. If 
your direct competition is represented, look for 
another rep. A rep which handles many companies 
may be unable to give you adequate attention. 

3. What countries does he cover? Some military reps 
specialize in Europe, others the Far East, and still 
others operate on a world-wide basis. It's not un- 
usual for some suppliers to use two or more reps 
to insure complete geographic coverage. 

4. How does he market? How many salesmen does 
the rep have; where are they located? Who will be 
personally responsible for your line of products 
within the military rep organization? What is his 
background in your type of product? How fre- 
quent are sales calls on individual installations, on 
oversease regional, in stateside headquarters? 
What merchandising support does the rep have for 
the PX and Commissary system? 

5. Who in the military is familiar with the rep 
organization? Ask for the names of key PX or 
Commissary purchasing people. Check them on 
the military rep's capability. 

6. What are commission rates? 

TIPS ON TAPPING THIS MARKET. We've listed 
some steps to consider if you're not yet reaching this 
important market segment. We assume you will be 
using a militarv sales reo organization. 



They're listed in the box on page 25. Several other 
sources may be helpful. Ther're identified in the 
box on the bottom of this page. 

2. Develop a list of military reps which appear to 
have the capability to sell your products. 

3. Contact the American Logistics Association and 
the Armed Forces Marketing Council. Inform 
them of your interest in contacting military reps 
who can handle your line abroad. Describe your 
lines, and indicate your experience, if any, in sell- 
ing to the military resale market stateside. 

4. Contact military sales reps. If you're writing them, 
describe your company, your products, in par- 
ticular who uses them, your customers, and your 
interest in selling to the military resale market 
abroad. 



5. Follow up with interested reps in a personal 
meeting. 

6. Develop your sales plan! 

TO SUM UP: IT'S A BIG POTENTIAL. Large 
volumes of consumer goods are demanded by U.S. 
military and their dependents stationed abroad. The 
military has a well-established network of PX's and 
Commissaries to serve those stationed abroad. Near- 
ly $1.7 billion worth of consumer goods are 
purchased, much of it U.S. -made goods and much of 
it purchased in the U.S. Many of the sales to foreign 
PX's and Commissaries are made by military reps. 
Firms marketing consumer goods may find these 
military reps a good channel to tap this important 
market. Again, little. or no "export expertise" is re- 
quired. 



SOURCES 



FOR INFORMATION ABOUT THE MILITARY 
RESALE MARKET 



1. Government Guides 

Two "How To Do Business" with the PX and 
Commissary system have been published. Vendor 
Facts is intended as a basic guide for the joint Ar- 
my/Air Force System. It lists all PX's abroad, items 
authorized for sale (at least in the U.S.), etc. 
Available from the Army and Air Force Exchange 
Service, Red Bird Plaza, Dallas, Texas 75222. 

A guide for Doing Business With the Navy Resale 
System serves as an introduction to the worldwide 
retailing operations of the Navy Resale System. 
Included: addresses of Navy Exchanges and Commis- 
saries located abroad, and information on becoming 
a supplier. Available from Navy Resale System, 3rd 
Avenue & 29th Street, Brooklyn, N.Y. 11232. The 
Marine Corps and Coast Guard do not have guides. 

2. Trade Publications. 

Those who sell to the military resale market, and 
important buying officials in the resale system, sub- 
scribe to either or both of the following bi-weekly 
publications: Exchange and Commissary News, P.O. 
Box 788, 211 Broadway, Lynbrook, N.Y. 11563 and 
Military Market, 475 School Street, S.W., 
Washington, D.C. 20024. Their editors are 
knowledgeable about the military resale market, in- 
cluding names of key procurement personnel. For ex- 



ample, Exchange and Commissary News annually 
publishes a worldwide roster of military commissary 
officers. 

3. Consumer magazines. 

Overseas Family claims to reach one-third of the 
families who patronize overseas PX's and Commis- 
saries. Also, some of the large U.S. women's 
magazines, such as Ladies Home Journal, have special 
editions which circulate just to military families 
abroad. The editorial department of these magazines 
can provide assistance. (And if your company sells to 
the Military Resale Market, you may want to con- 
sider advertising.) 

4. Trade Associations. 

The American Logistics Association (formerly 
called the Defense Supply Association), 1000 Con- 
necticut Avenue, N.W., Washington, D.C. 20036, is 
the major association with members from both 
military and industry. A directory of U.S. military 
resale outlets, listing names and addresses of their 
buyers, is published annually. Available at nominal 
cost from the association. The Armed Forces 
Marketing Council, 955 L'Enfant Plaza North, S.W., 
Washington, D.C. 20006, is an association of the 
larger military sales representatives. 



Military sales reps are sales organizations that 
specialize in selling to PX's and Commissaries. Ex- 
change and Commissary News has provided a listing 
of military reps. NOTE WELL: Not all handle sales 



to PX's and Commissaries abroad. Those organiza- 
tions that are members of the Armed Forces 
Marketing Council are asterisked. It's likely these 
military sales reps sell to military facilities abroad. 



OVERSEAS 



*Associated Brands, Int'l 
P. 0. Box 20513 
Causeway Bay, Hong Kong 

Siber Hegner & Co., Ltd. 
P. 0. Box 164 
Hong Kong 

Thai viet Sales Co. 
906 Sutherland House 
3 Charter Road 
Hong Kong 



Japan 

Frank Beach 
P. 0. Box 85 
Ginowan City 
Okinawa, Japan 901-22 

Western Pacific Corp. 
Central P. 0. Box 42 
Naha, Okinawa 

Fareast Service Co. 
P. 0. Box 14 
Urasoe, Okinawa 

Loyal Trading Int'l Ltd. 
507 Dragon Seed Blvd. 
39 queens Rd., Central 
Hong Kong 

Tradship (Japan) Ltd. 

Yoyogi 

P. 0. Box 38 

Tokyo, Japan 

Williams Int'l of Japan, Ltd. 
Central P. 0. Box 807 
Tokyo, Japan 

H.E. Winters & Associates 
P. 0. Box 278 
Yokohama, Japan 

Omni Int'l 

Port P.O. Box 90 

Yokohama, Japan 

Harold W. Hipp 

Hipko Associates (Far East) Ltd. 

Suite 411, Vila Parto 

109 Yamati-Machi 

Naka-Ku 

Yokohama 231 , Japan 



Taiwan 

Phil Hoerr, Jr. 

P. 0. Box 28-51 Shihlin 



*Webco, S.A. (England) Ltd. 
17C Curzon Street 
London W1Y 7FE England 



Comex Service Corp. 
7 Franz-Lenbackstrasse 6 
Frankfurt/Main S. 10 
Germany 

Tasco Marketing International 
Wolfsgangstrasse 132 
600 Frankfurt/Main 
Germany 

*Trans-European Marketing 
25 Feldbergstrasse 
6 Frankfurt/Main 
Germany 



Switzerland 

N.A.A.F.E.X.C.O. Freeport 

P. 0. Box 27 

6830 Chlasse 3, Switzerland 



North Africa 

Olivares Associates 
Postal Box 77 
Tangier, Morocco 



United States 
Al abama 

Redmond Brokerage Co., Inc. 

Box 7503 

Mobile, Alabama 36607 

Relco, Inc. 
P. 0. Box 1 
Gall ion, Alabama 36742 ' 



California 

Admiral Exchange Co., Inc. 

1443 Union Street 

San Diego, Calif. 92101 

Allied International 

149 California Street 

San Francisco, Calif. 94111 

American Food Brokers 
Thor E. Smith Dist. Co. 
P. 0. Box 778 
Palo Alto, Calif. 94302 



Allan Berkell 

1504 South Cardiff Avenue 

Los Angeles, Calif. 90036 

Frank B. Carr, Inc. 
P. 0. Box 5525 
Fullerton, Calif. 92632 

Merrill Cichy Assoc. 
P. 0. Box 162 
2464 San Carlos Avenue 
San Carlos, Calif. 94070 

Dixon Marketing West, Inc. 

1485 Bayshore Blvd. 

San Francisco, Calif. 94124 

Exchange Distributors, Inc. 
633 W. Market Street 
San Diego, Calif. 92101 

F. L. Foley Co. 

1245 Centre Avenue 

San Pedro, Calif. 94901 

Martin Frankel 
1385 Lasuen Drive 
Millrae, Calif. 94030 

E. R. Fredericks 

1520 State Street 

San Diego, Calif. 92101 

Ed Graham Co. 

367 W. Seventh Street 

San Pedro, Calif. 90731 



The Hosford Co. 
P. 0. Box 570 
Lafayette, Calif. 



94549 



Alan Jensen Sales, Corp. 

725 Second Street 

San Francisco, Calif. 94107 

Sid Justice Co. 

1485 Bayshore Blvd. 

San Francisco, Calif. 94124 

John K. Kealy Co. 
455 S. Westmoreland 
Dallas, Texas 75237 

Kennedy Sales Co., Inc. 

135 South Park 

San Francisco, Calif. 94107 

Lester D. Laws on 

100 E. Ocean 

Long Beach, Calif. 90802 

Liberty Marketing Int'l 

1485 Bayshore Blvd. 

San Francisco, Calif. 94124 

Military Marketing Service, Inc. 
3303 Harbor Blvd., Bldg. J-l 



Barbara Moore 

2700 Via Montecito 

San Clemente, Calif. 92672 

Phoenix Sales Co. 

36 Dominican Drive 

San Rafael, Calif. 94901 

Julius Rothschild Co. 
1000 43d Street 
Oakland, Calif. 94608 

E. B. Schwinger & Co. 

22 California Street 

San Francisco, Calif. 94111 



Steinau-Glaser Co. 
25 Division Street 
San Francisco, Calif. 



94103 



Thomson Sales Co. 

P. 0. Box 187 

San Leandro, California 94577 

United Sales Associates, Inc. 
2050 Pioneer Ct. , Box 943 
San Mateo, Calif. 94403 

West-Pac Associates 
P. 0. Box 583 
Millbrae, Calif. 94030 

V. A. Wickberg & Associates 
8636 Fireside Avenue 
San Diego, Calif. 92123 

Tom Williamson Associates 
P. 0. Box 766 
Danville, Calif. 94526 

Worldwide Sales 

526 North Hi 11 crest Road 

Beverly Hills, Calif. 90210 



Colorado 

Glenn Tuthill Sales Co., Inc. 
P. 0. Box 20042 
1444 Oneida Street 
Denver, Colorado 80220 



Connecticut 

George E. Abbott Co. 
W. Main Street 
Chester, Conn. 06412 

* Dunham & Smith Agencies, Inc. 
39 Newis Street 
Greenwich, Conn. 06830 

* Eurpac Sales 
170 Mason Street 
Greenwich, Conn. 06830 



Gemsco, Inc. 
P. 0. Box 532 
Mil ford, Conn. 



06460 



General Int'l Sales 

5 Clark Street 

Old Greenwich, Conn. 



Global Military Sales 

P. 0. Box 31 

Atlantic Beach, Florida 32233 

*Wilson Harrell & Co., Inc. 
4161 Carmichael Avenue 
Jacksonville, Florida 32207 

Neuweiler Sales Co. 
8340 N.E. Second Avenue 
Miami, Florida 33138 

Overseas Service Corp. 

P. 0. Box 3306 

West Palm Beach, Florida 33402 

Sherer Associates 
8446 N.W. 26th Drive 
Forest Hills South 
Coral Springs, Fla. 33065 

Budd Steele Co. 

P. 0. Box 63 

2985 Mayport Road 

Atlantic Beach, Fla. 32233 



Vantage Sales Co. 
P.O. Box 50428 
Jacksonville, Fla. 



Hawai i 



32250 



Pacific Enterprises Importer- 
Distributor 
429 Waiakomilo Road 
Honolulu, Hawaii 98617 



Illinois 

Donald Bruce & Co. 
3600 N. Talman Avenue 
Chicago, 111. 60618 

Medicated Products Co. 
3600 N. Talman Avenue 
Chicago, 111. 60618 



Louisiana 



Terry Doub 

704 Orleans Street 

Bogalusa, Louisiana 



70427 



David J. Kleinbart 
11700 Old Columbia Pike 
Silver Spring, Md. 20904 



Massachusetts 



06830 



Amherst Sales Corp. 
110 Pleasant Street 
Maiden, Mass. 02148 

J.E. Bartlett & Co. 
52 Teed Drive 
Randolph, Mass. 02368 

Elco International Corp. 



Seaboard Sales Corp. 
One Mark Avenue 
Webster, Mass. 01570 

World Service Corp. 
P. 0. Box 469 
Quincy, Mass. 02169 

David Zieff & Associates 
21 Cummings Park, Suite K 
Woburn, Mass. 01801 



Missouri 

Sterling Co. 

417 Delaware Street 

Kansas City, Missouri 64105 



New Jersey 

C. P. Mahoney & Co. 

Medford Lakes, New Jersey 08055 

Sarvis Associates, Inc. 
16 Glenwood Road 
Englewood, New Jersey 07631 



New Hampshire 

Emco, Inc. 

P. 0. Box 189 

Hampton, New Hampshire 03842 



New York 

Allpac Sales Co. 
301 East 47th Street 
New York, N.Y. 10017 

Alpha International 
56 Harrison Street 
New Roche! le, N.Y. 10801 

Atlas Sales Agency 

25 W. 42nd Street, Suite 823 

New York, N.Y. 10036 

Beta-Royal 

655 Main Street 

Westbury, N.Y. 11590 

Bluebell International 

c/o Otam Int'l 

370 Lexington Avenue 

Suite 3416 

New York, N.Y. 10018 

W.J. Bodnar Sales 
P. 0. Box 589 
Ossining, N.Y. 10562 

Chalres Brady, Inc. 
250 West 57th Street 
New York, N.Y. 10019 

Diversified Marketing Int'l 
53 E. 184th Street 
Bronx, N.Y. 10468 

Dunrite Products, Inc. 
45 East 20th Street 



Suite 142 

Dallas, Texas 75237 

Harry Granitz & Co. 
37 Herman Court 
Plainview, N.Y. 11803 

Fred M. Grunfeld 
70-20 - 108th Street 
Forest Hills, N.Y. 11375 

Leonard Haimes Co., Inc. 

35 Mercer Street 

New York, N.Y. 10013 

Harrich Associates, Inc. 
321 Willis Avenue 
Mineola, N.Y. 11501 

P.M. Jannell , Inc. 

130 Fifth Avenue 

New York, N.Y. 10010 

Ray Kasendorf 
3 Clinton Lane 
Oericho, N.Y. 11753 



Mennon Sales Co. 
5 Field End Lane 
Eastchester, N.Y. 



10709 



Nason Trading Co., Inc. 
230 Fifth Avenue 
New York, N.Y. 10001 

Robbins & Co. 
401 Broadway 
New York, N.Y. 10013 

Julius Rothschild Co. 
292 Broadway 
Lynbrook, N.Y. 11563 

S. Schwartz Military Sales Co'. 
29 East 61st Street 
New York, N.Y. 10021 

Francois L. Schwarz 

550 Fifth Avenue 

New York, N.Y. 10036 

Security Brokers, Inc. 

P. 0. Box 534, Riverdale Station 

New York, N.Y. 10071 

Titan United Corp. 

25 W. 43rd Street, Suite 823 

New York, N.Y. 10036 

Universal Commodity Brokers, Inc. 
91 North Franklin Street 
Hempstead, N.Y. 11550 

Varsity Marketing Int'l 
2348 Walton Avenue 
Bronx, N.Y. 10468 

*Webco, S.A. 
353 Lexington Avenue 
New York, N.Y. 10016 



Neil Eddinger 
P. 0. Box 354 
Spencer, N.C. 28159 



Pennsylvania 

Martin A. Taylor Co., Inc. 
1015 Chestnut Street 
Philadelphia, Pa. 19107 

Trans-International Corp. 
1777 Walton Road, Suite 200 
Blue Bell, Pa. 19422 

*Trinity Marketing Corp. 
Box 511 
Valley Forge, Pa. 19481 



Rhode Island 



Bazar Inc. Sales Co. 
655 Warren Avenue 
East Providence, R.I. 



02914 



Sales Specialties, Inc. 

140 Dover Avenue 

East Providence, R.I. 02914 



Texas 

Advance Sales & Service Co. 
Dallas Apparel Mart 
Room 3183 
Dallas, Texas 75247 

A.E. Fogelberg Sales 
205 Fredericksburg Road 
San Antonio, Texas 78201 

Military Sales & Service Co. 
5301 S. Westmoreland Road 
Suite 106 
Dalls, Texas 75237 

National Military Sales Co. 
1165 Empire Central Plaza 
Suite 234 
Dallas, Texas 75247 

Southwest Military Sales 
203 Fredericksburg Road 
San Antonia, Texas 78201 

Tex-Mil, Inc. 

851 South R.L. Thornton 

Suite 102 

Dallas, Texas 75203 

L.G. Tippie & Co. 

P. 0. Box 17408 

San Antonio, Texas 78217 



Alexandria, Va. 22304 

Com-X, Inc. 

2708 South Nelson Street 

Arlington, Va. 22206 

*Conus, Inc. 

9402 Prince William Street 
Manassa, Va. 22110 

Defense Marketing Corp. 

P. 0. Box 2396 

Virginia Beach, Va. 23452 

Desco, Inc. 

819 W. Little Creek Road 

Norfolk, Va. 23505 

*C. Lloyd Johnson Co. 
8031 Hampton Blvd. 
Norfolk, Va. 23505 

Mohawk Marketing Corp. 
4984 Holland Road 
Virginia Beach, Va. 23462 

V. H. Monetta & Co. 
Smithfield 
Virginia 23430 

N.A.A.F.E.X.C.O. 
America Corp. 
1600 E. Little Creek Road 
Norfolk, Va. 23518 

Norfolk Distributing Co. 

P. 0. Box 2396 

Virginia Beach, Va. 23452 

Old Dominion Tobacco Co., Inc 
5400 Virginia Beach Blvd. 
P. 0. Box 12420 
Norfolk, Va. 23462 

Court Oxl ey Co. 

6911 Mt. Daniel Drive 

Falls Church, Va. 22046 



Ry Con Sales, Inc. 
3812 Shadow Lane 
Virginia Beach, Va. 



23452 



Jerry Wills 

323 Blaze Avenue 

San Antonio, Texas 



78218 



Dino Tamarri 

14835 Wood Home Road 

Centreville, Va. 22020 

United Marketing 
1552 Norvlew Avenue 
Norfolk, Va. 23513 

United States Sales Corp. 

P. 0. Box 2395 

Virginia Beach, Va. 23541 



Washington 

Harry A. Kessler 
Terminal Sales Bldg. 
Seattle, Washington 98101 



North Carolina 

All American Sales, Inc. 
P. 0. Box 3952 
Fayetteville, N.C. 28305 



H.B. Atkinson 
Wheeler Avenue 
Alexandria, Va. 22304 



Wisconsin 

Swan Sales Corp. 

6223 W. Forest Home Avenue 



CHAPTER VI 

A BILLION DOLLAR MARKET SELLING TO THE U.S. BUYING 
OFFICES OF FOREIGN TRADING COMPANIES 

This chapter will be useful to suppliers of virtually any type of 
commodity, raw material, or manufactured goods. 



ANOTHER HUGE U.S.-FOR-EXPORT 
SEGMENT. About 15 foreign trading companies, 
mainly Japanese, have their own U.S. offices to 
purchase goods and services for their home offices, 
their foreign affiliates, and their foreign customers. In 
1975, these trading company offices bought more 
than $4 billion worth of U.S. goods. The U.S. offices 
of Japanese trading companies probably account for 
at least one of every four export shipments to Japan,' 
the second most important market for U.S. exported 
goods (the first is Canada). The best known foreign 
trading companies are Japanese, but there are British, 
Dutch, Danish, Swiss, and French trading companies 
also. 

WHAT IS A TRADING COMPANY? A firm that 
both exports and imports is known as a trading com- 
pany. The most sophisticated also manufacture, ship, 
and finance on a worldwide basis. For example, Mit- 
sui, one of the largest Japanese trading companies, 
has operations in 77 countries and has established 
170 joint venture arrangements with U.S. manufac- 
turers throughout the world. United Africa Com- 
pany, headquartered in Liverpool, England, operates 
modern department stores and large factories in 
Africa as well as large distribution firms. Trading 
companies frequently begin dealing in basic com- 
modities and other raw materials: cotton, coal, food- 
stuffs, etc., but they generally develop a capability to 
handle virtually any kind of goods. The box on page 
32 lists most of the foreign trading companies with 
offices in the United States. 

HOW MITSUI DOES IT. Illustrative of the tremen- 
dous scope of the Japanese trading company is a run- 



down on the U.S. affiliate of Mitsui (Mitsui and 
Company (U.S.A.), Inc.). The New York head- 
quarters and branch offices in ten other U.S. cities 
annually purchase close to $2 billion of U.S. com- 
modities, raw materials, and manufactured goods for 
export not only to Mitsui Japan but to their opera- 
tions in other countries. Mitsui has established 22 
trading departments, each specializing in purchasing 
a specific category of goods: steel, coal, nonferrous 
metals, departments for large machinery, electrical 
machinery, industrial machinery, transportation 
machinery, chemical machinery, heavy machinery, 
etc. Buying departments are also established for: 
chemicals, plastics, fertilizers, and petroleum 
products. A produce department handles wheat, feed 
grains, soybeans, oils and fats, livestock, and meat. A 
provisions department buys oranges, lemons, and 
grapefruits. The textile department buys natural and 
synthetic fibers, yarns, fabrics, knitwear, and the 
general merchandise department handles such 
products as bowling equipment, golf clubs, pleasure 
boats, medical equipment, etc. 

The Mitsui Technical Development Center seeks 
additional business opportunities, such as those con- 
nected with pollution control, underseas mining, and 
oil extraction. 

In addition to purchasing on an order-to-order 
basis, Mitsui is active in seeking out product lines to 
sell or distribute, not only in Japan, but throughout 
the world. Here's a quote from a Mitsui advertise- 
ment directed at U.S. manufacturers with little or no 
export experience: 

"Have you considered expanding into the world 
market? And backed off because there were just too 



THESE COMPANIES BUR OVER A BILLION DOLLARS OF U.S. GOODS 

The U.S. branch offices of trading companies purchase huge amounts of U.S. goods for export to their 
parent companies and other foreign customers. 



Asahi Bussan Co., Ltd. 
16 West 22nd Street 
New York, N.Y. 10010 

East Asiatic Co., Inc. 

110 Wall Street 

New York, N. Y. 10005 

C. Itoh & Co. (American) 
270 Park Avenue 
New York, N.Y. 10017 

Kanematsu-Gosho (U.S.A.) Inc. 
World Trade Center 
New York, N. Y. 10048 



Marubeni Corporation 
200 Park Avenue 
New York, N.Y. 10017 

Mitsubishi International Corp. 
277 Park Avenue 
New York, N.Y. 10017 

Mitsui & Co. (U.S.A.) Inc. 
200 Park Avenue 
New York, N.Y. 10017 



Nichimen Co., Inc. 

11 85 6th Avenue 

New York, N.Y. 10036 

Nissho-Iwai American Corporation 

80 Pine Street 

New York, N.Y. 10005 

Sumitomo Shoji America, Inc. 
345 Park Avenue 
New York, N.Y. 10017 



"Mitsui (U.S.A.) exported nearly $2 billion of 
American products in 1974. We'd like to talk to you 
about helping us add to that total. . ." 

HOW THEY PURCHASE. Foreign trading com- 
panies are sophisticated purchasers. Most establish 
elaborate specifications, and seek out potential sup- 
pliers. Their own vendor files are extensive. They 
maintain extensive reference material about potential 
vendors. One Japanese trading firm maintains a sup- 
plier reference room containing all the standard U.S. 
product directories, plus subscriptions to over 100 
business publications covering 50 fields. 

They rarely buy in haste, particularly from a new 
supplier. In fact, potential suppliers might get 
frustrated at the detailed procedures followed, in par- 
ticular, by the Japanese trading companies, which 
often include repeated checks with executives in the 
trading company's headquarters offices. 

However, once you receive an order, you won't 
have to worry about export details. The trading com- 
panies are professionals. Most likely, you'll be asked 
to ship to a U.S. location, and invoice the U.S. office 
so payment will be consistent with your normal 
terms. 

TIPS ON TAPPING THIS SEGMENT. Since the 
foreign trading companies actively seek .U.S. sup- 
pliers, make sure you're listed in appropriate 
purchasing directories. (See chapter XIII for a dis- 
cussion about listing.) But it's such a large market 
segment, and there are so few trading companies, 



1 . From time to time, the trading company may want 
to buy goods similar to yours. 

2. The trading company's home office may be in- 
terested in representing your company in one or 
more foreign countries. 

Here are some suggestions to reach this large 
market potential. 

1. Write the trading companies with U.S. offices. 
(The box above identifies the names and addtesses 
of those trading companies.) If you don't have the 
specific department, send it to the president's 
attention. It will most likely be routed quickly to 
the proper department. 

In this letter, indicate your interest in determining 
their requirements for your product and, if ap- 
propriate, your interest in the company 
representing you in Japan and possibly other 
foreign markets. Describe your products fully. Be 
sure to include catalogs and other materials. Iden- 
tify your leading U.S. customers. (See the box on 
page 33 for a sample letter.) 

2. Followup with those trading companies who have 
shown interest in your products. 

3. Develop your sales plan! 

TO SUM UP: IT'S A HUGE MARKET! With little 
effort, you can insure that these companies know 



YOUR COMPANY, INC. 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 



(SAMPLE LETTER TO TRADING COMPANY EXPLAINING YOUR PRODUCTS) 



ABC Trading Company 
1234 Madison Avenue 
New York, New York 10018 

Gentlemen: 

The YCI Company markets a line of asphalt additives. These additives extend 
the life of asphalt surfaces such as highways and parking lots, and we feel 
they have applications in foreign markets. Our major customers include high- 
way contractors such as the XYZ Company, and State highway agencies. The 
attached catalogs and specification sheets give detailed information about our 
products. 

We are writing to find out: 

1. Whether your trading company has a requirement to purchase similar 
products for your affiliates in Japan and elsewhere, and 

2. If your trading company would be interested in representing our 
firm in Japan, and possibly other foreign markets for our line 
of asphalt additives. 

The XYZ Company, founded in 1973, has sales of $1.3 million. Further details 
are given in the attached brochure outlining our capabilities. 

Don't hesitate to telephone if you need further details. We look forward to 
meeting with representatives of the ABC Trading Company about our asphalt 
additives. 

Sincerely, 

Nelson T. Joyner, Jr. 



CHAPTER VII 



SELLING TO THE EXPORT MERCHANT OR JOBBER 



This chapter will be useful to suppliers of virtually all commodities, raw 
materials, or manufactured goods. 



U.S. -BASED EXPORT MIDDLEMEN. No 
equivalent exists in the United States to the huge 
foreign trading companies described in the previous 
chapter. But we do have another type of trading firm: 
export merchants, or as they are sometimes called, 
export jobbers. These U.S.-based "export mid- 
dlemen" purchase goods in the United States for ex- 
port to their foreign customers or potential 
customers. These firms often have close relationships 
with foreign firms in a few countries who need U.S.- 
made products. Others function much like general 
wholesalers, and still others seek out "leads" from 
foreign firms who want to buy specific types of 
products. But many of the small ones specialize in 
selling to the "drop in" trade foreign buyers who 
are in the United States. 

An estimated 5,000 export merchants are active, 
mostly located in and around port cities. Some are 
well financed. Others are marginal and struggle to 
stay in business. Export merchants are not easy to 
locate, but most utilize extensive supplier directories 
and actively seek out specific manufacturers and/or 
distributors. 



\N EXPORT MERCHANT: WHAT'S HE 
JKE? Here are some characteristics that are typical 
if export merchants. 

. Export merchants come in all shapes, 
a. Some may sell only to customers in foreign 
markets. Some specialize in sales to a limited 
number of countries in a particular region, such 
as South America or the Middle East. Some 
may specialize in selling to only one country, 
such as Mexico or Nigeria. Successful ones 
often have a close personal relationship, either 
through family or business ties, with their 
customers in these foreign markets. 



wholesaler, does a thriving export busine: 
They offer foreign customers a wide produ 
selection and excellent service. 

c. Others actively seek out leads from foreij 
firms throughout the world who publicize th< 
interest in purchasing specific merchandis 
The export merchant then locates a suppli 
and submits a proposal to the foreign firm. 

2. Export merchants rarely deal in exclusivity, bu 
ing where they can get the best price and deliver 
Some, though, do establish exclusive "arrang 
ments" with manufacturers to promote th( 
products in one or more foreign markets. In tr 
case, they are similar to Export Manageme 
Companies which are described in detail in PAP 
III. 

3. Export merchants most often deal directly wi 
manufacturers. But if the latter won't sell to thei 
they go to the firm's wholesaler. 

4. Many specialize in used merchandise: constri 
tion machinery, machine tools, second-hand ca 
or used clothing, for which a big foreign marl 
exists, particularly in developing countries. 

5. Export merchants usually handle a wide range 
products within a certain field. 

6. Most merchants do little or no foreign trav 
Thus, much of their business is conducted by mi 
telephone, or telegram. 

If you receive an inquiry from an export mercha 
chances are your competitors have also had the sai 
inquiry. So remember this if you choose to respoi 
Many export merchants won't tell you the name 
the ultimate customer, and some won't even indie; 
the country. Export merchants usually purchase a 



THERE ARE ADVANTAGES IN 
DEALING WITH EXPORT MERCHANTS 



HOW TO FIND EXPORT MERCHANTS 



1. If you receive an export order, you won't have to 
worry about foreign shipment. Most likely you'll 
be asked to deliver to a U.S. location. 

2. Payment terms will likely be similar to your nor- 
mal terms. Note: since some merchants have 
limited financial capability, it's wise to check trade 
and financial references carefully. 

3. An export merchant might be an excellent outlet 
for discontinued lines and obsolete inventory, 
which you do not want (or aren't able) to sell in 
the U.S. market. Sources to help you locate a 
potential export merchant are listed in the box on 
page 56. If a merchant is interested in your "un- 
salable" inventory, he will ask for a sizable dis- 
count. 



THERE ARE DISADVANTAGES, TOO. The ma- 
jor disadvantage in working through an export 
merchant: you have no control over the situation. 
Your reputation in foreign markets might be harmed 
by his unwise pricing and failure to service your 
product, etc. And if you are an exporter with sales 
agreements with foreign distributors, you will get 
complaints if your products suddenly appear in their 
country without their knowledge. 

TO SUM UP: There is little you will want to do with 
respect to this U.S.-for-export segment. Export 



1. American Register of Exporters and Importers 
lists firms, by product category, actively engaged in 
exporting. The listing, however, is not limited to just 
export merchants, but includes manufacturers as 
well. This directory is published by the American 
Register of Exporters and Importers Corporation, 90 
.W. Broadway, New York, New York 10007. 

2. The Yellow Pages telephone directories of key 
U.S. cities. For example, the Manhattan Yellow 
Pages lists over 1,000 firms, by broad product categ- 
ory, under the classification "Export." Most are 
export merchants. 

3. Export Management Firms. The U.S. 
Department of Commerce has. published a listing of 
some 600 export merchants, by type of product. Not 
all are export merchants. Some are Export 
Management Companies. (Described in PART III. 
For availability, check with the Department of Com- 
merce District Office nearest you.) 

merchants actively seek suppliers. Therefore, you 
may want to make sure you are listed in appropriate 
directories. Check their references if one does contact 
you. And if you want to sell obsolete or discontinued 
merchandise, an export merchant might be a channel 
for this. 



CHAPTER VIII 



SELLING TO FOREIGN GOVERNMENTS IN THE UNITED STATES 



This chapter is useful to suppliers of commodities, raw materials, and 
certain manufactured goods in particular, high technology products. 



FOREIGN GOVERNMENTS ARE BIG 
BUYERS. Every government is a big customer for 
goods and services. (In some African countries, the 
government is the biggest importer.) For example, 
Petroleos Mexicanos, a large oil company owned by 
the Mexican government, accounts for one-half of 
Mexico's gross national product. Its purchasing 
requirements are huge. While practically every 
country's government wants to buy from its own 
local companies, there is a tremendous demand for 
U.S. goods. Some are sold in the foreign country by a 
U.S. company's sales representative. 

However, some countries have established 
permanent offices in the United States to seek out 
and purchase U.S. goods. Others send missions from 
time to time to buy specific goods. Most permanent 
offices are located either in New York or 
Washington. For example, the U.S.S.R. purchases 
U.S. goods through Amtorg Trading Corporation, 
an agency of their government. The Israeli 
government has established a suply mission in New 
Yourk. And Korea has established procurement 
offices in Washington, New York, and San 
Francisco. A listing of over 200 U.S. buying offices of 
foreign governments is provided at the end of the 
chapter. 

WHAT FOREIGN GOVERNMENTS PUR- 
CHASE. What they buy depends upon individual 
government's needs. Industrialized nations such as 
the United Kingdom and the U.S.S.R. purchase 
high-technologyproducts. Example: instruments for 
nuclear power plants. Middle Eastern and Sourh 
American countries may buy armaments and com- 
munications equipment to strengthen the strategic 
capabilities of the country. Developing countries 
such as Pakistan often buy raw materials and fo- 
odstuffs. 



2. Buying offices place the order in the United States, 
take delivery in the United States, but pay from 
their foreign country. Some governments use a 
purchasing office such as the Afro-American 
Purchasing Center, described in the box on page 
37. 

3. Buying offices place orders for agencies of the 
foreign governments. In this case, the U.S. sup- 
plier might have to ship its products to the foreign 
location. 



A foreign government's degree of sophistication in 
locating U.S. suppliers varies. Some buying offices 
are quite adept; others rely heavily on U.S. suppliers 
approaching them. 

PAYMENT. Foreign governments sometimes are 
slow payers. Some developing nations have difficulty 
in obtaining sufficient foreign currencies (such as dol- 
lars) which frequently can delay or even postpone 
their decision to purchase U.S. goods. 

Some governments may pay with U.S. aid money. 
The U.S. Government has supported the economic 
development of most developing countries. The 
Agency for International Development (AID), an 
agency of the U.S. Government, administers pro- 
grams in these countries. The funds help underwrite 
the purchase of goods and services related to ap- 
proved economic development projects. Projects 
range from purchase of foodstuffs to purchase of 
equipment and supplies for hospitals, schools, etc. 
All plans for the purchase of goods and services 
which will be paid for through U.S. AID funds, 
however, are identified by the U.S. Government. 
They are listed in AID circulars, as well as in Com- 



TAPPING THIS MARKET SEGMENT. Opp- 
ortunities for U.S. suppliers are not as clearcutin this 
segment of the U.S.-for-export market. But the small 
number of foreign governments who have established 
buying offices in the United States makes it relatively 
easy to determine whether there's business. Many of 
these governments actively seek out U.S. suppliers. 
Thus, it's important that your products are listed in 
appropriate purchasing directories. See Chapter XIII 
for a discussion on how this can be done. But it won't 
hurt for you to alert these buying offices of your pro- 
duct and company. 

1. Contact each office to determine its interest in 
your product. Write a letter describing your pro- 
duct, include descriptive catalogs and specification 
sheets. 

2. Followup with those offices expressing an interest. 

3. Develop your sales plan! 

TO SUM UP. There are limited opportunities for 
those who can supply commodities, raw materials, 
and manufactured products in particular, higher 
technology hardware. Some foreign governments 
have established U.S. offices, mostly in New York or 
Washington, D.C., to purchase or help facilitate the 
purchase of U.S.-made goods. Many will seek out 
potential vendors, but it's an easy task to contact 
them, by mail, with a description of your company's 
product. 

equipment under the provisions of U.S. AID financing. 
Commerce Business Daily is published five days a week. 
Subscriptions cost $80 from the Superintendent of 
Documents, Government Printing Office, Washington, 
D.C. 20402. Payment must accompany orders. 



AFRO-AMERICAN PURCHASING 
CENTER 

Foreign governments, particularly in African 
nations and some Far Eastern countries, utilize the 
Afro-American Purchasing Center, One World Trade 
Center, New York, New York 10048, to buy U.S.- 
made goods, from time to time. If AID financing is 
involved, the probability is even greater. 

All purchasing is done on a bid basis. For 
purchases below $5,000, the Center solicits informal 
bids from suppliers on its bid lists. 

Purchases over $5,000 are advertised in the Small 
Business Bulletin published by the Agency for 
International Development. Purchases over $50,000 
require formal bids, and they're advertised in Com- 
merce Business Daily. 

The Center maintains qualified supplier lists. All 
considered competitive are given an opportunity to 
submit bids to responses to these invitations to 
purchase. While the Center itself actively seeks to add 
potential suppliers to their bid lists, it welcomes 
information about companies and their products. 

Inquiries should be accompanied by product 
literature. Pricing information is not needed. One of 
their executives says, "We will include new names on 
our bid invitations at least for the first two or three 
times to see if their responses are competitive with 
those we receive." 

Purchases are actually made by the foreign 
governments, but the Afro-American Purchasing 
Center helps arrange for shipment and helps facilitate 
payment by the foreign government to the U.S. sup- 
plier. 



U.S.-BASED BUYING OFFICES OF FOREIGN GOVERNMENTS 
AND GOVERNMENT-OWNED FIRMS 

Every foreign government is a big potential customer for U.S. -made goods and services. Some countries have 
established permanent offices in the United States to seek out and purchase U.S. goods. Most are located either 
in New York or Washington, D.C. 

Additionally in some countries, the largest corporations, in particular airlines, petroleum and mining 
companies, are government-owned. Many of these companies have also established purchasing departments in 
the United States. 

The Rockville Counsulting Group, Inc., after extensive research, has identified over 200 U.S. -based buying 
offices of foreign governments and government-owned firms. We have listed them, by country, with complete 
mailing addresses. 



AFGHANISTAN 

Afghan Permanent Mission to 

the U.N. 

866 United Nations Plaza 
New York, NY 10017 

Embassy of Afghanistan 
2341 Wyoming Avenue, NW 
Washington, DC 20008 



AFRICA (countries with AID 
purchase contracts) 

Afro-American Purchasing Ctr, Inc. 
One World Trade Center 
New York, NY 10048 



ALGERIA 

Embassy of the Democratic and 
Popular Republic of Algeria 
2118 Kalorama Rd. , NW 
Washington, DC 20008 



ARGENTINA 

E.N.D.E. - Argentine Government 

Oil Fields 
350 Fifth Avenue 
New York, NY 10001 

Office of Military Attache 
1600 New Hampshire Avenue, NW 
Washington, DC 20009 

Siderurgica Argenntina Sociedad 

Mixta (S.A.S.M.) 

c/o The Armco International Corp. 
Middletown, Ohio 45042 

Aerolineas Argentines 
Cargo 81 dg. 261 
John F. Kennedy Int'l Arpt. 
Jamaica, NY 11430 



AUSTRALIA 

Consulate-General of Australia 
636 Fifth Avenue 
New York, NY 10020 

Qantas Airways , Ltd. 

183 Utah Street 

San Francisco, CA 94080 

Australian Embassy 

1601 Massachusetts Avenue, NW 

Washington, DC 20036 

Defense Supply Attache- 
Australian Embassy 
1601 Massachusetts Avenue, NW 
Washington, DC 20036 



BELGIUM 

Belgian Military Supply Office 
5454 Wisconsin Avenue, NW 
Washington, DC 20015 

Sabena (national airline) 
Lake Success Business Park 
125 Community Drive 
Great Neck, NY 11021 



BENIN (formerly Dahomey) 

Embassy of the People's Republic 

of Benin 

2737 Cathedral Ave., NW 
Washington, DC 20008 



BOLIVIA 

Y.P.S.B. 

3334 Richmond Avenue 

Houston, Texas 77006 

Corporaction Minera de Bolivia 
2 W. 45th Street 
New York, NY 10036 



BOTSWANA 

Embassy of the Republic of 

Botswana 
4301 Connecticut Ave., NW, 

Suite 404 
Washington, DC 20008 



BRAZIL 

Brazil Naval Commission 
4706 Wisconsin Avenue, NW 
Washington, DC 20016 

Brazilian Military Commission 
4000 Albemarle St., Rm. 203 
Washington, DC 20016 

Brazilian Steel Company 
477 Madison Ave., Rm. 703 
New York, NY 10022 

COSIPA Steel Mill Co. 

271 Madison Ave., 17th Floor 

New York, NY 10016 

PETROBRAS 

1221 Avenue of the Americas 

New York, NY 10020 

Brazil Aeronautical Commission 
1701 - 22nd St., NW 
Washington, DC 20008 



BURMA 

Embassy of the Socialist 

Republic of Burma 
2300 S Street, NW 
Washington, DC 20008 

The Consulate of the Socialist 

Republic of Burma 
10 E. 77th Street 
New York, NY 10021 

The Office of the Military, 
Naval & Air Attaches of the 
Socialist Rep. of Burma 

2300 California St.. NW 



BURUNDI 



CHINA (Taiwan) 



Embassy of the Republic of 

Burundi 

2717 Connecticut Ave. , NW 
Washington, DC 20008 



CANADA 

Contract Services Branch 
Dept. of Supply and Services 
70 Lyon Street 
Ottawa, Ontario 
Canada 

Canadian Dept. of Defense Prod. 
2450 Massachusetts Ave. , NW 
Washington, DC 20008 

Canadian Wheat Board 

1746 Massachusetts Ave., NW 

Washington, DC 20036 

Air Canada 

U.S. & Southern Regional Office 

600 Madison Ave. 

New York, NY 10022 



CENTRAL AFRICAN REPUBLIC 

Embassy of Central African Rep. 
1618 - 22nd Street, NW 
Washington, DC 20008 



CHILE 

Chilean Copper Corp. 
One World Trade Center 
New York, NY 10048 

Chilean Development Corp. 
One World Trade Center 
New York, NY 10048 

Chilean Steel Mill 
One World Trade Center 
New York, NY 10048 

Chilean Trading Corp. 
One World Trade Center 
New York, NY 10048 

Chilean Air Force Mission 

1875 Connecticut Ave., Rm. 1212 

Washington, DC 20009 

Chilean Naval Mission 
Chilean Military Mission 
1732 Massachusetts Ave., NW 
Washington, DC 20036 

Lan-Chile Airlines 
Fourth Floor 
150 S.E. Second Avenue 
Miami, Fla. 33131 



Chinese Government Procurement 

Services Mission 
(Ministry of National Defense 

Division) 
222* R Street, NW 
Washington, DC 20008 



Chinese Government Procurement 8 

Services Mission 

One World Trade Ctr. , Suite 2273 
New York, NY 10048 



COLOMBIA 

Colombian Air Force Purchasing 

Agency 

3950 S.W. 12 Terrace 
Ft. Lauderdale Airport 
Ft. Lauderdale, Fla. 3331 5 

Colombian Military Purchasing 

Commission 

2118 LeRoy Place, NW 
Washington, DC 20008 

Aero Condor 

Bldg. C-8 

Miami Int'l Airport, Box 48-0162 

Miami, Fla. 33148 

Avianca 

Box 2455 

AMF 

Miami, Fla. 33159 



COSTA RICA 

Lineas Aereas Costarri censes, S.A. 
Executive & Sales Offices 
238 Biscayne Blvd. 
Miami, Fla. 33132 



CYPRUS 

Embassy of Cyprus 
2211 R Street, NW 
Washington, DC 20008 



CZECHOSLOVAKIA 

Czechoslovak Embassy Comm. Dept. 
3900 Linnean Avenue, NW 
Washington, DC 20008 



ECUADOR 

Naval Attache 
Embassy of Ecuador 
2535 - 15th Street, NW 
Washington, DC 20009 

Air Attache 
Embassy of Ecuador 
2535 - 15th Street, NW 
Washington, DC 20009 



Military. Attache 
Embassy of Ecuador 
2535 - 15th Street, NW 
Washington, DC 20009 

Aerolineas Nacionales del 

Ecuador, S.A. 
Box 481063 
Miami, Fla. 33143 

Empresa Ecuatoriana de Aviacion 
Bldg. 1006 at N.W. 62nd Ave. 
International Airport 
Miami, Fla. 33148 



ETHIOPIA 

Embassy of Ethiopia 
2134 Kalorama Rd., NW 
Washington, DC 20008 

Commercial Counselor 
1224 Connecticut Ave., NW 

Suite 515 
Washington, DC 20036 

Ethiopian Airlines, S.C. 
200 E. 42nd Street 
9th Floor 
New York, NY 10017 



FIJI 

Fiji Mission to the U.N. 

United Nations Plaza, 26th Floor 

New York, NY 10017 



FINLAND 

Office of the Defense and Armed 

Forces Attache 
Embassy of Finland 
1900 - 24th Street, NW 
Washington, DC 20008 



FRANCE 

Industrial Development Procure- 
ment, Inc. 
1 Old Country Road 
Carle Place 
Garden City, NY 11514 

French Mining Chemical and 

Allied Industries 
35 Wisconsin Circle 
Chevy Chase, Maryland 20015 

Materiel French Military Mission 
2164 Florida Ave, NW 
Washington, DC 20008 

Air France 

1350 Ave. of the Americas 

New York, NY 10019 



Air attache 
French Embassy 
2535 Belmont Road, NW 
Washington, DC 20008 

Military Attache 
French Embassy 
2535 Belmont Road, NW 
Washington, DC 20008 

French Supply Office 

1001 Connecticut Avenue, NW 

Washington, DC 20036 

Societe Nationale des Chemins 

de Per Francais 
610 Fifth Avenue 
New York, NY 10020 



GABON 

Embassy of the Gabonese Republic 
2210 R Street, NW 
Washington, DC 20008 



GREAT BRITAIN - See UNITED KINGDOM 



GREECE 

Embassy of Greece 

Office of the Commercial Counselor 
2211 Massachusetts Ave. , NW 
Washington, DC 20008 



GRENADA 

Grenada Tourist Information Office 
866 Second Avenue, Suite 502 
New York, NY 10017 



GUATEMALA 

Embassy of Guatemala 
2220 R Street, NW 
Washington, DC 20008 

Office of Air & Military Attache 
2220 R Street, NW 
Washington, D C 20008 

Empresa Guatemalteca de 

Aviacion 

Suite 501, 999 S. Bayshore Dr. 
Miami, Fla. 33131 



GUINEA 

Embassy of the Republic of Guinea 
2112 LeRoy Place, NW 
Washington, DC 20008 



GUYANA 

Setnin Corporation 
445 Park Avenue 
New York, NY 10022 



HAITI 

Commercial Counselor 
Embassy of Haiti 
4400 - 17th Street, NW 
Washington, DC 20011 



Military Attache 
Embassy of Haiti 
4400 - 17th Street, NW 
Washington, DC 20011 

Commercial Attache 

32 Broadway, Suite 1000 

New York, NY 10004 



ICELAND 

Commercial Officer of Iceland 
370 Lexington Avenue 
New York, NY 10017 

Luftleider (national airline) 
630 Fifth Avenue 
New York, NY 10020 



INDIA 

India Supply Mission 
2536 Massachusetts Ave. 
Washington, DC 20008 

Consulate General of India 
3 East 64th Street 
New York, NY 10021 

State Trading Corp. of India, Ltd. 
One World Trade Center, Suite 2655 
New York, NY 10048- 

Indian Investment Center 
708 - 3rd Avenue 
New York, NY 10017 

Trade Development Authority of 

India 

666 - Fifth Avenue 
New York, NY 10019 

Engineering Export Promotion 

Council of India 

333 N. Michigan Ave., Suite 2014 
Chicago, IL 60601 

Air India 

Purchasing & Stores Section 

Cargo Bldg. 84 

John F. Kennedy Int'l Airport 

Jamaica, NY 11430 



INDONESIA 

Indonesian Trade Commissioner 
Embassy of the Republic of Indonesia 
2020 Massachusetts Ave., NW 
Washington, DC 20036 

Indonesian Commercial Attache 
5 East 68th Street 
New York, NY 10021 



Indonesian Procurement & 

Development Agency, Inc. 
80 Broadway 
New York, NY 10004 

Indonesian Oil Company 
305 E. 86th Street 
New York, NY 10028 



IRAN 

National Iranian Oil Co. 
1271 Avenue of the Americas 
New York, NY 10020 

Iranian Embassy 

3005 Massachusetts Ave., NW 

Washington, DC 20008 

Office of the Military Attache 
Iranian Embassy 
3005 Massachusetts Ave. , NW 
Washington, DC 20008 

Bank Melli Iran 
Office of Representative 
1 Wall Street, Room 3812 
Hew York, NY 10005 

Iran National Airlines Corp. 

345 Park Ave. 

New York, NY 10022 



IRELAND 

Aer Lingus 

5,64 Fifth Avenue 

New York, NY 10036 



ISRAEL 

Government of Israel Supply 

Mission 

641 Lexington Ave. 
New York, NY 10022 

El Al Israel Airlines, Ltd. 
850 Third Avenue 
New York, NY 10022 



ITALY 

Italian Defense Ministry 
Defense & Air Attache Office 
2110 LeRoy Place, NW 
Washington, DC 20008 

Italian Federation of Farmers' 

Cooperatives 
1725 - Eye Street, NW 
Washington, DC 20006 

Italian Technical Delegation 
1601 Fuller Street, NW 
Washington, DC 20009 

Air Attache 
Italian Embassy 
1601 Fuller Street, NW 
Washington, DC 20009 



IVORY COAST 

Ivory Coast Development Office 
521 Fifth Avenue, Suite 1604-5 
New York, NY 10017 

Ivory Coast Stabilization Fund 
120 Wall Street 
New York, NY 10005 



JAMAICA 

Jamaica Nutrition Holdings, Ltd. 
1776 K Street, NW 
Washington, DC 20006 



JAPAN 

Japan Trade Center 

1221 Avenue of the Americas 

New York, NY 10020 

Japan Air Lines Co., Ltd. 
Los Angeles Int'l Airport 
6041 H. Imperial Hwy. 
Los Angeles, CA 90045 



JORDAN 

Jordanian Information Bureau 
1701 K Street, NW, Suite 1004 
Washington, DC 20006 

ALIA - Royal Jordanian Airline 

Corp. 

280 Madison Ave. , Suite 802 
New York, NY 10016 



KENYA 

Embassy of the Republic of Kenya 
2249 R Street, NW 
Washington, DC 20008 



KOREA 

Procurement Officer 
Korean Consulate General 
460 Park Avenue, 5th Floor 
New York, NY 10022 

Korean Traders Association 
460 Park Avenue, 6th Floor 
New York, NY 10022 

Korea Trade Promotion Center 
460 Park Avenue, 4th Floor 
New York, NY 10022 

Korea Electronic & Machinery 
Industries Information Office 
460 Park Avenue, Suite 636 
New York, NY 10022 



Korea lungsten raining UK, Lta. 
10 West 56th Street 
New York, NY 10019 

Korean Airlines 
350 Fifth Avenue 
New York, NY 10001 

Korean Airlines 

5600 W. Century Blvd, Suite 216 

Los Angeles, CA 90045 

Korea National Tourism Corp. 
460 Park Avenue, Room 628 
New York, NY 10022 

Korea Export Industrial Co., Ltd. 
501 Fifth Avenue, Suite 1614 
New York, NY 10017 

Korea Km" tted Goods Export 

Association 

320 Fifth Avenue, Room 7012 
New York, NY 10001 

Pohang Iron & Steel Co., Ltd. 
41 E. 42nd Street, Suite 719 
New York, NY 10017 

Inchon Iron & Steel Co., Ltd. 
20 Vesey Street 
New York, NY 10007 



KUWAIT 

Kuwait Airways Corp. 
30 Rockefeller Plaza 
New York, NY 10020 



LIBERIA 

Minister of Press and Information 
Embassy of Liberia 
5201 - 16th Street, NW 
Washington, DC 20011 

Charles Kramer 
100 E. 42nd Street 
New York, NY 10017 



LIBYA 

Office of Scientific and 

Technical Affairs 
1717 Massachusetts Avenue, NW 
Washington, DC 20036 

Office of Military Affairs 
2344 Massachusetts Avenue, NW 
Washington, DC 20008 



MALAWI 



Malawi Embassy 
Bristol House 
1400 - 20th Street, NW 
Washington, DC 20036 



wasmngnon, ui. 



MALTA 

Embassy of Malta 

2017 Connecticut Avenue, NW 

Washington, DC 20008 



MAURITANIA 

Embassy of the Islamic Republic 

of Mauritania 
2129 LeRoy Place, NW 
Washington, DC 20008 



MEXICO 

Mexican Railway System 
777 - 14th Street, NW 
Washington, DC 20005 

Mexican Railway System 
120 Wall Street 
New York, NY 1Q005 

Petrol eos Mexicanos 
655 Madison Ave. 
New York, NY 10021 

Mexican Institute for Foreign 

Trade 

1660 L- Street, NW 
Washington, DC 20036 



MOROCCO 

Embassy of Morocco 
1601 - 21st Street, NW 
Washington, DC 20009 



THE NETHERLANDS 

The Netherlands Naval Attache 
Royal Netherlands Embassy 
4200 Linnean Avenue, NW 
Washington, DC 20008 

Procurement Section, Royal 

Netherlands Air Force 
Office of the Air Attache 
Royal Netherlands Embassy 
4200 Linnean Avenue, NW 
Washington, DC 20008 

Procurement Section, Royal 

Netherlands Army 
Office of the Military Attache 
Royal Netherlands Embassy 
4200 Linnean Avenue, NW 
Washington, DC 20008 

KLM - Royal Dutch Airlines 
KLM Building 
609 Fifth Avenue 
New York, NY 10017 



NEW ZEALAND 

New Zealand Defence Staff 

1601 Connecticut Avenue, NW, Suite 500 

Washington, DC 20009 

Embassy of New Zealand 
Finance Office 
1707 L Street, NW 
Washington, DC 20036 

New Zealand Senior Trade 

Commissioner 
1707 L Street, NW 
Washington, DC 20036 

Air New Zealand, Ltd. 

510 W. Sixth Street, Suite 1000 

Los Angeles, CA 90014 

New Zealand National Airways Corp. 

P.O. Box 1518 

Sun Valley, CA 91352 



NICARAGUA 

Commercial Section 
Embassy of Nicaragua 
1627 New Hampshire Avenue, NW 
Washington, DC 20009 

Military Attache 

Embassy of Nicaragua 

1627 New Hampshire Avenue, NW 

Washington, DC 20009 

Lanica (national airline) 
41 Columbus Hotel Arcade 
Miami, Florida 33132 



NIGER 

Embassy of Niger 
2204 R Street, NW 
Washington, DC 20008 



NIGERIA 

Embassy of Nigeria 
Commercial Division 
2201 M Street, NW 
Washington, DC 20037 



NORWAY 

Norwegian Military Mission 
3401 Massachusetts Avenue , NW 
Washington, DC 20007 



PAKISTAN 

Commercial Secretary 
Consulate General of Pakistan 
12 East 65th Street 
New York, NY 10021 

Defense Procurement Office 
2201 R Street, NW 



Commercial Secretary 
Embassy of Pakistan, Chancery Annex 
2315 Massachusetts Avenue, NW 
Washington, DC 20008 

Pakistan International Airlines 
545 Fifth Avenue 
New York, NY 10017 



PANAMA 

Air Panama International 
304 N.E. First Street 
Miami, Fla. 33132 



PARAGUAY 

Embassy of Paraguay 

Offices of the Military, Naval 

and Air Attaches 
2400 Massachusetts Avenue, NW 
Washington, DC 20008 

Consulate General of Paraguay 

One World Trade Center, Suite 1609 

New York, NY 10048 



PERU 

Empresa Publica de Comercializacion 
de Harina y Aceite de Pescada 

Agent: Mr. Carlos Mendoza 
P.O. Box 220 
Maple Wood, NJ 07040 

Commercial Department 
Peruvian Embassy 
1700 Massachusetts Avenue, NW 
Washington, DC 20036 

Office of Naval Attache 
Peruvian Embassy 
1700 Massachusetts Avenue, NW 
Washington, DC 20036 

Chief of the Military Commission 
Peruvian Embassy 
1700 Massachusetts Avenue, NW 
Washington, DC 20036 

Office of Air Attache 
Peruvian Embassy 
1700 Massachusetts Avenue, NW 
Washington, DC 20036 

Aero Peru 

First Federal Bldg., Suite 3000 

One S.E. Third Avenue 

Miami, Fla. 33131 



PHILIPPINES 

Philippine Consulate General 
Philippine Centre 
556 Fifth Avenue 
New York, NY 10036 

Philippine Sugar Association 
1001 Connecticut Avenue, NW 



PORTUGAL 

Embassy of Portugal 
2125 Kalorama Road, NW 
Washington, DC 20008 

TAP (national airline) 
1140 Avenue of the Americas 
New York, NY 10036 



ROMANIA 

Embassy of the Socialist 

Republic of Romania 
1607 - 23rd Street, NW 
Washington, DC 20008 

Romanian Foreign Trade 

Promotion Office 
Chicago and Midwest 
100 W. Monroe Street, Suite 911 
Chicago, IL 60603 

Romanian Foreign Trade Promotion 

Office 

350 S. Figueroa Street, Suite 477 
Los Angeles, CA 90071 

Romanian Tourist Office 
500 Fifth Avenue 
New York, NY 10036 

Romanian Flight - Tarotn 
500 Fifth Avenue 
New York, NY 10036 

Romanian Library 
866 Second Avenue 
New York, NY 10017 

Romanian Mission 
60 East 93rd Street 
New York, NY 10028 

Romanian Commercial Office 
95 Madison Avenue 
New York, NY 10016 



SAUDI ARABIA 

Royal Embassy of Saudi Arabia 
1520 - 18th Street, NW 
Washington, DC 20036 

Office of the Saudi Military 

Attache 
4302 Connecticut Avenue, NW 

Suite 131 
Washington, DC 20008 

Office of Naval Operation 
Saudi Naval Expansion Program 
Opnav-63C (Pentagon) 
Washington, DC 20350 

Saudi Arabian Mission to the U.N 
6 East 43rd Street, 26th Floor 
New York, NY 10017 



Saudi Arabian Educational Mission 
West Loop South, Suite 400 
Houston, Texas 77027 

Saudi Arabian Airlines (Saudia) 

2420 Pershing Road 

Suite 216 

Kansas City, Mo. 64108 



SIERRA LEONE 

Economic Secretary 
Embassy of the Republic of 

Sierra Leone 
1701 - 19th Street, NW 
Washington, DC 20009 



SOMALIA 

Embassy of the Somali Democratic 

Republic 
600 New Hampshire Avenue, NW 

Suite 710 
Washington, DC 20037 



SOUTH AFRICA 

South African Railways & Airways 

Procurement Office 
71 S. Central Avenue 
Valley Stream, NY 11580 



SPAIN 

Embassy of Spain 
2700 - 15th Street, NW 
Washington, DC 20009 

Iberia (national airline) 
177-15 - 149th Road 
Jamaica, NY 11434 



SWEDEN 

Swedish Trade Commission 
825 Third Avenue 
New York, NY 10022 

Office of the Army Attache 
Swedish Embassy 
600 New Hampshire Avenue, NW 
Washington, DC 20037 

Office of the Naval Attache 
Swedish Embassy 
600 New Hampshire Avenue, NW 
Washington, DC 20037 

Office of the Air Attache 
Swedish Embassy 
600 New Hampshire Avenue, NW 
Washington, DC 20037 



SWITZERLAND 

Military Attache 
Embassy of Switzerland 
2900 Cathedral Avenue, NW 
Washington, DC 20008 



TRINIDAD AND TOBAGO 

Embassy of Trinidad & Tobago 
1708 Massachusetts Avenue, NW 
Washington, DC 20036 

Trinidad & Tobago Consulate 
331-3 Graybar Bldg. 
420 Lexington Avenue 
New York, NY 10017 

Trinidad & Tobago 
Industrial Development Corp. 
400 Madison Avenue, Suite 712-4 
New York, NY 10017 

Trinidad & Tobago 

Tourist Board 

400 Madison Avenue, Suite 712-4 

New York, NY 10017 



TURKEY 

Embassy of Turkey 
Supply and Shipping Bureau 
2523 Massachusetts Avenue, NW 
Washington, DC 20008 

Military Attache 

1606 - 23rd Street, NW 

Washington, DC 20008 



UGANDA 

Embassy of the Republic of Uganda 
5909 - 16th Street, NW 
Washington, DC 20011 



U.S.S.R. 



Trade Representative of USSR 
2001 Connecticut Avenue, NW 
Washington, DC 20006 

Amtorg Trading Company 
255 Lexington Avenue 
New York, NY 10017 

U.S.S.R. Trade and Economic Counselor 
280 Park Avenue 
New York, NY 10017 

Kama River Purchasing Agency 
767 Fifth Avenue 
New York, NY 10022 

San Francisco Commercial Group 
General Consulate Office 
2790 Green Street 
San Francisco, CA 94123 

Aeroflot 

545 Fifth Avenue 

New York, NY 10017 



UNITED KINGDOM 

United Kingdom Treasury & Supply 

Delegation 

3100 Massachusetts Avenue, NW 
Washington, DC 20008 



URUGUAY 

Uruguayan Government Trade 

Bureau 

301 E. 47th Street, #21-0 
New York, NY 10017 

Commercial and Financial Dept. 
Embassy of Uruguay 
1918 F Street, NW 
Washington, DC 20006 

Uruguayan Military Mission 
1918 F Street, NW 
Washington, DC 20006 



VENEZUELA 

Venezuelan American Association 
55 Liberty Street 
New York, NY 10005 

Military Attache Procurement 

Office 

2409 California Avenue, NW 
Washington, DC 20008 

Corporacion Venezolana del 

Petrol eo 

515 Madison Avenue 
New York, NY 10022 

Siderurgica Venezolana Sivensa 
411 E. 53rd Street 
New York, NY 10019 



WEST GERMANY 

Lufthansa (national airline) 
1640 Hempstead Turnpike 
East Meadow, NY 11554 



YEMEN 

Embassy of the Yemen Arab 

Republic 
600 New Hampshire Avenue, NW 

Suite 860 
Washington, DC 20037 



YUGOSLAVIA 

Yugoslav Purchasing Agency 
2410 California Avenue, NW 
Washington, DC 20008 



ZAIRE 

Embassy of the Republic of Zaire 
1800 New Hampshire Avenue, NW 
Washington, DC 20009 



ZAMBIA 

Embassy of the Republic of Zambia 
2419 Massachusetts Avenue, NW 
Washington, DC 20008 



CHAPTER IX 



SELLING TO THE UNITED NATIONS: SPECIALIZED 

OPPORTUNITIES 

This chapter will be useful to suppliers of industrial goods. 



MORE THAN A DEBATING SOCIETY. The 
United Nations (U.N.), headquarters in New York, 
is much more than an international peace-keeping 
forum. Some 85 percent of its resources are directed 
at aiding the poorer nations of the world. 

The U.N. or its ten affiliated international 
agencies annually buy about $50 million worth of 
equipment, ranging from computers to hand tools. It 
does not, however, have to purchase goods made in 
the United States (even though the United States 
financial support of the United Nations is greater 
than any other country). The U.N. can buy anywhere 
in the world. 

UNDP. The main conduit for channeling this aid is 
the United Nations Development Programme 
(UNDP), also headquartered in New York. The 
UNDP calls itself the world's largest channel for 
international technical cooperation, with a budget in 
excess of $400 million. UNDP financially-supported 
projects range from developing a country's 
agriculture to surveying a nation's assets such as 
mineral deposits. While the UNDP funds these proj- 
ects, purchase of the required goods and services is 
done by the United Nations agency or contractor 
assigned responsibility for implementing the project. 
These agencies are listed in the box on page 46. A 
brief description of three of the larger agencies fol- 
lows. The UNDP publishes a monthly bulletin which 
lists U.N. purchase requirements and contract 
awards for UNDP projects. 



oratory apparatus and supplies, construction dril- 
ling, excavating and camping equipment, portable 
homes and workshops, office equipment and sup- 
plies. 

2. Food and Agricultural Organization (FAO). This 
agency is interested in projects related to a 
country's agricultural development. Thus, it funds 
projects related to soil erosion control, land 
reclamation, demonstration projects in irrigation, 
and even development of ocean resources. 

3. United Nations Industrial Development Organiz- 
ation (UN I DO). This agency helps develop a 
country's industrial base. It contracts for 
feasibility studies and pilot plant projects, 
particularly those concerned with food processing, 
mining, petrochemical, and utilities. It requires 
test equipment, instruments, audio-visual 
equipment, office equipment and supplies. 

Most U.N. agencies have purchasing offices in New 
York as well as abroad. 

HOW UN AGENCIES BUY. Procurement officials 
at each U.N. agency generally ask for bids when the 
projected purchase is over a certain value. The World 
Health Organization (WHO) solicits formal bids if 
the purchase amount will exceed $2,500 and sealed 
bids if the procurement will exceed $10,000. For the 
United Nations, single procurements over $5,000 call 
for open bidding. Procurement officials maintain 
extensive supplier lists. Sometimes general inquiries 
will be sent to all suppliers listed in certain 



;_^.- ____ tri \r 



doubt about the ability of the company to deliver. 
Orders given to a U.S. supplier, even if from a 
purchasing location outside the United States, 
generally will call for shipment to a location in the 
United States (where the U.N. will arrange for 
shipment to the foreign site). Payment, in dollars, 
from the U.N.'s headquarters, can usually be 
arranged. So selling to agencies of the United 
Nations is similar to selling to your U.S. -based ac- 
counts. 

THREE SUGGESTION FOR TAPPING U.N. 
BUSINESS. First, become familiar with how the 
United Nations and its agencies purchase. Write for 
the free UNDP Business Guide. While not the best lo- 
oking document in the world, it details procurement 
procedures for all U.N. agencies and thels where to 
register for procurement. Available from: Division of 
Information, UNDP, 866 United Nations Plaza, 
New York, New York 10017. 

Second, get listed as a potential supplier with those 
U.N. agencies who maintain vendor files. For 
example, the World Health Organization (WHO) 
encourages suppliers to send catalogs and price lists 
for use at their Geneva (Switzerland) headquarters 
and the six regional WHO headquarters. The United 
Nations Education, Scientific, and Cultural Organiz- 
ation (UNESCO) maintains catalogs of equipment 
suppliers in its field equipment division located in 



Paris. Send catalogs and general price information to 
these agencies in multiple copies, with a cover letter 
expressing your interest in being placed on appro- 
priate supplier lists. 

Thirdly, develop asystem to discover on-goingU.N. 
procurement needs. The UNDP Business Bulletin, 
published monthly, lists requirements for goods and 
services (as well as listing contract awards). Write: 
Division of Information, UNDP, 866 United Nations 
Plaza, New York, New York 10017. Development 
Forum, another free monthly publication, gives 
information on key U.N. development projects. To 
subscribe, write: Center for Economic and Com- 
mercial Information (CESI), United Nations, Palais 
des Nationes, CH-1211 Geneva 10, Switzerland. 

TO SUM UP: A LIMITED MARKET. The United 
Nations represents a small segment of the U.S.-for- 
export market. Yet firms offering equipment, in 
particular unique, proprietary equipment, may be 
able to develop an "export" business. Since selling 
usually requires familiarity with formal bidding 
techniques and compliance with purchasing 
conditions, this segment may not be for those firms 
looking for a "fast" sale. However, companies that 
do business with the U.N. or its agencies will find 
that shipping requirements and payment procedures 
are not unlike procedures in selling to U.S.-based 
customers. 



HOW TO REGISTER WITH UNITED NATIONS (UN) PURCHASING OFFICES 

The UN and its related agencies purchase a large amount of goods and services annually. Here are the offices 
within the UN agencies with whom you should register. 



U.N. /United Nations 

Chief, Purchase and Transportation Service 

New York, N.Y. 10017 

ILO/International Labour Organization 
Chief, Bureau for the Coordination of 
Operational Activities 
International Labour Office 
Geneva 22, Switzerland 

FAO/Food and Agriculture Organization 
Chief, Purchasing and Control Branch 
Administrative Services Division i 
Food and Agriculture Organization of 
the United Nations 
via delle terme di Caracalla 
Rome, Italy 

UNESCO/United Nations Educational, 
Scientific, and Cultural Organization 
Director, UNESCO Field Equipment Division 
UNESCO 

7, Place de Fontenoy 
75700 Paris, France 

ICAO/International Civil Aviation Organization 
Director, Technical Assistance Bureau 
International Civil Aviation Organization 
International Aviation Building 
1080 University Street 
Montreal 101, Canada 

WHO/World Health Organization 
Deputy Director General 
World Health Organization 
Avenue Appia, 
Geneva 22, Switzerland 



ITU/International Telecommunications Union 
The Secretary General 
International Telecommunications Union 
1211 Geneva 20, Switzerland 

IAEA/International Atomic Energy Agency 
Division of Technical Assistance 
International Atomic Energy Agency 
Kaerntnerring 11, 
A-1010 Vienna 1, Austria 

UNIDO/United Nations Industrial Development 
Organization 

Chief, Purchasing and Contracting Serv~ices 
UNIDO 
P.O. Box 707, 
A-1011 Vienna, Austria 

IMCO/InterGovernmental Maritime Consultive 
Organization 

Director, Technical Co-operation Division 
10 1-104 Piccadilly 
London WiV OEA, England 

WMO/World Meteorological Organization 

Director, Technical Co-operation Department 

World Meteorological Organization 

P.O. BoxNo.5, 

CH-121 1 Geneva 20, Switzerland 

UNDP/United Nations Development Programme 
Director, Office for Projects Execution 
United Nations Development Programme 
New York, New York 10017 



CHAPTER X 



SELLING TO FOREIGN DEPARTMENT STORES 

STATES! 



IN THE UNITED 



This chapter will be useful to companies that market consumer goods. 



LARGE FOREIGN DEMAND FOR U.S. 
CONSUMER GOODS. Every year more than $5 
billion in U.S. consumer goods are sold outside the 
United States. Foreign customers like practically all 
American-made consumer goods. However, the U.S. 
Department of Commerce notes that 22 categories of 
consumer goods do particularly well in export 
markets. (The box on page 48 lists these categories.) 
Foreign department stores and chain store 
operations equivalent to Macy's, Marshall Field's, 
Woolworth's, or K-Mart purchase an important 
share of the $5 billion export total. Some buy from 
importers or sales representatives in their own 
country those firms handling U.S. lines of 
merchandise. However, a few of the largest foreign 
department stores have set up their own buying 
offices in the United States. 



Other large foreign stores use the services of U.S. 
resident buying organizations who buy for non- 
competing U.S. and foreign department stores. They 
have their own staff of merchandise buyers! 1 

BUYING OFFICES. Foreign department store 
buying offices can be important customers for the 
U.S. firm selling department store merchandise. 
Practically all offices are located in New York. 
Purchasing patterns vary. The six stores with their 
own offices generally ask for delivery to a U.S. 
warehouse or freight forwarder who will then handle 



'Many foreign retail outlets also send their buyers to im - 
portant merchandising events in the United States. These 
foreign buyers visiting the United States are further dis- 
cussed in chapter XI. 



SIX FOREIGN DEPARTMENT STORES WITH THEIR OWN U.S. BUYING OFFICES 



Daimaru, Inc. 
2 12 Fifth Avenue 
New York, N.Y. 10010 
(Daimaru Department Store, 
Tokyo, Japan) 

Seibu Corp. of America 

Room 3475 

1221 A venue of the Americas 



XT ---- x/~_i, XT V 



Takashimaya Company, Ltd. 
6 East 43rd Street 
New York, N.Y. 10017 
(Seibu Department Store, 
Tokyo, Japan) 



The Robert Simpson Co., Ltd. 

11 West 42nd Street 
xT~,,,v~,.i, XT v mm/; 



T. Eaton Co., Ltd. 
393 Seventh Avenue 
New York, N.Y. 10017 
(Eaton Department Store chain 
in Canada) 



SONAC-Nouvelles Galeries 
1 1 West 42nd Street 
MPVI/ v/^rL- XT v 



U.S. CONSUMER GOODS: THE TOP SELLERS IN FOREIGN MARKETS 



The United States exports more than $5 billion 
worth of U.S. consumer goods annually. The best- 
selling items are listed below. 

* Push lawn mowers gasoline operated self-pro- 
pelled, rider type 8 HP outsells all other units. 

* Linens sheets, towels (all terrycloth). 

* Bath shop items shower curtains, soap dishes, 
hooks, shelves, towel racks, fancy soaps, scales, 
bathroom rugs or 3-piece sets. 

* Machine-made glassware tableware. 

* Housewares 

Cast iron cookware black iron 

Specialty plastic items 

Porcelain and enamel ware (with special 
packaging) 

Home label makers 

Plastic place mats and coordinated place 
settings 

Decorative wall mirrors gold ornate (made of 
plastic carved wood) 

Closet and toilet deodorants 

Thermometers (high style) 

Ice buckets 

Barbeques 

Oven mitts and pot holders 

TV tray tables 

Bar accessories 

Drapery hardware 



* Lingerie all types sleepwear and loungeweai 

* Ready-to-wear 

Budget to moderate women's dresses and spc 
wear 

Children's wear specialty items 

Boys' wear baseball jackets, T-shirts, T-shi 
with printed slogans. 

* Costume jewelry all types emphasis on fashi< 

* Men's wear 

Socks 

Ties knitted 

Shirts printed specialties only 

Accessories belts, leather goods 

* Giftware. 

* Toys and games and sporting goods. 

* Textiles for shipment to store's manufacturer 
garments. Piece goods are not sold over 
counter. 

* Needlepoint kits. 

* Early American and colonial furniture. 

* Patio furniture. 

* Pocket calculators. 

* Swimming pools and accessories. 

* Knockdown furniture. 

* Cosmetics and beauty products. 

* Stationery. 

* Novelties, notions. 

* Do-It-Yourself tools (hand and power). 



shipment to the foreign stores. These buying offices 
generally pay the U.S. supplier from a U.S. bank acc- 
ount. In this case, the "export" sale is no different 
from selling to a U.S. department store. 

Foreign department stores that use a resident 
buying office have a slightly different payment 
method. While they will ask for shipment to a U.S. 



own account. In this case, the U.S. supplier will 
paid in the United States. 

DON'T WRITE. Department store buyers han 
ever read mail. They don't have time for it. They v 
insist on seeing you. They are particularly interes 
in two things: seeing the merchandise a 



inrntinn thpv mav wish tr ruiv 



T I 



iinnpr rnm 



rlptprrmnincr what it will 



etr\rp> \A 



BUYING OFFICES IN THE UNITED STATES SERVING FOREIGN 

DEPARTMENT STORES 

Many foreign department stores use the services of "resident" buying offices in order to seek out and 
purchase U.S. consumer goods. Here are some of the leasing offices. 



Aaron Schwab International 

208 West 8th Street 

Los Angeles, Calif. 90014 

Arkwright, Inc. 
50 West 44th Street 
New York, N.Y. 10036 

Associated Merchandising Corp. 

1440 Broadway 

New York, N.Y. 10018 

Felix Lilienthal & Co., Inc. 
417 Fifth Avenue 
New York, N.Y. 10016 

Independent Retailers Syndicate 
33 West 34th Street 
New York, N.Y. 10001 



Kirby Block Marketing Serv ice 
292 Seventh Avenue 
New York, N.Y. 10001 

McGreevey, Werring & Howell 
225 West 34th Street 
New York, N.Y. 10001 

Maricent International, Inc. 
Suite 5305, 200 Park Avenue 
New York, N.Y. 10017 

Metasco Inc. 
International Division of 
Allied Stores Corporation 
1 120 Avenue of the Americas 
New York, N.Y. 10036 



Mutual Buying Syndicate 
1 1 West 42nd Street 
New York, N.Y. 10036 

Products Exchange Company, Inc. 
330 Fifth Avenue 
New York, N.Y. 10001 

R. W. Cameron and Co. 
420 Lexington Avenue 
New York, N.Y. 10017 

Retailers Representatives, Inc. 

1372 Broadway 

New York, N.Y. 10018 

Sears Roebuck International 
7401 N. Skokie Blvd. 
Skokie, 111. 60076 



2. Evaluating price. The buyer will also want price 
sheets for his files. 

3. Customer references. The buyer wants to know 
who buys what. Foreign department stores 
don't want to take a chance on unproven pro- 
ducts. 

4. Supplier terms and ability to deliver. 

If interested, the buyer at first may ask you to send 
samples to the store for evaluation. And before 
placing large orders, the store may start with trial 
orders to see how the product sells, and how the sup- 
plier performs. 

MERCHANDISING SHOWS. Buying office 
executives attend the major U.S. merchandising 
events such as major fashion weeks held in New York 
and Los Angeles, the Chicago Shoe Show, the 
National Housewares Show, etc. Sometimes, buyers 
from foreign department stores will make special 
trips to the United States. Many consumer goods 
trade shows go to extra lengths to help foreign 
visitors do business with exhibitors. For example, the 
organizers of the National Housewares Show provide 



promotions, featuring U.S. -made goods, can be 
successful. Recently, Au Printemps, a leading 
Parisian department store, sold more than $1.5 mil- 
lion in clothing, linens, furs, and textiles, in a special 
"Made-In-U.S.A. Week." The U.S. Department of 
Commerce helps those foreign department stores 
who plan "America Weeks.' 1 and it actively tries to 
stimulate other foreign department stores to consider 
such themes. The U.S. Department of Commerce will 
help defray part of the promotion expense, and help 
the store to locate and purchase specific U.S. 
merchandise. To get this promotion funding, 
however, the foreign department stores must agree to 
buy a specified volume of U.S. consumer goods. 

Important point: The U.S. Department of Com- 
merce will register U.S. firms which market certain 
categories of consumer products which have proven 
to be best-sellers abroad in special U.S.A. Week 
promotions. (The box on page 50 lists these product 
categories.) When a foreign department store agrees 
to a "U.S. A Week," the Commerce Department puts 
the store (or its buying office) in touch with the sup- 
pliers who are registered with it. Buyers from the 
store will often make special trips to the U.S. to visit 
suppliers, frequently accompanied by Commerce 



manufacturer, and have established sales 
representatives to handle your U.S. sales, get these 
representatives to make the sales call. Remember, 
department store buyers are busy. Telephone for 
an appointment. As most buying offices are in 
New York, try to set up several appointments. Put 
your best foot forward when requesting an ap- 
pointment. Mention your product and the U.S. 
department stores in the United States who 
already buy from you. This is very important. 
Bring samples, catalogs, and price sheets to the 
meeting. 

2. Register with the U.S. Department of Commerce 
for their In-Store Promotion Program. 
Registration forms are available from: 

In-Store Promotion Program 
U.S. Department of Commerce 
Office of International Marketing 
Washington, D.C. 20230 

3. Get a schedule of the important merchandising 
events to be held in the United States which cover 
your product categories. If you decide to exhibit, 
let the show's organizers know that you want to 
meet foreign buyers. Even if you don't take 
exhibition space, consider visiting the event. Find 
out if there's an international visitors' lounge and 
what foreign buyers are registered to attend. You 
might be able to do business. (More about this 
aspect in chapter XI. ) 

4. Develop your sales plan! 

TO SUM UP. If you've been successful in U.S. 
department stores you might be able to sell to 
foreign department stores who buy in the United 
States. The largest have their own buying offices; 
>thers use resident buying offices. Selling them is no 

ifferent from selling to a U.S. department store. 

hrough personal contact, you may become a regular 

resource". 



THE TOP SELLERS: CONSUMER 
GOODS WHICH DO BEST IN 
FOREIGN DEPARTMENT STORES 

Many foreign department stores hold "Made in 
U.S.A. Week" promotions These promotions feature 
U.S. -made goods, and frequently are accompanied 
by heavy advertising and other merchandising supp- 
ort. The U.S. Department of Commerce helps foreign 
department stores hold such promotions. Here are 
the products which seem to do best in these 
promotions. 

1. Housewares: kitchen utensils, thermos bottles 
and picnic kits, folding carts. 

2. Appliances: refrigerators and small electrics such 
as blenders, portable mixers. 

3. Heat proof and fashion glassware. 

4. Towels, sheets, bedspreads, blankets, bath sets, 
drapes, table linens, rugs. 

5. Women's apparel: sportswear, dresses, lingerie, 
foundations, handbags, belts. 

6. Men's apparel: sportswear, slacks, jeans, shirts, 
underwear, leather belts and wallets. 

7. Children's apparel. 

8. Sporting goods: golf clubs, golfwear, football 
equipment and balls. 

9. Games, educational toys, tricycles. 

10. Cosmetics. 

11. Costume jewelry, hair accessories. 

12. Tapes, record racks, greeting cards. 



CHAPTER XI 



SELLING THE FOREIGN BUYER WHEN HE VISITS THE UNITED 

STATES 

This chapter will be useful to companies which market all types of goods. 



FOREIGNERS COME TO BUY. Foreign busi- 
nessmen come to the United States for a variety of 
reasons. Some come to call on regular suppliers. 
Some come to sell as the United States is the 
world's leading importer. But many come to buy 
from new resources. These businessmen may 
represent a manufacturer who wants to buy 
equipment or components for his factories, or the 
buyer may be in business for himself. He may be an 
importer or a sales representative looking for new 
lines. 

Some foreign buyers arrange their trip to coincide 
with an important commercial event: a trade show or 
industry convention. The more sophisticated visitor 
sets up his itinerary before leaving his country. If he's 
looking for new suppliers, he often asks U.S. State 
Department officials in his country to help him. U.S. 
product directories are an important source of sup- 
plier information. Most American embassies have 
commercial libraries that subscribe to the important 
ones. Make sure that your products are listed in ap- 
propriate directories (see Chapter XIII). There is 
little you can do to make a foreign businessman visit 
your company, but you can take the initiative in 
meeting buyers face-to-face when they come to U.S. 
trade shows. 

HOW THEY BUY. A few foreign visitors will buy 
on the spot. They'll even arrange to pay, from a U.S. 
bank account, and take delivery in the United States. 
In this case, your "export" is handled like a domestic 
sale. Unfortunately, this is a rare event. Many buyers 
will place orders, but they'll want you to ship to a 
foreign destination, and pay you from a foreign bank 
account after receipt of the goods. (This type of 
transaction is covered in PART II.) Some, however, 
will not place orders until they've had time to 



evaluate products and suppliers, most likely after 
they've left the United States. 

IMPORTANCE OF TRADE EVENTS. Some 500 
annual U.S. trade shows and conventions attract 
foreign visitors. For example, the International 
Petroleum Exhibition features the latest oilfield 
equipment of both U.S. and foreign companies. 
Thousands of oil industry executives attend the show; 
400 foreigners were registered as visitors at the 1976 
exposition. A comprehensive list of all U.S. trade 
events is published each year by the U.S. Travel Serv- 
ice, an agency of the U.S. Department of Commerce. 
Their Directory of the United States Trade Shows, 
Expositions, and Conventions identifies those shows 
that encourage foreign visitors' attendance. Write: 
U.S. Travel Service, U.S. Department of Commerce, 
Washington, D.C. 20230. Ask for the current edition. 



THE U.S. GOVERNMENT HELPS FOREIGN 
BUYERS. The U.S. Government helps foreign 
buyers locate U.S. suppliers. As mentioned above, 
American embassies have commercial libraries which 
the foreign businessman can consult prior to his U.S. 
trip. And the Commerce Department, through its 
Foreign Buyer Program (FBP), helps buyers get in 
touch with U.S. companies. 

Here is how the FBP works. 

1. Help for the individual buyer. U.S. State 
Department personnel advise the U.S. Commerce 
Department about foreign buyers who want help 
in making appointments with U.S. suppliers. FBP 
officials can identify U.S. suppliers who want to 
meet the buyer. Once the foreign businessman 



GO MEET THEM: FOREIGN BUYERS ATTEND THESE SHOWS 

Each year from ten to twenty U.S. trade shows are targeted by the U.S. Department of Commerce's Foreign 
Buyer Program (FBP) to stimulate foreign buyer attendance and to arrange meetings between foreign buyers 
and U.S. suppliers at the event. Here are the FBP shows in 1976.* 



McCormick Place 
Chicago 

Intl. Amphitheater 
Chicago 

Civic Center 
San Francisco 

Astrohall 
Houston 

McCormick Place 
Chicago 

McCormick Place 
Chicago 

High Point, N.C. 

McCormick Place 
Chicago 

Dallas Convention 

Center 

Dallas, Texas 

Hynes Memorial Auditorium 
and Sheraton Boston 
Hotel, Boston 

Tulsa Exposition Center 
Tulsa, Oklahoma 

McCormick Place 
Chicago 

Atlantic City 
New Jersey 

Greenville, 
South Carolina 

McCormick Place 
Chicago 

McCormick Place 
Chicago 

These are an indication of the type of show chosen. The same ones are not necessarily picked for 1977 and 1978. 



January 12-16, 1976 
January 9-14, 1976 
January 18-21, 1976 
February 1-5, 1976 
February 5-8, 1976 

April 5-8, 1976 

April 28-30, 1976 
April 5-8, 1976 

May 2-5, 1976 
May 10-13, 1976 

May 17-21, 1976 
September 8- 17, 1976 
October 10-14, 1976 
October 2 1-29, 1976 
October 25-29, 1976 
December 6- 10, 1976 



NATIONAL HOUSEWARES EXPOSITION 

THETRANSWORLD HOUSEWARES 
& VARIETY EXHIBITION 

NATIONAL EXPOSITION FOR 
FOOD PROCESSORS 

CONCRETE & AGGREGATE SHOW 

NATIONAL SPORTING GOODS ASSN. 
47TH ANNUAL CONVENTION 
AND SHOW 

NATIONAL MATERIALS HANDLING 
SHOW 

SOUTHERN FURNITURE MARKET 
DESIGN ENGINEERING SHOW 

SUPER MARKET INSTITUTE SMI 
CONVENTION AND EDUCATIONAL 
EXPOSITION 

ELECTRO '76 (COMBINES IEEE/ 
INTERCON AND NEREM). 

INTERNATIONAL PETROLEUM EXPOSITION 
(IPE-ENERGY '76) 

INTERNATIONAL MACHINE TOOL 
SHOW (IMTS-76) 

FOOD & DAIRY EXPOSITION '76 

AMERICAN TEXTILE MACHINERY 
EXHIBITION-INTERNATIONAL 

PACKAGING WEEK/USA EXPOSITION 
& ASSEMBLY 

NATIONAL PLASTICS EXPOSITION 



arrives, FBP officials can arrange appointments 
with U.S. companies. Since its inauguration in 
1974, the FBP has helped several hundred foreign 



a. The FBP stimulates foreign buyer attendance. 
The show organizers must set up a meeting 
place where buyers and sellers can meet. 



given to the U.S. exhibitors. They are also 
available to nonexhibitors. 

e. FBP officials attend the show to help arrange 
meetings between foreign visitors and U.S. sup- 
pliers. The box on page 84 lists FBP-sponsored 
trade events in 1976. 

3. Help with specialized buying groups. The Foreign 
Buyer Program also helps groups of foreign 
buyers, usually in connection with a trade show or 
convention. FBP officials suggest itineraries and 
help set up supplier appointments. 

Example: 19 executives with Dutch automotive sup- 
ply firms were assisted by FBP. Potential suppliers 
were identified, appointments were made, and 
executives got red-carpet treatment while in the 
U.S. Results: $100,000 in on-the-spot orders. 



TO REVIEW: HOW TO TAKE ADVANTAGE. 

Thousands of foreign buyers visit the U.S. annually. 
Most establish their own inflexible itineraries. 
There's little a U.S. company not on their schedule 
can do. But some foreign buyers has visited shows or 
have asked the U.S. Government for help in locating 
suppliers. A U.S. company can do some things to 
increase their chances of meeting these buyers. 

1. Register with Commerce's Foreign Buyer Pro- 
gram. This simply requires you to send 
information about your firm and product. It will 
be kept on file if a foreign buyer inquires about 
potential suppliers of products like yours. Ask 
also to be placed on the mailing list to receive lists 
of U.S. shows selected for the Foreign Buyer Pro- 
gram. Write: Foreign Buyer Program, U.S. 
Department of Commerce, Washington, D.C. 
20230. 



2. If your firm exhibits at a trade show, tell the 
show's organizer that you want to meet foreign 
buyers. 

3. If you plan to visit a trade show, check to see if 
Commerce's Foreign Buyer Program has targeted 
it for their special efforts. If so, tell the Com- 
merce's Foreign Buyer Program in advance of 
your plans to attend the show, and your interest in 
seeing foreign buyers. 

4. As. mentioned above, some foreign buyers will 
place orders which call for shipment to a U.S. 
location and which will be paid for in the United 
States. However, many foreign buyers may not 
want to offer these terms. Don't turn them away. 
First, see if they'll change their minds after you've 
explained your lack of experience in exporting to 
foreign locations. Many will then adapt to your 
wishes. (If they're unwilling and you still want the 
business, transactions of this type are covered in 
PART II of this handbook.) 



TO SUM UP. Thousands of foreign buyers visit 
the United States each year. Many are prepared to 
place orders, take delivery in the U.S., and pay for 
the goods from a U.S. bank account. In some 
cases, buyers have set up their appointments prior 
to their departure. They have no interest in seeing 
potential suppliers. In other cases, foreign buyers 
want to meet new suppliers. They often identify 
these buyers from U.S. Buyers Guide and 
directories. They ask for help from the U.S. 
Department of Commerce in meeting potential 
suppliers. U.S. firms that want to meet foreign 
buyers can register their interest with the Com- 
merce Department. 



CHAPTER XII 



SELLING TO U.S. BUYING OFFICES OF LARGE FOREIGN FIRMS 



This chapter will be useful to suppliers of industrial goods. 



The previous chapter discussed how foreign buyers 
make short trips to the United States to locate sup- 
pliers. Some big foreign firms buy such large amounts 
of U.S. goods, they have their own U.S. buying 
office. Or they "hire" an independent U.S. -based 
company which specializes in purchasing for foreign 
companies. Foreign firms might: 

1. Establish their own branch office which does 
nothing but purchase U.S. goods. (This is 
relatively rare.) 

2. About a thousand foreign firms now have U.S. 
factories. Firms who need U.S. products in their 
home country frequently ask their U.S. affiliates 
to do the purchasing. 

3. Many firms use independent U.S. companies who 
specialize in purchasing for export. Some may be 
"export merchants" who will buy from the U.S. 
supplier and resell to the foreign company. Others 
work more as buying offices (as described in 
Chapter X). These firms do not take title to the 
goods. They are paid a fee (or commission) by 
their foreign customer. 

PURCHASING PATTERNS VARY. Becoming an 
approved supplier to a foreign buying office may be a 
time-consuming process. Sales may come slowly. On 
the other hand, purchasing may be simple and 
straightforward. 

Some firms will ask for delivery in the United 
States; they will pay you from their U.S. bank acc- 
ounts. Others may ask to pay from abroad. (These 
transactions can be arranged so that payments 
actually are made through a U.S. bank. For 
information, see PART II of this handbook.) Even in 
this latter case, buying offices in the United States 
often help to arrange the transaction. So normally, 
this type of a sale is just like selling a U.S. customer. 



THE SIEMENS STORY. The brief description of 
Siemens of Germany which follows illustrates this 
point. Siemens, with worldwide sales exceeding $9 
billion, is the fifth largest electronic company in the 
world. Siemens has 50 plants in Germany. Five of its 
51 foreign plants are in the United States. Siemens 
has established its U.S. corporate offices in Iselin, 
New Jersey. Purchasing for Siemens' five U.S. plants 
is done here. It also purchases U.S. -made goods for 
Siemens' other operations. Most often, Siemens in 
Germany specifies the supplier. 

One purchasing executive states, "We either buy 
from the supplier who's been specified, or we'll scout 
the market for an equivalent or better product at a 
better price." Information is forwarded back to the 
German requisitioner for their decision. Purchasing 
officials at Siemens' U.S. corporate offices also keep 
close tabs on the U.S. market for new products not 
likely to be known by Siemens in Germany. They're 
helped in this search through subscriptions to several 
U.S. electronics trade magazines. They also use 
Buyer Guide directories and visit electronics industry 
trade events. Once the purchasing decision is made, 
Siemens' U.S. corporate offices place the order, take 
delivery, and arrange for payment to the U.S. sup- 
plier. 

TIPS ON TAPPING THIS MARKET. Foreign 
firms that buy through offices in the United States 
often look for new suppliers. Thus, there's a chance 
you'll be contacted if you are listed in appropriate 
Buyer Guides (see Chapter XIII for a discussion of 
Buyer Guides). You may not realize it but one or 
more of your customers may be a subsidiary of a 
foreign firm. Thus, you may already be "exporting" 
to their parent corporation. 

This segment of the U.S.-for-export market is 
.difficult to identify. There is no convenient listing of 



1 1*4. f P " 



addresses, and telephone numbers of 1,000 
U.S. manufacturing subsidiaries of 700 foreign 
firms. Also indicated are products made. Not 
all, of course, will have a purchasing 
department that buys U.S. goods for export 
back to their parent companies. A good 
business library should have this directory. 
Otherwise, it's available ($7.50) from the 
Institute of International Business, Georgia 
State University, 33 Gilmer Street, S.E., 
Atlanta, Georgia 30303. 

b. List of Foreign Firms with Some 
Interest/ Control in American Manufacturing 
and Petroleum Companies in the U.S. This free 
directory lists U.S. subsidiaries of foreign 
firms. Contact: Office of International Finance 
and Investment, U.S. Department of Com- 
merce, Washington, D.C. 20230. 



2. Contact those firms that seem to be in your field. 
Tell them about your interest in supplying your 
product for export to their parent company. Ask if 
they buy for the parent company. And if not, if 
they know how it's done. (This approach might 
even uncover new domestic customers!) 



3. Be on the lookout for inquiries from U.S. 
subsidiaries of foreign firms or from their U.S. 
buying offices. If the foreign firm wants delivery to 
a foreign location, and if they want to pay from a 
foreign-based account, explain your inexperience 
in handling these details. Request shipment to a 
U.S. location, and payment from a U.S. account. 
They may agree. This situation is covered in detail 
in PART II, "Developing Your Own Export 
Expertise." 

TO SUM UP. Many large foreign firms who buy 
substantial volumes of U.S.-made products either 
have their own U.S. purchasing offices or use the 
services of "resident" buying offices. Unfortunately, 
there's no precise listing for these firms, nor an es- 
timate of the size of this specialized U.S.-for-export 
market. Most firms actively seek U.S. suppliers. 
There's little a U.S. firm can do to mount an aggres- 
sive marketing campaign to reach them. But if a U.S. 
company gets "export" orders from (or on behalf of) 
these firms, then shipments and payments will be 
similar to what goes on with U.S. customers. 

Foreign firms with U.S. subsidiary companies are 
listed in various directories. Approaching these com- 
panies about the potential for "export" of goods to 
the parent company may uncover business oppor- 
tunities. 



CHAPTER XIII 



THE U.S.-FOR-EXPORT MARKET REVISITED 



This chapter will be useful to virtually all new-to-export firms. 



A LARGE MARKET: MANY DIFFERENT 
SEGMENTS. Probably one of every three export 
shipments leaving the U.S. destined for any one of 
the more than 100 foreign markets was actually 
sold or specified in the United States. For the 
most part, the U.S. supplier did not have to worry 
about export shipping details. The goods were 
delivered to a U.S. location. And the U.S. supplier 
was paid from a U.S. bank account just like other 
domestic businesses. The preceding chapters have 
discussed the 11 segments that comprise this U.S.- 
for-export market. 

Most buyers (or specifiers) don't wait for U.S. sup- 
pliers to contact them. They actively seek out present 
and potential suppliers. Some ways in which these 
buyers locate suppliers include: 

1 . Buyer Guides. Purchasing executives rely on a host 
of general and specialized directories which list 
suppliers for specific product categories. 
Directories range from comprehensive general 
catalogs such as Thomas' Register, a listing of 
100,000 U.S. manufacturers categorized by 80,000 
products, to specialized guides covering a 
particular industry such as the air-conditioning 
industry. 

2. Trade Publications. Firms who purchase or specify 
for export frequently subscribe to specialized 
industry publications. These magazines announce 
new products, discuss product applications, and 
contain supplier advertisements all potential 
sources of information for the purchasing 
executive. 

3. Trade Events. Buyers may attend trade shows, and 
conventions, to get information about products 
and suppliers. 

U.S. suppliers should make sure they are to be 
listed in appropriate directories; they should consider 

na in IraHp. nnhlir.atinns' and thp.v sVmnlH 



directories. Most guides list all firms in a particular 
industry, or for specific product categories. Listings 
in some guides are free; others cost a nominal 
amount. Most will also sell advertising space, or offer 
an opportunity to include additional information in 
the firm's listings at a modest fee. 



DIRECTORY EXAMPLES. The best known and 
used Buyer Guide is the telephone company's Yellow 
Pages. However, they're generally limited to services 
and supplies. One well-used guide to industrial pro- 
ducts is Thomas' Register, a six-volume directory 
containing over a million listings of sources for 
80,000 product classifications. Purchasing executives 
at most large firms are subscribers. Thomas' Register 
is also found in the commercial libraries maintained 
in U.S. Embassies and Consulates abroad, where 
foreign businessmen interested in locating U.S. sup- 
pliers may refer to them. 

An example of a specialized industry directory 
published by a trade magazine is the annual directory 
issue of Air Conditioning, Heating & Refrigeration 
News. This directory lists 12,000 suppliers 
(wholesalers as well as manufacturers) of over 7,000 
air conditioning and refrigeration components and 
services. The Marketing Directory of the weekly 
magazine Aviation Week and Space Technology lists 
suppliers for 2,000 different products. 

Most guides pride themselves on being com- 
prehensive. Thus, they may solicit your listing. And, 
if you are not listed, they'll welcome your inquiry. 



TIPS ON GETTING LISTED. Listing in appro- 
priate guides is a must for those firms who seek U.S.- 
for-export business. 

1. Identify the most important general and specializ- 
ed Buyer Guides covering your industry. The box 
on page 57 suggests sources for identifying such 



EXHIBITING AT TRADE EVENTS. A popular 
way to attract new customers and cement 
relationships with old ones is to exhibit your products 
at a trade show. Many attract foreign as well as U.S.- 
for-export buyers. Some events generate more 
interest than others. As a general rule, a major trade 
show or convention geared to an industry doing a 
thriving export business will attract both foreign and 
U.S.-for-export buyers. If your company exhibits at 
these events, you can take action to help attract the 
U.S.-for-export buyers. 

1 . Alert your personnel attending the event to look 
out for U.S.-for-export buyers. 

2. Find out from the event's organizers if special 
efforts are being made to attract export buyers. If 
so, register your interest. 

3. Insure you are listed in the trade show's catalog. 
These are used as supplier guides long after the 
event. 

Even if you're not an exhibitor, you might still be 
able to meet export buyers seeking products similar 
to yours. Find out (preferably in advance of the 
event) if there's to be a foreign visitors' lounge and 
whether a list of export buyers will be published. 

TO SUM UP. So far, we've covered the large but 
frequently overlooked U.S.-for-export market. It's 
possible for you to develop an "export" business 
without leaving the United States, and you won't 
need any special export expertise. Shipments gener- 
ally are made to a U.S. location. Thus, the seller 
doesn't have to worry about export details. You will 
get paid from a U.S. bank. 



THESE SOURCES CAN SUGGEST BEST 
BUYER GUIDES 

Make sure you are listed in appropriate Buyer 
Guides if you want foreign business. Most firms will 
know from experience what major directories cover 
their industry. But if you do not, here is how to 
identify potential Buyer Guides in your field. 

1. Trade Associations. Association executives in your 
industry can provide a listing of important Buyer 



Guides. Associations themselves often publish 
product directories. 

2. Trade Magazines. Editors of industry magazines 
in your field can recommend guides. Their magaz- 
ines, too, are likely to have supplier listing issues. 

3. The U.S. Department of Commerce Industry 
Specialists. The Commerce Department assigns 
officials to follow practically every U.S. industry. 
They are generally willing to identify appropriate 
guides. (They also can identify important trade 
associations, industry magazines, etc., as well as 
provide a wealth of other information about your 
industry.) Write them: Bureau of Domestic Com- 
merce, (BDC) U.S. Department of Commerce, 
Washington, D.C. 20230. Or telephone (202) 377- 
2000. Ask for the specialist who follows your 
industry. 

4. Specialized Directories. Directories of directories 
even exist. Guide to American Directories lists 
1,500 directories, identifying for each the audience 
it tries to reach. It's probably available in most 
business libraries. Published by: B. Klein 
Publications, Inc., Rye, New York 10580. Trade 
Directories of the World lists U.S. and world buyer 
guides by industry category. Subscriptions are 
available ($25) from Croner Publications, Inc., 
Queens Village, New York 1 1428. 



You may be happy just with this export market 
segment. You may not want, or have the resources, to 
do more in export than this. But some firms may 
want to do more. 

PART II of this handbook gives guidance on 
developing an export business through selling to 
customers located abroad. There will be oppor- 
tunities to get profitable business if you're willing 
to ship to the foreign locations, and if you're willing 
to accept export payment arrangements. You'll have 
to get involved with the "paperwork" of export, and 
you'll have to become familiar with some of the 
specialized vocabulary of export. 

Specialists in District Offices of the U.S. 
Department of Commerce can provide guidance. See 
listing on in side back cover. 



PART TWO 



DEVELOPING YOUR OWN 
EXPORT EXPERTISE 



PART TWO serves as a guide to assist firms develop their own expertise in the field 
of exporting. This portion of the handbook is divided into three sections each 
geared to a specific thrust of foreign market operations. A brief introduction 
precedes each section, explaining the chapters included therein. 



SECTION A 



HANDLING INQUIRES, QUOTATIONS, SHIPPING, AND PAYMENTS 



3TENTIAL FOREIGN CUSTOMERS. No 

atter what your product, chances are you'll get 
ters from foreigners asking for information or 
en enclosing orders. Most U.S. firms ignore these 
quiries. They are uncertain of how to handle exp- 
ts. Others treat the inquiries like those from U.S. 
stomers and end up making costly mistakes. A few 
dize that with a little knowledge, profitable sales 
n be made. 

This part of the handbook is for those firms that 
int additional business without having to spend a 



lot of time and money in getting it. It describes how a 
firm can handle inquiries, prepare quotations, ship 
goods, and get paid. 

A BIG BUDGET UNNECESSARY. While you 
won't be building a big export business in this stage, 
you won't be spending a lot of money or time. It 
won't hurt your cash flow (in fact, it might even help 
it), and you won't have to hire specialists. The export 
sales you do make will be profitable. And remember, 
most successful exporters started this way. 



CHAPTER I 



WHAT TO DO WHEN YOU GET INQUIRIES FROM ABROAD 



INTRODUCTION. U.S. companies export because 
it is profitable. But if you ask their managements ab- 
out the background of their first order, they usually 
will reply "we received a query (letter) from a foreign 
firm.'" More U.S. companies become exporters 
because they get inquiries from foreign firms than for 
any other reason. Knowing what to do when you 
receive a foreign letter may be the key to starting a 
thriving export business. 

HOW FOREIGNERS HEAR ABOUT YOU. A 

businessman abroad may already know of your pro- 
duct. Here's how: 

1 . A foreign businessman may see your listing in a 
U.S. Buyer's Guide Directory. Many foreign 
firms, particularly sophisticated ones, either buy 
these guides or get one from a friend in the States. 
Other foreigners may use the guides on file in 
American Embassy libraries. 

2. A foreign businessman may see your 
advertisement or read about your company in an 
American magazine. Many U.S. magazines have a 
large foreign circulation. For example, Chemical 
Week has 8,000 readers outside the United States, 
15% of its total circulation. 

3. Your product may already be abroad and you 
may not even know it! Even if you haven't ex- 
ported, somebody else may have shipped it 
overseas. How did your product get there? Many 
foreigners come to the United States some to 
buy or sell, others are tourists. They may buy your 
product and ship it home. Also, don't forget that 
25,000 foreign students go to American colleges. 
Many are children of prominent businessmen 
abroad. They often act as "the eyes and ears" for 
their family's firm on new U.S. products and sup- 
pliers. 



WHAT SORT OF INQUIRIES? Most, but not all, 
foreien letters will be in Enslish. Some will be in a 



WHAT TO DO WITH LETTERS IN A FOREIGN 
LANGUAGE. You have several options. 

1. File it. This may be your wisest choice, 
particularly if you do not plan a deep involvement 
in export. Chances are the inquiry won't lead to 
business. A serious customer would write in 
English. 

2. Send the letter back with a note that your firm 
only corresponds in English. If the foreigner is 
interested, he will have his original letter 
translated and send it back. 

3. Translate the letter. (More about this on page 64). 

WHAT ARE INQUIRIES LIKE? Some firms will 
want to use your product. Others will want to sell it in 
their market. Both will want product and price 
information. You will be asked for samples if you 
make consumer products. Some firms may know 
your product and want to place an order. They will 
want delivery dates and estimated shipping costs 
perhaps on your product delivered to a U.S. port or 
to a location in their country. However, other letters 
could be from individual businessmen who act as 
sales agents similar to manufacturer's 
representatives. They usually sell on commission 
only. 



LETTERS FROM THE GENERAL PUBLIC. 

Some letters will be from individuals. Remember, 
most of them do not have any prchasing power 
students, housewives, or would-be entrepreneurs. 

OUR ADVICE. Obviously you won't pay much 
attention to letter writers who can't buy from you, 
such as would-be entrepreneurs or poorly financed 
importing firms. Without export experience, try to 
confine your sales efforts to firms that can take 
delivery in the United States,' and that agree to pay 
on a cash-in-advance or cash-on-delivery basis, or on 
the same terms vou use with U.S. customers. And, at 



ESTABLISH A POLICY. After receiving an 
inquiry, the following is our suggestion on what to do 
in this initial stage: 

1. Reply to all letter writers except to those who 
obviously won't turn into customers. Why corre- 
spond if no business will come from your letters? 

2. State your policy on export in your initial letter. 
Do not be bashful about your new-to-export 
status. 

3. Enclose information on your product. (See page 
??? for a sample letter on how to reply to foreign 
inquiries.) 

4. Set up a file for foreign letters. They may turn into 
"live" prospects as your export business grows. 
Or, if you contract a specialized export middleman 
to arrange your export sales, he'll use the file. 

WRITE AIRMAIL! Sea mail can take weeks, even 
months. Airmail takes only days. A sea-mail letter to 
Sidney, Australia may take 2 months to arrive. By jet 
it will take only 4 days. Note: your postage costs will 
vary depending on the destination. An airmail letter 
to Africa or Asia will cost more than one to Europe 
or Latin America. Special tip: if a foreign firm's letter 
shows both a street address and post office box, write 
to the P.O. box. Mail delivery in some countries is so 
unreliable that even important firms prefer to have 
mail sent to their post office box. 

TO SUM UP. Many U.S. firms get inquiries from 
abroad without seeking them. The new-to-export 
firm should note that: some of these letters may lead 
to "easy" sales. Some foreign customers will accept 
delivery in the United States and will pay either on a 
cash-in-advance basis or on delivery. 



Spanish, French, Italian, or German the major 
commercial languages abroad? If you aren't ready for 
a concentrated export effort, we recommend a reply 
in English. Apologize for your lack of response in 
their language, and ask them to translate their letter. 
If you're interested in developing your exports, 
letters can be translated, but don't do it yourself. You 
may be able to puzzle out a letter for yourself, but 
you're likely to miss an important word or two. Here 
are some suggestions: 

1. Check with your bank. If it has an international 
department, 1 it will be able and willing to 
translate your letter. 

2. Contact the U.S. Department of Commerce's 
District Office closest to you. Its international 
business specialist may suggest a "free source," or 
give you the names of commercial translation ser- 
vices. A list of addresses is given on page inside 
back cover. 



YOUR BEST BET: A COMMERCIAL 
TRANSLATION SERVICE. You'll find translators 
in every U.S. city. They handle every type of 
document from single-page letters to contracts with 
complicated engineering specifications. Charges for 
common commercial languages such as Spanish, 
German, Italian, and French average $6.00 per 
hundred words, usually with some minimum charge. 
A Washington, D.C., translation company charges a 
flat $10 to translate a one-page letter. Check the yel- 
low pages of your telephone directory for a list of 
translation firms or ask the nearest Commerce 
Department District Office for its suggestions 2 . Aftoi 
translating the inquiry, you may find it's an "easy-to- 
sell" inquiry! 



'A later chapter discusses handling inquiries that call for 
foreign delivery. 



WHAT IF LETTERS 

ARE IN A FOREIGN 

LANGUAGE? 

Most Americans can't read or write another 
language. So what to do if you get inquiries in 



'Of the 14,000 commercial banks in the United States, some 
300 have international capabilities. 

2 The American Translation Association has a Professional 
Service Directory. It lists 700 firms which have all passed a 
special translation competency test. A good business 
library should have it (or contact them at P.O. Box 129, 
Croton-on-Hudson, New York 10520.) 



YOUR COMPANY, INC. 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 



(A "general" reply to a foreign Inquiry 
for a new-to-export firm) 

April 1, 197- 



BC, Refrigeration 

500 Pembridge Crescent 

3ndon, MK 46 4BN England 

entlemen: 

hank you for your letter dated (name date). We have enclosed information 
escribing our products. 

ur firm is interested in supplying you with our products. However, we are 
2w to international business. For now, our policy is as follows: 

1. All foreign orders must be shipped to a destination in the United 
States. 

2. Payment in dollars must accompany orders. Our terms are (name terms) 
for customers with satisfactory credit ratings who can arrange payment 
from a U.S. bank account. 

3. All correspondence must be in English. 

2 regret if this policy causes you inconvenience. Our U.S. market is growing 
) fast we must postpone our plans to sell outside the United States except 
ider the conditions outlined above. 

jr products have wide acceptance in the United States. Some of our customers 
iclude (name customers). 

2 look forward to your reply. 

Sincerely, 



CHAPTER II 



HOW TO HANDLE THE "EASY-TO-SELL" INQUIRY 



INTRODUCTION. Many U.S. firms have no time 
for export as they are busy taking care of U.S. 
customers. However, some foreign customers will 
accept delivery in the United States. Some will pay 
you cash in advance or from a U.S. bank account on 
delivery. This is "plus business." As you can get it 
with little additional expense, this is the "easy-to- 
seil" inquiry or letter. In this chapter we will discuss 
how to recognize one and how to convert it to a sale. 

HOW TO RECOGNIZE AN "EASY-TO-SELL" 
INQUIRY. Here is what you should look for to 
determine if you have an "easy-to-sell" inquiry that 
will turn into a firm order. 

1. The letter must be in English. 

2. It will ask for price and delivery information. It 
"looks like" it will lead to an order. 

3. It calls for shipment to a U.S. location. 

4. Most likely this type of letter will come from a 
large foreign manufacturer, perhaps an oil 
company, a large buying cooperative, or from a 
foreign government. It indicates you will be paid 
from a U.S. bank account. See page 67 for an 
example of an "easy-to-sell" inquiry. 

CANADA AND PUERTO RICO ARE SPECIAL 

CASES. Inquiries from Canada and Puerto Rico 
could be "easy-to-sell" inquiries even if they request 
shipments to the customer's plant or warehouse and 
even if payment will not be in the United States. 

Puerto Rico. U.S. firms shipped $2.9 billion worth 
of goods to Puerto Rico in 1975. Puerto Rico is not a 
foreign country but a U.S. territory. Doing business 
in Puerto Rico is much like doing business in the 
United States. English is used in business; the U.S. 
dollar is the official currency and many "mainland" 
companies have Puerto Rican branches. 

Canada. U.S. firms exported over $11 billion last 
year to Canada, our largest "export" market. Doing 
business in Canada is also like doing business in the 



Canadian to U.S. dollars. Large Canadian firms 
usually keep U.S. dollar accounts. You will have few 
problems in shipments to Canada. The Canadian 
government imposes duties (special taxes) on most 
U.S. goods. However, duty payment is your 
customer's responsibility. 



HOW TO REPLY TO AN "EASY-TO-SELL" 
INQUIRY. The "easy-to-sell" inquiry comes in 
English. You will reply in English, quoting your 
product price at your factory plus the shipping cost 
delivered to a U.S. location. You will also ask for 
payment with the order provided you are satisfied 
the foreign firm meets your credit requirements (this 
is very important!). If the firm follows up with an 
order and a check, you have no risk. If the company 
prefers to pay on delivery or with your regular ship- 
ping terms, you want to make sure they can pay their 
bills. 

HOW TO ANALYZE A FOREIGN LETTER. A 
letter's appearance can often give you clues as to the 
firm's importance. Watch for these points: 

1 . Is the letter typed? If it isn't, chances are it will 
never be an "easy-to-sell" inquiry. 

2. Is it on a business letterhead? Letters from 
individuals or "firms" without business 
letterheads hardly ever result in orders. They 
usually indicate "catalog collectors." 

3. Does the letterhead have a telex and/or cable ad- 
dress, bank references, etc.? If these items are 
missing, it probably will not be an "easy sell." 



THE FOREIGN BUSINESS 

TFTTFRHFAn 



ABC REFRIGERATION CO., LTD. 

Post Office Box 25 / 1500 Pembridge Crescent / London, MK 46 4BN England 

ftltphone: 01-355-1414 Banks: Union Bar 

ftlex: 825540 British Ban 

Cable: ABCREF 



(A sample of an " easy- to-s ell" inquiry from abroad) 



Reference: 12-76 



Your Conpany, Inc. 

Ill Main Street 

Hometown, Virginia 22101 

U.S.A. 

Gentlemen: 

We understand YCI manufactures ice nachines. Please quote your best price and 
delivery for three (3) of your Model 3L ice making machines, shipped to our 
agent in New York, John A. Day and Company. 

Upon receipt of this information, we will instruct our agent to place an order 
with you for these nachines. Upon shipment, we have arranged to issue you a 
check, in full payment, drawn upon the International Bank and Trust in 
New York. 

We need this equipment immediately for our production line. We look forward 
to your quick reply. 

Sincerely, 



R. E. Jones 
Managing Director 



breviation "Inc.," for incorporated. Here's what to 
look for in various countries. 



Country 



Equivalent to 
to "Inc." 



Canada, United Kingdom Ltd. 

Germany, Austria A.G. 

France, Italy, Spain, 

Portugal, Latin America S.A. 

Sweden A.B. 

Japan K.K. 

If the firm's country is not included in its address, 
this means it is using a "domestic" letterhead and is 
one indication of no international business 
experience. 

CABLE ADDRESS. Sophisticated world traders 
generally list a cable 1 address. This is a "code" often 
letters or less registefed with the telegraph office that 
stands for the firm's name and address. If you want 
to cable the firm, just use the cable address. It's a 
"short cut" to save you money. 

LOOK FOR TELEX ADDRESS. Experienced 
companies also have a Telex address listed on the 
letterhead. Telex is another means of transmitting 
messages. "Calling" a firm by Telex requires 
knowing their Telex address a series of numbers not 
unlike a firm's telephone number. Note: firms that do 
not have a cable or Telex address on their letterhead 
probably aren't experienced internationally, and may 
not be able to accept delivery of products in the 
United States. 

OTHER INFORMATION. Other letterhead 
information to look for: A firm with branch offices in 
many cities or countries might list them on the 
letterhead. Banking references might also be inc- 
luded. Look for the firm's founding date. Importers 
will frequently list foreign manufacturers and/or the 
brand names which they represent, an excellent 
source to check if you recognize a U.S. name. 

CHECKING ON THE FOREIGN FIRM. You can 

eliminate many foreign inquiries through a quick 
analysis of their letter and their business letterhead. 
On the ones that survive your first cut, you can easily 
check to make sure they are from substantial firms. 
One source: The U.S. Department of Commerce in 
Washington. It maintains files on 150,000 of the top 
importing organizations throughout the world. If it 
doesn't have a file on the firm, proceed with caution! 



mendations come in special World Traders Data 
Reports (WTDR's). However, you can find out if 
there is a WTDR on the company that wrote to you. 
Call (202) 377-2000 and ask for the WTDR section of 
the Bureau of International Commerce. If the 
WTDR Section has a firm on file, ask if you should 
do business with this particular firm. If the answer is 
"yes" you are almost sure that it will pay its bills. If 
the firm is not on file, you may want to request a rep- 
ort (it costs $15 and may take 30 days), or you may 
check other sources. They're listed below on this 
page. 

TIPS ON SENDING LETTERS. All your letters to 
foreign firms should follow the three "P's" of 
international business correspondence: Be Precise, Be 
Prompt, and Be Polite. Here are some specific tips on 
letter-writing which will help you develop business. 

1. Respond immediately to an "easy-to-sell" inquiry. 
A tardy reply may cool his ardor for your product. 

2. Make sure your instructions are complete so that 
the customer can place an order without any 
further correspondence. 

3. Address mail accurately. Use airmail and double- 
check for the correct postage. 2 

4. Make sure your company address is listed on your 
envelope. If not, you won't get it back if anything 
goes wrong. 



2 Consider telephoning potential customers in Canada or 
Puerto Rico, and if language isn't a barrier, think about 
calling customers in other countries. Rates are not 
expensive. You can dial direct to Canada and Puerto Rico. 
And remember, you can accomplish much by telephone 
that you can't in a letter. 



SOURCES OF INFORMATION ABOUT 
FOREIGN FIRMS 



The following sources can help you evaluate a foreign 
inquiry. 

1. Fortune's 300 Largest Industrial Firms Operating 
Outside the United States: the world's largest 
industrial firms with estimates for their sales and 
profitability. A good business library will have this 
list available. (But remember, even the largest 
firms may be "slow payers.") 

2. Jane's Major Companies of Europe: the largest 
European companies, by industry. Reported for 



noranes snouiu nave 11. 

Europe's 5, 000 Largest Companies. Boucher, Ltd., 
publishes this directory of manufacturers and 
trading (export/import) companies. Again, only 
the largest business libraries are likely to have it. 

Commercial banks. Bankers have a vast amount 
of information on foreign firms, or they can easily 
get it. Banks with international departments 
usually have this information on tap. Other banks 
will get this information from larger U.S. banks or 
foreign banks with whom they regularly do 
business. (These are called "correspondent 
banks. 1 ') 

World Traders Data Reports (WTDR's). The 
U.S. Department of Commerce maintains reports 
on 150,000 foreign firms. They're available for $15 
apiece. If a firm isn't on file, the Commerce 
Department will get one for you. Contact: WTDR 
Section, U.S. Department of Commerce, 
Washington, D.C. 20230. 

Foreign embassies in Washington. The com- 
mercial (business) section of most foreign 
embassies have directories of firms located in their 
country. Some, but not all, embassies may be wil- 
ling to share this information with you. Inquire. 

HAT IF A "PRO FORMA INVOICE" IS 
iQUESTED? When you write to foreign firms 
it "look good," some will respond and ask for a 
3re formal price quotation, called a "pro forma 
/oice." It isn't a real invoice. It's only a quotation, 
t in an invoice format. You will rarely see one in 
mestic business, but they are frequently used in 
;ernational trade. A foreign firm will ask for a "pro 
"ma" because it wants to find out, in detail, what 
;y will have to spend to buy your product. Thus, 
jy will want the total cost including packing, U.S. 
mestic freight charges (from your factory to the 
rt), spare parts, sometimes even ocean freight, etc. 
iporters in Africa and Latin America may need 
'ro forma invoice" to comply with local import 
*ulations. 

3W TO PREPARE A "PRO FORMA." They're 
sy to do. First, list the price of your product on 
ur regular invoice form. Then print or type "Pro 
>rma Invoice" at the top. Be sure to include the fol- 
ving information. 

Your firm name and address. (It's probably 
printed on your invoice form.) 



4. A brief description of your goods. This is 
particularly important. 

5. Your terms of sale. (Cash in Advance? Cash on 
Delivery?) 

6. The total invoice amount, i.e., all charges which 
you are passing on to the customer for him to pay. 

See page ??? for a sample "pro forma" invoice. 

KEEP GOOD RECORDS. Doing business with 
customers around the world may call for special 
record-keeping. Here is a simple system that many 
exporters use. 

1. Assign a reference number to all price quotations. 
For example, some exporters use the year followed 
by the numver of the quote. Thus, "reference: 
76-13" would indicate the 13th quotation made 
in 1976. 

2. File correspondence alphabetically by foreign 
country. 3 If you anticipate a lot of correspondence 
with a specific firm, set up a separate file for it 
within the country file. 

3. Institute a correspondence followup system 
which will let you know what foreign letters 
haven't been answered." 

KEEP YOUR PROMISES. A good way to lose 
customers is to break promises. The biggest 
complaint from foreign importers about U.S. sup- 
pliers is a failure to ship as promised. Your first order 
is particularly important as it will shape your 
customer's image of you as a dependable or 
nondependable supplier. On a European trip to 
investigate the export potential for a group of 
minority-owned U.S. manufacturers, one sales 
executive reported no apprehension about their being 
minority owned. But importers were worried about 
the ability of these firms "to deliver" as none had any 
export experience. If you are new-to-export, you must 
take two extra precautions. 



The country may be omitted from the foreign firm's 
letterhead. Thus, experienced exporters staple envelopes to 
letters they receive from abroad. The envelope postmark or 
its stamp will identify the country. 
4 Old export hands indicate that a tardy reply isn't the only 
reason a foreign firm may not write back. Some may never 
have received your original letter perhaps it went by 
seamail or someone didn't use the correct postage. 



1. Do not make delivery promises you can't keep. then respond only to "easy-to-sell" inquiries. They 

2. If delays are inevitable, tell your customer wil1 be written in En g lish and most likel y wil1 lead to 
immediately and give him a revised realistic an order whlch Wl11 cal1 for shl P ment to a u - s - 
shipping date. location and payment from a U.S. bank. Don't waste 

much time on the others. Ignore those that come 

TO SUM UP. You'll get inquiries from foreign from housewives or students. "Easy-to-sell" leads 
businessmen about your product. If you're not may be few and far between, but they mean ad- 
interested in, or can't devote the time to exporting, ditional profits. 



CHAPTER III 



SHIPPING YOUR PRODUCT OVERSEAS 



INTRODUCTION. So far, we have concentrated 
on export sales that do not require shipment to a 
foreign location. However, many potential customers 
may be unable or unwilling to accept delivery in the 
United States. 

With little additional risk, you can accommodate 
them. But to do this you must learn and understand 
. the special "language of export," the various types of 
export terms. This chapter discusses the shipping 
terms common to export transactions, identifies ship- 
ping documents that may be needed, and describes 
freight forwarders specialists who can handle all the 
export shipping details at surprisingly low fees. A 
word of caution: thousands of U.S. firms ship their 
goods to foreign customers every day. Practically 
every transaction goes off without a "hitch." 
However, a few will be delayed or canceled because 
the exporter failed on his paperwork. So don't 
hesitate to ask for advice 

EXPORT SHIPPING TERMS. Understanding ex- 
port shipping terms becomes easier when you and 
your buyer understand two things. First, who 
absorbs the costs involved in shipping your goods 
from your loading platform in the United States to 
your customer's receiving dock in a foreign location. 
(The box on page below identifies ten possible costs 
of export shipment.) Secondly, who owns the goods 
at various physical stages of the export shipment. 1 



'Who owns the goods you or your customer is an im- 
portant question when damage, loss, or pilferage takes place 
on the long trip from your factory to his warehouse. 



TEN POSSIBLE COSTS IN AN EXPORT 
SHIPMENT 



Depending on the country and the mode of 
shipment (by sea or air) there are costs involved in an 
export transaction. In some cases they can equal or 
exceed the value of the goods! It is important to know 
who will pay these costs: you or your customer. And 
if vou have to oav those costs, vou'll want to recover 



1 . Export packing. Most shipments by sea call for 
special packing to protect the shipment from 
rough handling, pilferage, dampness, or 
humidity. 

2. Transportation costs from your factory to a sea 
or airport. These are called "inland" freight 
charges. 1 

3. U.S. and foreign port charges. There may be 
chagres for unloading or loading, ! or storing 
goods, or for dock space before they are loaded 
on a ship 

4. Customs documentation charges. Some foreign 
countries require special documents to identify 
the origin and/or value of the shipment. Some 
cargo, such as livestock, may require special 
inspection certificates. 

5. Freight forwarder charges. Most exporters use 
international freight forwarders to handle export 
shipping details. Their charges are nominal. The 
foreign customer may also use one to handle his 
imports. 

6. Freight costs to the foreign country. Foreign 
freight charges depend upon the type of com- 
modity, its weight, its volume, and its mode of 
transportation (sea, air, or truck). 

7. Insurance costs. Cargo insurance to cover the 
risks inherent in a long trip. 

8. Import tariffs (taxes). Foreign governments put 
tariffs on most imported goods either as a 
money-raising device or to protect local pro- 
duction. 

9. Transportation from the port in the customer's 
country to his warehouse. 

10. Financing charges. If banks help collect 
payment, or if they help finance the shipment, 
there will be fees and/or interest charges. 

'Railroads and truckers often have lower rates on export 



/\ wiae variety 01 snipping terms are used in me 
United States. Some firms sell their goods F.O.B. 2 
their factory or warehouse. The customer is 
responsible for all shipping costs from that point on. 
Some sell F.O.B. factory, freight allowed. The seller 
pays the freight. When goods are sold on a C.O.D. 3 
basis, the buyer does not get the goods until he pays 
for them. 

U.S. customers know where your factory is located 
and can easily arrange for shipping. However, your 
foreign customers are thousands of miles from you 
and are unfamiliar with U.S. geography. Thus, some 
may want a price for your goods at a location 
familiar to them. For example, some will want your 
price based on delivery of your goods to a U.S. or 
foreign pier, or to an airport. To make export trade 
easier, standard terms have been developed. The 
most important export shipping terms are as follows: 

1. Ex Factory: The price of goods waiting for the 
customer at your factory loading dock. The buyer 
owns the goods at this point, and bears all risks 
and costs in getting the products delivered to his 
warehouse abroad. 4 

Example: YCI, a manufacturer oficemakers, sells 
three units to a German firm "Ex Factory St. Louis, 
Missouri." The German firm pays all shipping costs 
needed to get the icemakers to its German location. 
(The U.S. firm will usually arrange for inland 
transportation.) 

2. F.O.B. (named point): The price at the place 
named. The named point can be anywhere agreed 
to by the buyer and seller. Points commonly used 
in export trade are a carrier (truck, rail car) beside 
the seller's factory, or a port location (example, 
F.O.B. truck, New York); a pier or vessel 
(example, F.O.B. vessel). 

Example 1: YCI, the U.S. firm, quotes F.O.B. 
truck at St. Louis, Missouri for the 3 icemakers. 
YCI must place the ice-makers on the truck (or 
deliver them to the trucking company); provide a 
domestic Bill of Lading; 5 and help the German firm, 
if requested, with the necessary U.S. Government 
export documents. 

The German firm is responsible for all trans- 
portation costs from the factory and for special fees 
levied in exporting the icemakers to Germany; it is 



2 F.O.B. stands for Free on Board. 

'C.O.D. stands for Cash on Delivery. 

4 Generally, the seller will arrange for an inland carrier (a 



taKes tnem. <^ee page / j ror a more detailed aescnptK 

a Bill of Lading.) 

responsible for any loss or damage after the 
makers are on the truck; and it pays all cost; 
the necessary export documents. (Frequently, 
suppliers will make arrangements for in 
transportation, if requested.) 

Example 2: YCI quotes F.O.B. "Yankee ( 
per", New Orleans. Under these terms, the 
firm pays all charges for placing the icemakei 
board the ship "Yankee Clipper" prior tc 
sailing date; provides the German firm witt 
ocean Bill of Lading; is responsible for los 
damage until the icemakers are loaded or 
" Yankee Clipper;" and helps the German buyi 
requested, with the necessary U.S. ex 
documents. 

As he has specified the ship he wants to ust 
must give the U.S. exporter adequate notice o_ 
sailing date, where the ship is located, and deli 
instructions. If the "Yankee Clipper" fails to j 
up or fails to load within the designated time 
foreign firm bears all costs for the delays an< 
shipping costs to Germany once the icemaker. 
loaded on the ship. It pays all costs and charge 
obtaining U.S. export documents. The U.S. 
may, if requested, book space on the "Ya, 
Clipper" and take care of the net 
documentation. 

3. F.A.S. 6 Vessel (named port of shipment): 
price of goods delivered on the docks be 
loading. The buyer is responsible for goods < 
they are "along side the ship" in other word; 
the dock. While the buyer is supposed to arr; 
for freight space and insurance, in many case: 
U.S. supplier does this for him and provides 
shipment on behalf of the buyer. In other c; 
the buyer notifies the seller to make delivery al< 
side a designated vessel, and provides his 
insurance. Therefore, it is important for both 
ler and buyer to agree on who will book the fn 
and buy insurance. 

Example: YCI, the U.S. manufacturer, quote. 
German firm "F.A.S. Yankee Clipper 
Orleans" for the 300 icemakers. The U.S. fi 
responsibilities are similar to those describe 
example 2 (above) for the cost of loading the c 
on the ship. 

4. C.I.F. 7 (named point of destination): The ] 
includes the cost of the goods, cargo insure 
and all transportation charges to the named r. 
of destination. 



makers have been loaded on the ship. c A common vanatoon of this shipping term is C. & 

F., (named point of destination). This quotation will 

The German firm handles and pays for all not include the cost of insurance. 
subsequent movement of the shipment and is 

responsible for cargo loss once they have been 

placed on board the ship. The box on page 74 sum- *C. & F. stands for Cost & Freight. 



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uote a guaranteed price which includes all charges 
3r shipping the goods to the port or airfield; in 
ssence, this is an F.A.S. (vessel-or-plane) quotation. 

If you wish, you can add the approximate charges 
3r further cost so that the buyer can easily arrive at 
is own estimated C.I.F. cost. 9 You should indicate, 
owever, that actual costs will be charged upon 
lipment. A freight forwarder can estimate these 
barges for you. 

If an F.A.S. (vessel) quote is too difficult, as a 
linimum, we recommend a guaranteed Ex Factory 
rice with estimated inland transportation charges to 
e port where the goods will be exported. 

HE LONG TIME FRAME OF AN EXPORT 
HIPMENT. U.S. domestic shipments can reach 
istomer in no more than 4 or 5 days by train, 
uck and cargo or parcel post. But the time frame of 
ur export shipment is much longer. It takes up to a 
lonth for a customer in Milan, Italy, to receive 
3ods shipped by sea. Your customer in Japan or 
.ustralia may not get your goods for 45 days. (Air 
eight, of course, speeds delivery, but it still may be 
days before your customer actually receives 
lipment.) 

The longer time frame needed for an export 
lipment may be obvious but the new-to-export firm 
muld also know that exporting requires some 
)ecial paperwork that is not needed in domestic 
usiness. (See page below for special export 
ocuments.) 

ICEAN SHIPMENT. Most export shipments go 
ia ship; it's much cheaper than air shipment. 
)isadvantages of ocean shipment: paperwork and 
le extra packing needed to protect goods from 
3Ugh handling and the corrosive atmosphere; also, 
(any ports have congestion problems and frequent 
mgshoremen strikes. 

Containerization eliminates some of these 
isadvantages. It's now possible to pack your goods 
i a container at your factory door, seal it, and ship 
, seals unbroken, to your customer's doorstep. 

IR SHIPMENT. International air cargo is 
owing. It has the obvious advantage of speed, 
ivings in packing costs, and insurance charges. Also, 
te export paperwork is less. Cargo rates are higher 
lan ocean freight, but exporters should compare 
:ean and air rates for their specific product. 

AIL AND TRUCK. Two of the largest U.S. ex- 
)rt markets, Canada and Mexico, can be served by 
)ad or rail. No special packing is needed and 
slivery times are reasonable. (But Mexican custom 
)rmalities can delay delivery.) 



on a ship or a plane, arrange for insurance, etc. that 
is, if it had the staff and knew where to go for the 
information. However, specialized firms called 
International Freight Forwarders are available to 
relieve exporters of these headaches. 

The freight forwarder is a most important link in 
the export transaction. Our advice: a new-to-export 
firm should use one. 



DOCUMENTS! DOCUMENTS! 

Sometimes exporters feel their shipments will 
drown in red tape and paper. Here are the major 
documents so he can take possession of your prod- 
ucts once they have arrived in his country, 
governments. 

YOUR CUSTOMER. Your customer needs 
documents so he can take possession of your pro- 
ducts once they have arrived in his country. 

1. Commercial invoice. You (or your forwarder) 
prepare this. The buyer needs it so he can "prove" 
ownership and can arrange to pay you. 

2. Ocean (or airway} Bill of Lading. A carrier (or 
freight forwarder) prepares this. It's a contract 
between the owner of the goods and the carrier. It 
indicates the condition of the merchandise upon 
the carrier's acceptance. The customer usually 
needs the original or a copy as proof of ownership 
to take possession of the goods. 

3. Insurance certificates, which indicate coverage of 
goods against loss or damage. It's prepared by you 
or your forwarder. 

4. Packing lists, which show the quantity and type of 
merchandise shipped. You prepare. 



THE U.S. GOVERNMENT 
DOCUMENTS. 



NEEDS 



1. Export Declaration. You or your freight forwarder 
prepare this for all shipments valued in excess of 
$250. It's used to control U.S. exports and as a 
source for export trade statistics. See the box on 
page 77 for an explanation. 

2. Export License. 99% of all U.S. export shipments 
don't require a formal export license. If one is 



FOREIGN GOVERNMENTS. Foreign 
governments may require the following documents 
on your export shipment. 

1 . Consular invoice. Certain governments want closer 
control over their imports and require consular 
invoices. You (or your forwarder) prepare it. A 
consul of the foreign country located in the U.S. 
frequently collects a fee and legalizes it. 

2. Certificates of origin. Some, but not all, 
governments need proof that your products are 
U.S. -made. You (or your forwarder) prepares this, 
if required. 

3. Customs invoice. This is a copy of the sellers' com- 
mercial invoice, describing the goods bought. 
Custom invoices are used for import clearances, 
and sometimes vary from the commercial invoice. 
You (or your forwarder) prepare it. 

4. Other documents needed could be inspection 
certificates, cargo, purchasing lists, etc. 

DOCUMENTS YOU WILL NEED. You'll need 
several documents. 

1. Dock and warehouse receipts. Since you will be 
contracting with a trucking firm or railroad to 
move your goods from your loading dock to the 
port, you'll need a domestic Bill of Lading, or 
other receipts, once goods are unloaded from the 
inland carrier and are placed in the hands of the 
post terminal operators, etc. 

2. Payment agreements between you and your 
customer. Foreign and U.S. banks may be in- 
volved and you'll need documents from them. 

3. Insurance certificates as proof of coverage in event 
of loss or damage to goods. 

HE DOES MORE THAN FORWARD 
FREIGHT. The international freight forwarder is an 
export "specialist" and he does much more than 
make sure your foreign customer gets the goods on 
time and intact. For example: 

1. The freight forwarder can help you estimate all 
costs for your price quotations. 

2. He advises on packing, marking, and labeling 
requirements. 



3. He can tell you precisely what documents will be 
required, and how to complete them. He can 
provide you with the blank forms or if asked, 
he can fill them in for you. (Remember, he's 
acting as your agent.) 

4. He books cargo space. He prepares and processes 
ocean (or airway) Bills of Lading. 

5. He can arrange for insurance coverage. 

6. He presents your shipping documents to banks to 
speed payment. 

7. In some cases, he can save you money by 
consolidating the shipments of many exporters to 
one country into one large one which gets a lower 
freight rate. 

8. He can arrange for export packing of your goods. 

9. He will get your merchandise to the right spot on 
docks, and get necessary receipts. 

10. He can fill out the Export "Decs" required by the 
U.S. government. 

11. He can prepare other documents such as 
certificates of origin, consular invoices, or 
custom invoices. He arranges for the legalization 
of these documents. 

12. He prepays all charges (including ocean or air 
freight) such as transportation. 

13. He can prepare notice of shipments, sending 
copies to banks, carriers, or customers, etc. 



HOW MUCH DO THEY COST? Freight 
forwarders charge surprisingly little for their service. 
An average shipment would cost between $20 and 
$40 for booking cargo space on a plane or boat, 
arranging to get your goods to port, and preparing 
for necessary ocean (or airway) Bill of Lading and 
dock receipts. 10 Charges may be higher if other serv- 
ices are involved. Forwarders often prepay ocean or 
airfreight and fees for legalizing consular invoices. 
These charges are billed to the exporter. Forwarding 
fees for air shipments are usually less than for ocean 
shipment as fewer documents are involved. 



'"Forwarders also get a fee from shippers for selling "cargo 
space." 



Example: Here are a New York City freight 
forwarder's charges on a shipment worth $5,000 
destined for a customer in the Middle East. 



Item 



Amount 



Basic forwarding fee (booking space, preparing a 

Bill of Lading, prepaying freight) $40 

Filling out the export declaration 5 

Preparation of consular invoice 10 
Messenger service to consulate for legalizing consular 

invoice 4 

Preparing certificate of origin 3 
Messenger to Foreign Chamber of Commerce for 

legalizing certificate of origin 2 

Preparation of insurance certificate 5 

Completion of commercial invoice 5 

Postage 3 

Preparing documents for presentation to the bank 10 

The total fee was $88. But the exporter saved more 
than this because the forwarder consolidated this 
shipment in with others going to the same 
country. Thus, the exporter saved on freight and 
eliminated costly export packing. 

NOTE WELL: If you want your freight forwarder to 
complete the export declaration or present your ship- 
ping documents to U.S. banks, you will have to give 
him shipping power of attorney. 

HOW TO 'LOCATE ONE. About 1,500 ocean 
freight forwarders are licensed by the Federal 
Maritime Commission. All must pass a special 
examination, but all are not active. Most forwarders 
are in port cities. Some 300 air freight forwarders are 
registered with the Civil Aeronautics Board. Many 
freight forwarders are specialists for both ocean and 
air shipments. Listed below are sources which will 
help you locate a freight forwarder: 

1. Contact the closest District Office of the U.S. 
Department of Commerce. Ask the director for a 
list of freight forwarding firms capable of handling 
both air and ocean shipments. (See page ??? for ad- 
dresses) 

2. Check the yellow pages of your local telephone 
directory. Look under the "Freight Forwarding" 
heading. If you are in a small city, you may not 
find one listed. Check the yellow pages of the 
nearest large city, and you will find some. 

3. Contact an experienced exporter, who will be 
more than willing to suggest a freight forwarder. 
(The U.S. Department of Commerce District 



THE U.S. GOVERNMENT KEEPS A 
WATCHFUL EYE OVER EXPORTS 

WHY? Our Government keeps tabs on what's 
shipped. Some items in short supply or likely to have 
a strategic value are closely regulated. And our 
Government needs immense amounts of information 
for statistical purposes. 

THE EXPORT DECLARATION. The Bureau of 
Census records all shipments valued greater than 
$250. It's interested in the type merchandise, its 
classification code number, its quantity, value, 
destination, how shipped, etc. This information is 
collected on an Export Declaration form (usually 
called an "Export Dec") for every shipment. The 
Bureau of the Census prepares detailed monthly rep- 
orts on U.S. exports, by product, quantity, 
destination, etc. 

SCHEDULE B NUMBER. The Bureau of Census 
has established an elaborate classification system for 
all exported merchandise. Every good shipped from 
the United States fits into one of 3,000 categories, 
each carrying a 7-digit number. This system is known 
as Schedule B: Statistical Classification of Domestic 
and Foreign Commodities Exported From the 
United States. Schedule B numbers are needed on 
Export Decs. 

Example: Icemakers fit into Schedule B No. 
719.1502. Hair preparations are part of Schedule B 
No. 553.0200. 

Schedule B numbers can be obtained from: 

1 . Freigh t forwarders. 

2. The nearest District Office of the U.S. Department 
of Commerce. 

3. Bureau of Census in Washington, If the product is 
unique or there's doubt the correct number, write: 
Foreign Trade Division, Bureau of Census U.S. 
Department of Commerce, Washington, D.C. 
20232. Enclose a product specification sheet. 
They'll handle telephone queries, although official 
rulings are by mail only. Telephone number: (301 ) 
763-5342. Note: There's no charge for this service. 



EXPORT LICENSES. Most merchandise is ex- 



Information on whether a special license is needed 
can be answered by: 

1. Freight forwarders. 

2. The nearest District Office of the U.S. 
Department of Commerce. 

3. Office of Export Administration, U.S. 
Department of Commerce, Washington, D.C. 
20230. Telephone (202) 377-4201. 

If a special license is needed, the same sources can 
help obtain them. 

SELECTING A FREIGHT FORWARDER. If you 

are only interested in an occasional export shipment, 
it doesn't matter which forwarder you use. However, 
you may want to make a more careful selection if you 
plan on building an export business. Then: ask the 
forwarder for references (the average forwarder 
handles some 250 export shipments a week). Get an 
idea of the services he will provide. For example, if 
your products need special export packing, ask what 
arrangements he has for this service. 

One of the best ways to check out a freight 
forwarder is to talk with experienced exporters. 

A WORD ABOUT PACKING. Breakage, 
moisture, and pilferage are the three big dangers to 
your shipment from the time it leaves your factory 
until it gets to your foreign customer. The Insurance 
Company of North America (INA), a large U.S. 
company specializing in selling marine cargo 
insurance, says that 70% of all cargo loss can be 
prevented by proper packing. 

Remember, whatever shipping container you use, 
your "export packing" must be such that your pro- 
ducts will get to your customer thousands of miles 
away in an undamaged condition. Your "package" 
must protect against weather, thieves, and the normal 
hazards of shipping: dampness, rough handling, and 
careless storage. Nothing can be worse than an on- 



time but damaged delivery of your export shipment. 
Insurance will cover the loss, but customer ill will or 
lost time in handling the problem is a heavy price to 
pay. 

PACKING INFORMATION: WHERE TO GET 
IT. There are many information sources on export 
packing. Your best bet is a freight forwarder. He can 
advise you on requirements and an export packing 
specialist. Other sources: 

1. Ports of the World. This free book has a basic 
packing guide and describes the types used in ex- 
port. Contact: Insurance Company of North 
America, Marine and Aviation Division, 1600 
Arch Street, Philadelphia, Pa. 19100. 

2. Guide to Damaged Packing, a free pictorial guide 
to what can happen to export shipments, available 
from American Institute of Marine Underwriters, 
99 John Street, New York, N.Y. 10038. 

LABELING AND MARKING THE EXPORT 
"CONTAINER." Export shipping cartons or 
containers need different markings than domestic 
shipments. Foreign customers have their own needs, 
shipping companies and port terminal operators have 
theirs, and even foreign governments have certain 
needs for marking. Bolivia, for example, insists that 
gross weights, in kilograms, be marked on all 
packages in stencil numerals at least 6 centimeters 
high. 

NOTE WELL: Don't take it for granted that foreign 
customers, custom officials, or stevedores can read 
English. That is why cautionary marks such as 
"handle with care" or "this side up" may be needed 
in a foreign language as well as in English. 

Your forwarder can also advise you on marking 
and labeling. Your foreign customer will often in- 
clude labeling and marking instructions with his 
order. 
The box on page 79 describes typical markings. 



WHAT GOES ON AN EXPORT CARTON? 

1. "MADE IN U.S.A." This mark is required by custom officials in most foreign countries before the goods 
can be imported. 

2. Your customer's name and address. In some cases he may give you a shipping "code," preferring to keep his 
identity unknown to discourage thieves. 

3. The port of exit and port of destination. 

4. The package or case number. If five packages make up your shipment, each one will be numbered in 
consecutive order. 

5. Carton dimensions. In some cases, it must be provided in both inches and the metric system. 

6. Your shipment's gross weight expressed in pounds and/or kilograms. 

7. Cautionary markings such as "This Side Up" or "Handle with Care" in both English and foreign languages. 
NOTE: Experienced exporters advise against using brand names or adversiting slogans on packages. 



Shipper's 
Mark 



Handling Marks . - 




II 



ADUIIKSS AT U.S. PORT OF LOADING 



I MI.G . 

I MADRID I 

[_ S y I'__ I 

VIA BAnOKl.OlVA 



f 



GROSS 174 I.US. 
NET 125 I.US. 



Receiver's Mark, 
Destination and 
Order number 

1 p ort of Entry 



CASK MO. 1 - I- Number of Package 
30x24x14 IkV. and Size Case 



Large packages should 
have marks on two surfaces. 



Country of Origin Weight Mark 

(Illustration courtesy of Marsh Stencil Machine Co.) 



A WORD ABOUT INSURANCE. Like most 
insurance, marine cargo insurance" is an essential 
business tool. Here are some facts about marine 
cargo insurance: 

1. It is generally based on the value of the 
shipment including all charges (freight, han- 
dling, etc.) plus 10% to cover unseen 
contingencies. 

2. Coverage is usually sold on a "warehouse-to- 
warehouse" basis. That is, from your factory to 
your customer's receiving platform. Coverage 
generally ceases a certain number of days after the 
ship or plane is unloaded. (Other types of coverage 
are also available, such as port-to-port, but most 
experienced exporters recommend warehouse-to- 
warehouse coverage.) 

3. Marine cargo insurance policies are sold on a per 
shipment or "blanket" basis a policy issued to 
cover all shipments during the life of the 
insurance. Freight forwarders purchase "blanket" 
policies to cover shipments of exporters who do 
not have their own policies. 

4. Insurance rates vary according to the product, 
destination, shipping method, exporter's "track 
record," etc. A rough rule of thumb: ocean cargo 
insurance will cost $.50 per $100 of invoice value. 
Air cargo insurance will cost 25% less, but rates 
vary. For example, large steel beams (difficult to 
pilfer) may be as low as $.15 per $100 to insure. 
But insurance covering automotive spare parts 
destined for certain Latin American cities would 
cost $5.00 per $100! 12 

HOW TO HANDLE INSURANCE. If you only 
export "occasionally," it will be cheaper to use your 
forwarder's policy. Check with him on costs. 
However, if you plan a more aggressive export effort, 
it will pay to have your own policy. Policies are sold 



"The term marine insurance is the term used for ocean as 
well as air cargo coverage. 

^Insurance experts call auto parts a "targeted" 
commodity i.e., an easy "target" for thieves. 



by insurance brokers. Here are suggestions on 
locating them. 

1. Contact your forwarder. He can recommend one 
or several brokers. 

2. Contact the District Office of the U.S. 
Department of Commerce nearest you. An 
international specialist can list the important 
brokers. 

3. Contact an experienced exporter. They often will 
put you in touch with their own broker. 

4. Contact an international airline or a steamship 
line. 

ADDITIONAL INFORMATION AVAIL- 
ABLE. Information on marine cargo insurance is 
available from two free pamphlets. 

1 . Guide to Cargo Insurance, discusses marine cargo 
insurance and types of policies. It's available from 
American Institute of Marine Underwriters, 99 
John Street, New York, N.Y. 10038. 

2. Money at Risk, available from Insurance 
Company of North America, Marine and aviation 
division, 1600 Arch Street, Philadelphia, 
Pa. 19101. 

TO SUM UP. Exporting has its own definitions. 
Shipping terms have been established so that buyers 
and sellers will have a common method of com- 
munication. The manufacturer has many export 
pricing options. In addition to the basic cost of the 
product, there may be other costs necessary to get 
your goods to your customer's place of business. This 
chapter has identified these costs, and shown how 
they're covered in export quotations. 

An export shipment requires far more paperwork 
than its domestic counterpart, in particular if your 
shipment goes as ocean freight. But companies who 
wish to ship products to foreign customers won't 
have to worry about paperwork. Their freight 
forwarders can do it for them. These firms, the "exp- 
orter's best friend," can advise not only on best 
methods of shipping, but they'll also handle all ship- 
ping and document details. Their costs are low. 



HOW AN EXPORT SHIPMENT MOVES 

Many individuals or specialist firms are involved in getting a shipment from your factory to the port: the 
trucking firm that carries your merchandise; the freight forwarder; the truck driver; the terminal operator who 
handles shipping berths for ocean vessels; and the steamship company, itself. 

Listed below are 19 steps just to get your goods on board a ship. 1 

YOU, The Exporter 

1 . Prepare the domestic Bill of Lading for the movement of your cargo to the pier at the port of export. A copy 
of this domestic Bill of Lading is sent to your freight forwarder, along with your packing list. Both Bill of 
Lading and packing list should be carefully checked. 

2. Mark the cargo plainly to show gross and net weight (without the packing), volume (cubic measurement), 
foreign destination, customer identification marks, and a "Made in the U.S.A." mark (most important!). 
Your forwarder and customer have advised you, most likely. 

The Trucking Firm 

3. Accepts your cargo for transit to the port. Either you arrange for the trucking company to pick the cargo up; 
or your freight forwarder does it. 

4. Advises your freight forwarder when your cargo will get to the port. 

5. Receives the following from your freight forwarder: name of vessel, sailing date, pier location, and any 
special permits needed to bring your cargo onto the pier. 

6. Obtains a filled out but unsigned dock receipt from the freight forwarder. This receipt will accompany 
your cargo. 

7. Contacts the terminal operator to make arrangements for special handling or special equipment (if required) 
at least 24 hours before scheduled delivery to the port. 

Your Freight Forwarder 

8. Provides the unsigned dock receipt and special permits, if required, to the trucking firm. Your forwarder 
carefully checks the dock receipt for completeness. 

The Truck Driver 

9. Drives his truck to the entrance of the port. 

The Terminal Operator 

10. Issues a pass to the driver at the gatehouse. 

1 1. Checks driver's papers and assigns a checker to the driver and an unloading spot on the pier. 

The Truck Driver 

12. Unloads his vehicle. 

13. Obtains a signed copy of the dock receipt. 

The Terminal Operator 

14. Signs the dock receipt. 

The Truck Driver 



The Steamship Company 

18. Signs the ocean Bill of Lading and returns it to the forwarder. 

The Freight Forwarder 

19. Reviews documents and transmits copies to appropriate firms: buyer, exporter, bank. 



This material is adapted from an "Export Guide" prepared by the Port Service Improvement Committee, Port Authority of 
New York and New Jersey. 



CHAPTER IV 



HOW TO SELL ON LETTER OF CREDIT 



INTRODUCTION. So far we have dealt with ex 
port shipments which are paid for in advance or from 
an account maintained in the U.S. by the buyer. But 
many excellent potential foreign buyers may not buy 
this way. Many would prefer to pay only after receipt 
of the goods or when they have proof that the 
shipment has arrived. 

At the same time, the U.S. supplier does not want 
to ship to an unknown buyer abroad without positive 
assurance that he will be paid. And suppliers may not 
want to accept payment on a delayed basis. The sup- 
plier may fear that an unknown buyer will default 
thousands of miles away. Can these risks buyer 
nonpayment and supplier nonperformance be 
minimized? This chapter discusses a common ap- 
proach used in export the letter of credit. This 
method of payment has a double guarantee. It 
guarantees the supplier payment on proof of 
shipment, and guarantees the customer that he will 
receive the export merchandise he has ordered. 

LETTER OF CREDIT: (WHAT IS IT?) A foreign 
buyer asks a bank to transfer funds from his account 
to a U.S. bank which will be for payment to a U.S. 
supplier. At the same time, the customer's bank asks 
the U.S. bank to withhold supplier payment until 
proof of shipment has been presented to the U.S. 
bank. Such arrangements are called "letter of credit" 
transactions, as the foreign bank sends a "letter" 
through a U.S. bank to the exporter informing him of 
a "credit" opened in his favor. 

One international banker says "letters of credit are 
used between buyers and sellers who do not know 
each other. They have no reason to trust each other 
so they turn to banks to complete the transaction. 
The banks trust each other because they have had a 
past business relationship." 

Letters of credit come in three types. (You'll 
sometimes see the abbreviation L/C.) 



meets shipment conditions. The only risk is the 
default of the foreign bank. 

3. "Confirmed irrevocable" letter of credit. The 
promise to pay has been guaranteed by a U.S. 
bank. Payment cannot be withheld even if the 
buyer and the buyer's bank default. Thus, the ex- 
porter has no payment risks provided he submits 
the necessary documents which prove compliance 
with all conditions stated in the letter of credit. We 
recommend that new-to-exporters only consider 
this type of letter of credit. 

See page 85 for a sample of a confirmed 
irrevocable letter of credit. The fee for a letter of 
credit ranges from 1/4% to 1% of the amount of the 
credit, depending upon the country and the bank. 
Normally, the buyer pays the fee. 

MEET THOSE SHIPPING DATES. If shipments 
cannot be made by the date called for in the L/C, 
exporters should ask the buyer "to amend onto" the 
letter of credit to extend the date of its validity, or to 
open a new one. If the exporter ships after the date 
specified in the L/C, the customer and his banks are 
relieved of any obligation to pay. In rare instances, a 
letter of credit may not be honored because the Bills 
of Lading differ in wording from that specified in the 
letter of credit. And payment could be withheld if 
goods are not shipped on a specified vessel. 

A TYPICAL LETTER OF CREDIT 
TRANSACTION. Here's what happens when 
payment is made by an irrevocable letter of credit 
confirmed by a U.S. bank.' 

1 . After you and your customer agree on the terms 
of sale, he arranges for his bank to open a letter 
of credit. 2 



1 . "Simple" letter of credit. This gives the seller re- 
course only to the buyer who signs the letter of 



'You can indicate your choice of a U.S. bank to confirm 
the letter of credit. But check first with your bank. Most 



2. The buyer's bank prepares an irrevocable letter 
of credit, including all instructions. 

3. The buyer's bank sends the irrevocable letter of 
credit to a U.S. bank requesting confirmation. 3 

4. The U.S. bank prepares a letter of confirmation 
to forward to you, along with the irrevocable 
letter of credit. 

5. You review carefully all conditions in the letter of 
credit, in particular, shipping dates. If you can't 
comply, alert your customer at once. (Your 
forwarder can help advise you.) 

6. You arrange with your freight forwarder to 
deliver your goods to the appropriate port or 
airport. If the forwarder is going to present the 
documents to the bank (a wise move for the new- 
to-export firm), he'll need copies of the letter of 
credit. 

7. After goods are loaded, the forwarder completes 
the necessary documents (or transmits the 
information to you). 

8. You, or your forwarder, present documents 
indicating full compliance to the U.S. bank. 

9. The bank reviews the documents. If in order it 
issues you a check. The documents are airmailed 
to the buyer's bank for review and transmitted to 
the buyer. 

10. The buyer (or his agent) gets the documents 
which may be needed to claim the goods. 



'Foreign banks with more than one U.S. correspondent 
bank generally select the nearest one to the exporter. 

"Some exporters ask customers to specify the wording 
"about (estimated value of the shipment)." Banks in this 
case can usually pay up to 10% more than the estimated 
amount but it's not guaranteed! 



TIPS ON USING A LETTER OF CREDIT. If a 

prospective customer isn't able or doesn't want to 
pay you cash in advance (most won't), and doesn't 
keep a U.S. bank account, suggest a confirmed 
irrevocable letter of credit. Or if a foreign firm wants 
you to ship on "open account" (described later), tell 
him that your payment terms are confirmed 
irrevocable letter of credit. The customer will go 
along with this request if he wants your product 
and many foreign firms know that new-to-export 
firms can't afford to offer other terms. 



1. When quoting prospective customers, estimate 
shipping and packing on the high side to account 
for unforeseen charges. Banks won't pay amounts 
greater than specified in the letter of credit even 
if the high charges are documented. 4 

2. After receiving a letter of credit from a potential 
customer, carefully compare its terms with the 
terms of your pro forma quotation. Check the 
shipping date. Make sure you can comply with all 
the terms. If you are unable to do so, get in touch 
with the customer immediately and ask that the 
conditions be changed. 



TO SUM UP. A letter of credit is an extremely 
useful method of export payment. For you, the seller, 
it practically eliminates the risk of nonpayment by 
your customer and enables you to collect payment 
upon proof of shipment from a U.S. port. Your 
customer will also find it useful. It eliminates the risk 
of receiving incorrect, damaged, or delayed goods. 
And banks charge surprisingly little for the service, 
usually no more than 1% of the value of the shipment 
and sometimes less. 



MORGAN GUARANTY TRUST COMPANY 

OF NEW YORK 

INTERNATIONAL BANKING DIVISION 
23 WALL STREET. NEW YORK. N. Y. 10015 March 5, 19* 



Smith Tool Co. Inc. 
29 Bleecker Street 
New York, N.Y. 10012 



On all communitolioni plcai* rfr t 

NUMBER 1C - 152647 



Dear Sirs: 

We are instructed to advise you of the establishment by 

Bank of South America, Puerto Cabello, Venezuela 

of their IRREVOCABLE Credit No. 19845 

in your favor, for the account of John Doe, Puerto Cabello, Venezuela 

for U. S. $3,000.00 (THREE THOUSAND U. S. DOLLARS) 

available upon presentation to us of your drafts at sight on us, accompanied by: 
Commercial Invoice in triplicate, describing the merchandise as indicated below 

Consular Invoice in triplicate, all signed and stamped by the Consul of Venezuela 

Negotiable Insurance Policy and/or Underwriter's Certificate, endorsed in blank, covering 
marine and war risks 

Full set of straight ocean steamer Bills of Lading, showing consignment to the Bank of 
South America, Puerto Cabello, stamped by Venezuelan Consul and marked "Freight Prepaid", 

evidencing shipment of UNA MAQUINA DE SELLAR LATAS, C.I.F. Puerto Cabello, from United 
States Port to Puerto Cabello, Venezuela 



Advice of irrevocable letter of credit issued by 
a foreign bank in favor of a U.S. exporter and 
confirmed by Morgan Guaranty , which is 
obliged to honor drafts drawn under credit. 



Except as otherwise expressly stated herein, this credit is subject to the Uniform Customs and Practice 
for Documentary Credits (1974 revision). International Chamber of Commerce Publication No. 290. 

The above bank engages with you that all drafts drawn under and in compliance with 
the terms of this advice will be duly honored If presented to our Commercial Credits 
Department . 15 Broad Street, New York A N.. Y., 10015 . on or before March 31, 19* 
on which date this credit expires. 

We confirm the foregoing and undertake that all drafts drawn and presented in 
accordance with its terms will be duly honored. 

Yours very truly, 



CHAPTER V 



FOLLOWING AN EXPORT TRANSACTION 



INTRODUCTION. A freight forwarder can help 
you in handling an order from a foreign customer 
that calls for delivery abroad. For an estimated fee of 
$200, a forwarder will prepare your quotation, 
arrange all the shipping details, and assist in col- 
lecting payment. This may be a sound proposition if 
you have only one or two export shipments a year. 

However, if you envision several export shipments, 
you will find this $200 fee costly. It may make you 
noncompetitive if you pass it on to the customer; if 
you absorb it, you're handling export business at a 
loss. 

But you can handle inquiries and orders from 
potential foreign customers at a profit. This chapter 
identifies the steps for completing your first export 
shipment. As an example, we use a mythical foreign 
customer, the ABC Refrigeration Co. (London, 
England), who wants to purchase ice cube makers. 

ANALYZING THE INQUIRY. See page 89 for a 
typical inquiry from a foreign buyer. Note that it asks 
for delivery in the United Kingdom. 

The first step in an export transaction is to analyze 
the inquiry. Get your shipping and payment terms. 
Begin your record keeping. 

Example: You decide to quote C.LF. Liverpool as 
requested. And you've decided your payment terms 
will be confirmed irrevocable letter of credit. Since 
your bank has no international capabilities, you're 



willing to accept confirmation by ABC's U.S. 
correspondent bank. Start your file. 



CONTACT YOUR FREIGHT FORWARDER. 

after settling your terms, contact a freight forwarder 
for estimates of shipping and packing, and insurance 
costs. But first you will have to give the forwarder 
certain information so he can figure out your costs. 

1. Your product, the unit price, and quantity. 

2. The destination. 

3. Information on your normal domestic packing. 

4. The gross weight and shipping dimensions of your 
product. 

5. The payment terms you want. 

6. Your export shipping terms F.A.S. (vessel); C.I.F. 
(port of destination). 

Armed with this information, the freight forwarder 
can provide you with all the information needed to 
prepare a quotation. 

Example: YCI contacts J.L. Freight Forwarders 
with order details. The freight forwarder tells them 
ocean shipment is the best method, how best to pack, 
and estimates for handling, documentation, freight, 
and insurance as follows: 



Item 

Export packing and marking (Each crate measures 22 cubic feet). 

The gross and net weights of the shipment are 1 140 and 1060 Ibs 
Ocean freight (shipped on the White Crown lines, which has 

frequent sailings) 

Marine insurance (warehouse-to- warehouse coverage) 

Forwarding fees (for handling, booking space, preparing 

documents, presenting documents to bank) 



Estimated 
Cost 

$200 

$165 
67.50 

58 



He also tells you the correct Schedule B Number: 719.1502; and (good news) that special export license, 
consular documents, and a certificate of origin will not be required. 



COMPLETE YOUR EXPORT COSTING 
WORK SHEET. Many items in the export trans- 
action add costs: extra packing charges; freight 
both inland, ocean or air; documentation, etc. If 
the terms you select make you responsible for some 
or all of these costs, you'll want to pass them on to 
your buyer or factor them into the price of your 
goods. Experienced exporters use an export costing 
work sheet. It is no more than a check list of 
various items of cost which may come up in an ex- 
port transaction. A costing sheet is your work sheet 
each time you have to make an export quotation. A 
costing sheet also ensures that all possible charges 
are added into your quotation. You won't forget 
any, and it will give you an exact record of your 
quotation to each foreign buyer. See page 90 for a 
sample of an export costing work sheet. 

Example: YCI prepares their export costing work 
sheet as seen on page 91 using their factory prices 
for their icemakers, cost, and information provided 
by their freight forwarder. Inland freight charges are 
obtained from their usual trucking company. 

PREPARING YOUR QUOTATION. Once you 
have all the estimated costs, you're ready to prepare a 
quotation, either as a "pro forma invoice" or similar 
to your normal format depending upon customer 
wishes. Note: Until you actually ship, you won't 
know exact costs of ocean freight, export packing, 
marine insurance, etc. Thus, seasoned exporters 
usually use a margin of safety. One New York export 
firm uses a "5% factor" boosting its estimated 
charges by this amount. This firm generally finds its 
final invoice amount will be slightly less than quoted, 
but the firm is covered for unforeseen contingencies. 
Most exporters recommend lumping together 
forwarding fees, export packing, and inland freight to 
avoid a customer's quibbling. 

Pro forma invoice quotations can be sent out on 
your letterhead, or on normal invoice forms with the 
addition of the words "PRO FORMA INVOICE" 
typed at the top. 5 

Example: See page 92 for the pro-forma invoice 
which will be sent to ABC Refrigeration. Note that 
it's marked "PRO FORMA INVOICE." Also note 
that certain charges are estimated (and increased by 
5%) as a precautionary measure. A BC Refrigeration 
knows that actual charges may differ by 5% or so at 
shipment time. ABC Refrigeration needs the pro- 
forma invoice to open a letter of credit. 

TAKE CARE WITH YOUR "COVER" 



Example: YCI's cover letter, to which will be 
attached the "pro forma invoice," is on page 94. 

REVIEW OF CUSTOMER'S PURCHASE 
ORDER. Hopefully, your quotation results in a 
purchase order. Review the order carefully to see that 
it follows your price quotation. Question any 
deviation closely. Make sure you can meet the 
delivery date. Wait for the letter of credit. Once the 
L/C arrives, compare it carefully with order and with 
your quotation. Make sure you stick to the shipping 
date on the L/C, and that you can submit all the 
documents listed in the letter of credit to the bank. 

Followup with your customer. Let him know if you 
think you can comply with the "conditions" of their 
order. If you can't meet some, let him know at once 
and ask for further instructions. 

Many foreign (and U.S.) buyers send copies of 
their order in duplicate asking that one copy be 
returned as an order acknowledgement. It's safer to 
send a copy of the order written up on your own 
order forms. Whatever method you choose, 
acknowledge the order. 

Example: ABC's purchase order, on page 94, calls 
for shipment on or before September 5. Check to see 
that the order conforms to your quotation. But you 
note that ABC asks for six copies of your packing 
list by air mail after shipment. You decide to accept 
their order, but await receipt of the letter of credit 
before shipping. Once this is received, review it 
carefully. 

WORK WITH YOUR FREIGHT FORWARDER. 

Your forwarder can now advise you exactly how and 
when to ship. He arranges for any special packing. If 
you want your freight forwarder to fill out your exp- 
ort declaration, give him power of attorney. 

Example: You telephone your freight forwarder 
about the order. He advises you of what's re- 
quired. 

Once the shipment leaves your factory, you will 
want to alert him again. (In some cases, the freight 
forwarder will actually arrange to have an inland 
carrier pick up your goods.) The forwarder will now 
need copies of the inland Bill of Lading, several 
copies of your packing list, and your commercial 
invoice partially filled out. Remember, you will not 
be able to complete the invoice until you know all 
charges. The forwarder can complete your com- 
mercial invoice. 

In this example, your work is essentially complete. 
The forwarder takes over. He'll prepare the necessary 



presented on page 95. You are sending him your 
invoice, partially completed, your packing list, your 
letter of credit, and power of attorney. 

SHIPMENT MADE; DOCUMENTS 
PRESENTED TO CUSTOMER AND BANK. The 
freight forwarder handles all details. 

The forwarder summarizes what he's done, and 
gives you an invoice. 

Note: As you become more experienced, you may 
want to handle some of this yourself. 

1. Export packing. Some firms find it's cheaper to 
pack at their factory. (However, special packing is 
expensive and special firms known as outside 
packers may be cheaper.) 

2. Purchase your insurance. 

3. Complete the commercial invoice and forward it 
to the customer. (In this case, the freight 
forwarder telephones or writes the exporter with 
the shipping, documentation, and handling 
charges.) 

4. Presentation of documents to the U.S. bank. 

5. Completion of the export declaration. 

You can save $40 or more per shipment by doing 
these chores yourself. (However, you may find your 
time and effort is worth considerably more and you'll 
prefer that your forwarder handle these details.) 

Example: J.L. Freight Forwarding handled all 
details. He booked space on the vessel "London 
Bridge," informed the trucker where to deliver the 



goods, prepared the dock receipt and ocean Bill of 
Lading. He arranged to insure the shipment under 
his blanket policy. He also completed the "Export 
Dec." After the goods were onboard, and all 
charges became known, he completed the com- 
mercial invoice. 

PAYMENT MADE. The U.S. correspondent bank 
carefully compares the documents with the 
conditions of the letter of credit. 

The bank must make sure that all the conditions 
are met. Thus, the buyer minimizes the risk in dealing 
with a new and unknown supplier. After the bank is 
satisfied that your shipment has met the conditions, it 
agrees to pay you. 

Example: J.L. Freight Forwarder presents the 
original letter of credit and shipping documents to 
the Hometown Bank, where they're reviewed to 
ensure compliance. Once satisfied, Hometown Bank 
mails a check for the amount to YCI. 

TO SUM UP. An export shipment has many factors 
that aren't found in a domestic sales transaction. But, 
a new-to-export firm who understands the needs of 
its customer and their governments, the U.S. 
Government, and the transportation firms, will find 
it easy to complete these transactions. And, new-to- 
export firms will find that an international freight 
forwarder can eliminate practically all the headaches 
of an export shipment. The novice exporter will also 
find that when he is dealing with unknown foreign 
buyers, using an L/C will minimize the risk of 
nonpayment from an unknown foreign buyer. 



ABC REFRIGERATION CO., LTD. 

Post Office Box 25 / 1500 Pembridge Crescent / London, MK 46 4BN England 

tlephone: 01-355-1414 Banks: Union Bank, Ltd. 

ilex: 825540 British Bank, Ltd. 

able: ABCREF 



(A typical letter of inquiry looks as if it will turn into an order. It's for 
delivery outside the U.S. as distinguished from the letter on page 99) 



Ref: 225 
July 10, 197- 



Your Company, Inc. 
123 Main Street 
Hometown, 44412 
U.S.A. 



Dear Sirs: 



The ABC Refrigeration Company is a large U.K. importer of commercial refrigeration 
equipment. We would like to order five (5) of your water-cooled Model 232 ice cube 
makers. 

Please send us your pro-forma invoice for five of your ice makers, C.I.F. Liverpool, 
England. Please indicate your payment terms, and estimated time for dispatch after 
receipt of our firm order. 

Yours very truly, 



EXPORT COSTING WORK SHEET 
(for Preparing Export Quotations) 



REFERENCE INFORMATION 

1. Our Reference 

CUSTOMER INFORMATION 

3 . Name 

4. Address 



11. 


Dimensions 


X X 


ts 12. 


Cubic measure 


(square inches) 




(unit) 


(square feet) 


ht 13. 


Total measure 




14. 


Schedule B No. 





PRODUCT INFORMATION 

1, Product 

8. No. of units 

9. Net weight 
10. Gross weight 

PRODUCT CHARGES 

15. Price (or cost) per unit 

16. Profit (or mark-up) 

17. Sales Commissions 

18. FOB Factory 

FEES -PACKING, MARKING, INLAND FREIGHT 

19. Freight Forwarder 

20. Financing costs 

21. Other charges 

22. Export packing 

23. Labeling/Marking 

24. Inland freight to 

25. Other charges (identify) 

26. FOB, Port City (Export Packed) 

PORT CHARGES '/DOCUMENT 



2. Customer Reference 



5. Cable Address 
6 . Telex No. 



x units 



Total 



27. 
28. 
29. 
30. 
31. 
32. 
33. 



Unloading (Heavy Lift) 

Terminal 

Other (identify) 



Consular Document (check, if required) 
Certificate of Origin (check, if required) 
Export License (check, if required) 
FAS Vessel (or Airplane) 



FREIGHT 



34. 

35. 



Based on 
Ocean 



weight 
Air 



measure 



YOUR COMPANY, INC. 

EXPORT COSTING SHEET 



DATE: 

QUOTED TO : /\ g 






REFERENCE: ^ 2 ^ 
FROM PORT: /Ve 1 ^ 
PRICE QUOTATION TERMS 
SHIPPING LINE: 
PRODUCT DESCRIPTION: 

SCHEDULE B No: 7/ 



^ // 



A 

Ac 
/T/f 



Zi 



pc&t 



NO. OF UNITS: -S NET FOB FACTORY PRICE: 

INLAND FREIGHT: 

EXPORT PACKING & STENCILING 

FREIGHT FORWARDING 

CLEARANCE & HANDLING 

BOOKING STEAMSHIP SPACE 

CONSULAR DOCUMENTATION 

CERTIFICATE OF ORIGIN 

PREPARING EXPORT DECLARATION 

PREPARING OCEAN BILL OF LADING 

MESSENGER SERVICE 

SHIPMENT PAPERS TO U.S. BANK FOR L/C 
TOTAL FORWARDING AND INLAND FREIGHT CHARGES 



2-O 



TOTAL PRICE 



,- 
^ 



* MARINE INSURANCE INCLUDING WAR RISK 
NET WEIGHT OF SHIPMENT /, 

GROSS WEIGHT OF SHIPMENT (units plus crating) 
DIMENSIONS OF EACH CRATE: 3 / V K ^o" 
EACH CRATE CUBIC FEET: 37, TOO cubit. n 
TOTAL SHIPMENT CUBIC FEET: / }O 

* OCEAN FREIGHT * />So/cvhic 



( 






4 &* 

~ 2 I. 5*= 22, 



/.&*n* - 



YOUR COMPANY, INC, 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 



July 20, 197- 



ABC Refrigeration Co., Ltd. 
P.O. Box 25 

1500 Pemb ridge Crescent 
London, England 



PRO-FORMA INVOICE 



Your Reference: #225 

Dated: July 10, 197- 

Five (5) Model 232 water-cooled ice cube makers @ $920 each $ 4,600 

Estimated inland freight, export packing, and forwarding fees 343 

F.A.S. vessel -- New York, NY $ 4.943 

Estimated ocean freight $ 173 

Estimated marine insurance 71 

C.I.F. Liverpool $ 5,187 

Export packed in 5 wood crates, 110 total cubic feet 

Gross weight: 1140 Ibs. 
Net weight: 1060 Ibs. 

Payment terms: Irrevocable letter of credit confirmed by a U.S. bank. 
Shipment can be made two (2) weeks after receipt of firm order. 



YOUR COMPANY, INC. 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 

'Sample of a cover "sales" letter to be sent with the pro-forma invoice.) 



Refrigeration Company, LTD 
50 Pembridge Crescent 
.ondon MK 46 4BN, England Our quote: 76-10 

Gentlemen: 

"hank you for your letter (your reference no. 225) dated July 10, 1976, which 
ixpresses interest in our Model 232 water-cooled ice cube maker. We have attached 
ipecifi cation sheets for this model. 

)ur pro-forma invoice for five of these units C.I.F. Liverpool, England, is 
inclosed. Our payment terms are irrevocable letter of credit confirmed by a U.S. 
>ank. 

le can ship these units within two weeks after receipt of your firm order. The 
foods will be shipped in wooden crates, steel strapped, containing one Model 232 
/ater-cooled ice cube maker per carton. Marine insurance will be provided 
/a rehouse- to-warehouse . 

)ur Model 232 contains unique features not found on any other product. We have < 
ong list of satisfied customers for this product. 

le look forward to receiving your order. 

Sincerely, 



Nelson T. Joyner, Jr. 
President 



ABC REFRIGERATION CO., LTD. 

Post Office Box 25 I 1500 Pembridge Crescent / London, MK 46 4BN England 

Telephone: 01-355-1414 PURCHASE ORDER NO. 555 &mfc: Union Bank, Ltd. 

Telex: 825540 British Bank, Ltd. 

cable: ABCREF Date: August 1, 197- 

TO SUPPLIER: 

Your Company, Inc. 
Ill Main Street 
Hometown, VA 22101 

Please fill the following order in accordance with the shipping instructions, packing, 
delivery and terms that are specified below. 

Please notify us by airmail of your acceptance of this order by signing the attached du- 
plicate copy and returning it to us as soon as possible. If you cannot comply with any 
of the following provisions, please let us know immediately by airmail or cable. Then 
wait for our further comments before proceeding with the order. 

ITEM: Model 232 Water-Cooled Ice Maker 
QUANTITY: 5 

PRICE: US $1,035.20 each C.I.F. Liverpool, England 
SHIPPING DATE: On or before September 5. 

PACKING: For export in wooden crates, steel strapped, containing one Model 232 water- 
cooled ice cube maker per carton. 

SHIPPING MARKS: ABC-London 
No. 555 

London via Liverpool 
No. 1-5/up 

EXPORT ROUTING: From New York to Liverpool via White Star Line 

MARINE INSURANCE: Warehouse-to-warehouse, plus all-risk C.I.F. Liverpool, plus 10%. 

PAYMENT TERMS: Irrevocable letter of credit, opened by British Bank, Ltd., London, and cor 
firmed by their correspondent bank, Home Town Bank, Hometown, Virginia USA. 

DOCUMENTS REQUIRED: Upon dispatch of the order, airmail the following to .ABC Refrigeratior 

Co., Ltd., 1500 Pembridge Crescent, London MK 46 4BN, England, the 
following documents: 

6 copies commercial invoices. Show country 
of origin on all commercial invoices. 

6 copies of packing lists. Detail net and 
gross weight in pounds. 

Other documents in accordance with the terms 
of the letter of credit. 

Sincerely, 



YOUR COMPANY, INC. 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 

(Sample of a letter which the supplier sends to his freight forwarder once the si 
ment has left the factory for the port of exit.) 



J. L. Freight Forwarders 

5 Export Lane 

New York, New York 10001 

Gentlemen: 

As we discussed on the telephone, we have received an order from the ABC Refrigen 
Company of London, England for five of our Model 232 ice cube makers. 

We are enclosing the following: 

1. Copies of our commercial invoice, partially. completed. 

2. Copies of the packing list. 

3. The original of our letter of credit. 

4. A copy of the domestic (inland) Bill of Lading given to us by the Truckii 
Fi rm. 

5. Our power of attorney so that you will be able to complete the export 
declaration and present documents to the Home Town Bank for payment. 

As discussed, we will appreciate your arranging to ship the goods as called for ai 
to submit documents to the bank for collection. We also ask you to take out the 
necessary marine cargo insurance. 

Don't hesitate to contact us if you have any questions. 

Sincerely, 



YOUR COMPANY, INC. 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 

(An example of a commercial invoice) 

ABC Refrigeration Co., Ltd. 

P.O. Box 25 

1500 Pembridge Crescent 

London MK 46 4BN England August 25, 197- 

INVQICE 

Five (5) Model 232 water-cooled ice cube makers @ $920 each $ 4,600 

Inland freight, export packing, and forwarding fees 300 

F.A.S. "London Bridge" NY $ 4,900 

Ocean Freight 140 

Marine Insurance 50. 

C.I.F. , Liverpool $ 5,090 

GENERAL LICENSE: GDEST 

SCHEDULE "B" NO.: 719.1502 

COUNTRY OF ORIGIN: United States of America 

MARKS: ABC London 
#555 

Made in USA 
No. 1-5/UP 

7 ive wood crates, total cubic feet 105 
let Weight: 1,060 Ibs. 
jross Weight: 1,140 Ibs. 

"United States law prohibits disposition of these commodities to Southern Rhodesia, 
Northern Korea, Vietnam, or Cuba." 






CHAPTER VI 



STIMULATING EVEN MORE INQUIRIES FROM FOREIGN FIRMS 



INTRODUCTION. By now you're exporting to 
foreign firms. They have contacted you, and you have 
had to familiarize yourself with quotations, shipping 
procedures, and payment terms based on letters of 
credit. 

It's possible to increase your overseas inquiries. 
And you still won't have to establish an export 
department or travel abroad. This chapter discusses 
how to get inquiries from foreign firms that do not 
know your company, but who want the same type of 
product you make. And secondly, this chapter gives 
tips on how to follow up on these leads. 

THE U.S. GOVERNMENT HAS A NETWORK 
OF OFFICIALS DEVELOPING LEADS. The 

U.S. Government assigns business (commercial) 
specialists to foreign service posts' in virtually every 
important commercial city abroad. They're trained to 
seek out leads: foreign firms who want to buy U.S. 
goods. These leads are collected, described, and 
cabled to Washington where they are distributed to 
interested U.S. suppliers for a small fee. The 
Department of Commerce is responsible for 
disseminating leads on nonfood products; the U.S. 
Department of Agriculture (USDA) is responsible 
for dissemination leads for farm, dairy, or orchard 
items. 

THE TRADE OPPORTUNITY PROGRAM 
(TOP). The U.S. Department of Commerce program 
for foreign leads is called TOPS. Each day the Com- 
merce Department sends out over a thousand notices 2 
of leads to the 8,400 active U.S. firms who subscribe 
to the TOPS service. See page 98 for an example of a 
TOPS lead. U.S. firms that register can specify the 
type of firm they want to hear from precisely. 

TOPS IS RELATIVELY INEXPENSIVE. A 
one-time fee of $25 is charged to register your 
company and to place your specifications in the 
TOPS computer. Each lead mailed to you costs $.75. 
However, you'll have to buy a minimum of 50 leads 
($37.50) in advance. 



you. They usually send a representative to your office 
to discuss TOPS and to help you register for TOPS. A 
word of caution: specify in as much detail as possible 
the type of product leads you wish to receive. A com- 
mon complaint from subscribers: leads come, but not 
for what they sell. Many of these "wasted" leads 
could be avoided by a more careful specification. 
Products are specified by Standard Industrial 
Classification (SIC) code described in detail on page 
99. 

U.S. DEPARTMENT OF AGRICULTURE'S 
LEADS. A comparable service is offered by USDA's 
Foreign Agricultural Service (FAS). Their computer- 
assisted trade lead program, called TORS 3 , is free. 
FAS also publishes a full weekly bulletin of trade 
leads, Export Briefs. For information and 
registration, contact: Foreign Agricultural Service 
(FAS), U.S. Department of Agriculture, 
Washington, D.C. 20250. 

LEADS FROM OTHER SOURCES. Other sources 
can generate trade leads. 

1. Some State governments have set up special 
offices to help their exporters. They often collect 
leads from foreign firms seeking U.S. products 
which they'll gladly send to firms in their State. To 
find out if your State offers this service, contact 
either the nearest District Office of the 
Department of Commerce, or the National 
Association of State Development Agencies, 1015 
20th Street, N.W., Washington, D.C. 20006. 
Telephone: (202) 331-7880. 

2. Export publications. Publications specializing in 
covering export trade develop leads for 
advertisers. There's even a publication devoted 
entirely to a listing of requests from foreign buyers 
for specific U.S. goods. It is called Trade Channels. 
Contact Trade Channel Organization, One World 
Trade Center, Suite 86013; New York, N.Y. 
10048. 



ITS EASY TO GET LEADS FROM FOREIGN FIRMS 

Here is a TOPS sample. It's detailed with current commericaJ information on the firm. 



I.XULi KlVi. UlSTRlUi:'lURSHIP 



MUM IS JXTI.hl.sn.!> IN M.I KI.SIKT1 



SVSTIMS MTU APP-HWKIATI. PI:RIPW:RAL I.QI -iiwvr, su:n AS 



IT, TMIN7iL, AND ISTI.HFACE EQUIPMENT. HIGHLY OESIRAHLI 



STORAGE, INPUT-OUTI 



i'l-' f< TO 32 HUTS WITH MAXIMUM MEMORY CAPABILITY UT To 
)1*>L OR FORTRAN LANGUAGE SYSTEMS. FLOATING- AND FIXED- 
POINT SfiiROI'TINE CAPABILITY. POWER SYSTEM MAY Hi. KWIRfTJ) MAINTAIN 
SUFFICIENT CUBRJMT INTO UN ITS .. POTENTIAL RKQL'IRKMENT R>R DATA HAKAGtMUNT 
SYS TIM. 

FI!M WISHES EXCLUSIVE DISTRIBUTURSHIP IN SOt'THKAST ASIA. HAS 
RI'I'DTATION KITH BUSINESS COMMUNITY IN UANOKUK. OWNER ANU MANAGER ARM 
HIGHLY COMPETENT WITH FIELD STAFF OF '1 . 1 REPRESENTATIVE IN MALAYSIA, 2 IN 
SINGAPORE. 2 IN THE PHILIPPINES, 1 IK INDONESIA, 1 IN MACAO, J IN THAILAND. 



PLEASE SEND A COPY OF YDUR RESPONSE TO 



AMERICAN EMBASSY, BANCKOK 

24 CHULAA STREET 

APO SAN FRANC ISOO 71254 



MR. SUKHAPAN THINNAATHQM, DIRECTOR 

COMPUTER SERVICES 

115 ATOTHAYA LANE 

BANGKOK, THAILAND 97 TEL. 63-4 7B3 



CABLE- COMPSERVICES 
^HMMMMMH^BwBn^^ 

35733 XX 35732XX 35733XX 9921102 

MMe^Mnttnsiji^^^^^m^nBZBMHMDHBBBHNi 
576/42/P46TlO:i986 i FREE 1 100 



WESTERN BUSINESS MACHINES 
97 INDUSTRIAL HIGHWAY 
CINCINNATI, OHIO 45201 




SIC: THE GOVERNMENT'S VIEW OF THE U.S. ECONOMY 

The U.S. government has established an elaborate system called the Standard Industrial Classification (SIC) 
system to classify virtually every area of economic activity. First, the economy is broken down into over 70 
categories, each designated by a two-digit code. 

Example: Petroleum refining and related industries carry the code 29; banking carries the code 60. 

Each broad category is subdivided into areas of greater detail until specific activities are designated by a seven- 
digit code. 

Example: Petroleum Asphalt carries the code 291 1910; Commercial Savings Bank carries the code 602 0005. 
All goods and services fit into one of the 10,000 seven-digit codes. 

The SIC system is used for many purposes. For example, statistical data on the economy is reported on an 
SIC basis. And the U.S. Department of Commerce uses the SIC system to code its trade leads. 

A portion of the SIC code system is presented below with a section of the broad category of electric and 
electronic equipment. 

If you don't know the SIC code for your product or industry, contact the Bureau of Census, U.S. 
Department of Commerce, Washington, D.C. 20233. Telephone: (301) 763-5449. If you write, include a copy of 
your product brochure. 



MAJOR GROUP 36-ELECTRIC AND ELECTRONIC EQUIPMENT 



Code 



Product Description 



361 

3612 
36122 



3612202 
3612204 
3612205 

3612211 
3612214 

3612219 



ELECTRIC DISTRIBUTING EQUIPMENT 



TRANSFORMERS 



POWER AND DISTRIBUTION TRANSFORMERS, EXCEPT PARTS 

Distribution transformers, liquid-immersed, all voltages and dry type electric utility distribution 
transformers, excluding general-purpose transformers 
Overhead or pole top transformers 
100. KVA and below, single phase 
101 KVA through 500 KVA, single phase 
500 KVA and below, three phase 

Compartmentalized pad mounted transformers, single phase, 500 KVA and smaller 
Subsurface, underground and conventional subway type transformers, single phase, 500 KVA 

and below 
Compartmentalized pad mounted transformers and subsurface, underground and conventional 

subway type transformers, three phase, 500 KVA and smaller 



STILL ANOTHER WAY OF GENERATING 
LEADS. The U.S. Government has a service which 
will bring your product news to foreign buyers. 

The U.S. Department of Commerce sends a 
monthly news letter called Commercial News to all 
U.S. Foreign Service posts overseas. Each edition 
features new U.S. products (some illustrated). Com- 
mercial News or an edited and translated version 
is sent to key business firms abroad. 

The Commerce Department encourages U.S. firms 
to send in new product information for a possible free 
listing in this newsletter. Information and an ap- 
plication are available from your Department of 
Commerce District Office or Commercial News, 
Bureau of International Commerce (BIC), U.S. 
Department of Commerce, Washington, D.C. 20230. 

CATALOG FILES AT U.S. EMBASSIES AND 
CONSULATES. Some Foreign Service posts in key 
commercial cities maintain catalog files of U.S. firms 
which local importers can consult. Send your 
catalogs with a cover letter to posts in leading cities. 
They will be filed. Note: mail to the Foreign Service 
post's U.S. address. It's cheaper. They all have one in 
addition to their foreign address. For a listing of 
Foreign Service posts and their addresses, get a copy 
of Key Officers of Foreign Service Posts. It's available 
for $1.25 (paid in advance) from Superintendent of 
Documents, Government Printing Office, 
Washington, D.C. 20402. 

And don't forget a listing in the appropriate 
Buyer Guide directories is essential. (A detailed 
discussion of how to do this appears in PART ONE 
of this handbook.) 

FURTHER TIPS ON FOLLOWING UP LEADS. 

Previous chapters have discussed how to follow up 
inquiries. Your chances of getting business based on 
any leads generated by TOPS, TORS, or other serv- 
ices, is increased by a prompt, complete followup 
letter. Of course, you don't want to waste time trying 
to "sell" leads that are inappropriate. For example, 



some inquiries call for product specifications beyond 
your range, and you won't want to respond to "stale" 
ones. Although a TOPS lead may be "fresh" less 
than a week old those in magazines or newsletters 
may be up to 2 months old. The buyer may have 
made his purchasing decision. 
Here are some tips on how to respond to a lead. 

1. Indicate its source who sent it to you. 

2. Describe your products fully. Attach brochures or 
specification sheets. 

3. Indicate your normal export shipping terms 
(F.A.S., C.I.F., etc.). 

4. Indicate your normal payment terms. 11 Don't be 
bashful! 

5. Tell how your products are packed for export. 

6. Include sufficient information so that the foreign 
firm can place an order. For example, tell the firm 
your minimum order, how quickly you can ship, 
etc. 

7. If appropriate, send a copy of your response to the 
trade lead source. The TOPS program is interested 
in receiving copies of replies. It likes to know what 
happens to leads it develops. 

8. Make a sales pitch! 

See page 101 for a sample of a letter in response to a 
trade lead. 

TO SUM UP: ADDITIONAL SALES LEADS 
POSSIBLE. You can increase the number of 
inquiries you get from foreign firms by seeking out 
trade leads. The U.S. Government has a low-cost 
trade lead service. Sources in private industry can 
provide more. You can also get your product 
catalogs or information about your product placed in 
foreign service posts, where local firms can see them. 



4 At this stage we recommend confirmed irrevocable letter 
of credit. 



YOUR COMPANY, INC. 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 



(A sample sales letter in reply to a lead developed by the U.S. Department of 
Commerce's Trade Opportunity Program.) 



Therma Kitchen Equipment, A.G. 
Kircher Strasse 125 
8952 Schlieren 
Zurich, Switzerland 

Attention: Mr. Heinz Mueller 
Gentlemen: 

The U.S. government has informed us of your interest in purchasing commercia 
cooking equipment. Our company, YCI, manufactures a line of infra-red warmers 
fired either by gas or electricity. The attached brochure describes in detail ou 
line of "Mr. Sizzle" food warmers. 

Our equipment is used in leading restaurants in the United States, and sold 
by the largest restaurant supply houses. Our product has special features noted 
in the catalog. 

Prices vary according to the quantity ordered as seen in our attached price 
sheet. These prices include the cost of export packing, normally special corro- 
gated carton containers. Shipment can be made within two weeks after receipt of 
a firm order. Our payment terms are irrevocable letter of credit confirmed by a 
U.S. bank. Our minimum order is 2 units. 

We look forward to your order. 

Qn n r-d va 1 \/ 



SECTION B 



IDENTIFYING SALES PROSPECTS IN FOREIGN MARKETS 
AND GETTING SOMEONE TO SELL FOR YOU 



INTRODUCTION. Many firms are happy with just 
replying to foreign inquiries and selling on an L/C 
basis. They may not have the time or resources to do 
more. But some firms may want to increase exports 
beyond this point. Their next step is to establish a 
regular sales effort in a few markets. This section 
describes how to do this. 

WHAT IS REQUIRED. By now we assume you 
won't have product problems (nothing's worse than 
complaints from customers thousands of miles 
away), and we also assume you can handle the 
mechanics of the export transaction. Now you will 
need some special attitudes to become a successful 
exporter. 

1 . Your firm must be committed to export. This com- 
mitment must start with your chief executive and 
be communicated to everyone down the line. 
Success in export takes the same kind of com- 
mitment that made you successful in the U.S. 
market. 

2. Responsibility for your export effort must be 
assigned to one person. It's O.K. to have your ex- 
port effort a part-time responsibility, but some one 



individual clearly needs to be in charge. It may be 
your chief executive; it may be your sales or 
marketing manager. 

3. You must have an export marketing plan. The 
reason for most export failures is lack of a plan. 

A FEW WORDS ABOUT YOUR MARKETING 
PLAN. But your export plan can be a simple one. As 
a minimum, it should include these elements: 

1. Selection of the best opportunities. What foreign 
countries will give you the most short-range 
business? 

2. How will you "exploit" the countries? In other 
words, can you develop a program for marketing 
tactics? 

3. Your export budget. (You must spend money to 
make it). 

Export marketing plans, of course, can (and often 
will) be far more detailed. But careful attention to the 
above three elements should be enough for the firm 
that wants to establish a sales effort on a few foreign 
markets. 



CHAPTER VII 



IDENTIFYING YOUR BEST FOREIGN MARKET PROSPECTS 



INTRODUCTION. U.S. products are regularly 
sold in over 100 countries. Fifty of these, however, 
account for 90% of U.S. exports. (See the box on page 
106) However, it is impossible (and unwise) for the 
new-to-export firm to do business in more than one 
or two markets initially. Thus, the new firm is faced 
with an immediate decision: what foreign market(s) 
offers the best opportunity? First, a preliminary 
screening can narrow prospects to no more than 10 
countries. No government publishes more 
information about foreign markets than the United 
States. An incredible amount is available, which can 
help any U.S. firm complete a preliminary screening. 
Secondly, a more detailed analysis will identify the 
one or two best foreign markets. 

PRELIMINARY SCREENING: U.S. EXPORT 
STATISTICS. Each month the Bureau of Census 
publishes a report showing all exports for the month 
and on a cumulative annual basis, by specific product 
category (seven-digit Schedule B), by country of 



destination. See page 107 for an excerpt of the 
December 1975 report. It's easy to get this data. An 
exporter can then quickly determine which countries 
are buying products like the ones he makes. 
Here are steps you can follow: 

1. Get the Schedule B Number for the product you 
are researching (see page 77 for a description of 
Schedule B Numbers which tells you how to 
identify the appropriate one). 

2. Consult the census annual reports for the past 2 to 
3 years, plus the most current report showing year- 
to-date statistics. All District Offices of the 
Department of Commerce have these reports on 
file. They might send you copies of appropriate 
pages if you can't stop by. 

3. Analyze the raw data you have collected. For 
example, identify the 10 most important markets 
for each year. Calculate the increases in export 
sales for your product category over the past 2 or 3 
years for the top markets. 



TOP FOREIGN MARKETS FOR U.S. GOODS 

(in millions of dollars) 

In 1974 these 50 countries bought over 90% of $100 billion in U.S. exports for that year. 



Country 

Canada 

Japan 

Germany, F. Rep. 
United Kingdom . 

France 

Mexico 

Brazil 

Italy 

Netherlands 



Imports 
from U.S. 

$22,464 
12,681 
5,399 
5,276 
4,088 
3,778 
3,434 
3,117 
3,869 



Country 

Argentina 

Indonesia 

Denmark 

Peru 

New Zealand 

Portugal 

Thailand 

Algeria 

Greece 



Imports 
from U.S. 

$617 
610 
599 
476 
467 
440 
424 
403 
403 



Singapore 1,169 Jamaica 

Sweden 1,043 Malaysia, West 

Iran 975 Austria 

Switzerland 945 Costa Rica 

Hong Kong 916 Ireland 

Philippines 826 Bahamas 

Israel 754 Panama 

India 719 Trinadad, Tobago. 

Norway 678 Morocco 



Source: Commerce America 



DETAILED EXPORT STATISTICS AVAILABLE 

The U.S. Government publishes detailed monthly export statistics which show the net quantity exported to 
each country, and the value of the shipment for some 3,000 product categories. A sample FT 410 Report 
(United States Exports of Merchandise by Country of Destination) is reproduced below. 



2198 



U.S. EXPORTS 



Table 2. Schedule B Commodity By Country Domestic Merchandise 

{The figure preceding country designation Canada is the number in the sample for Canada. "SC" at the end of an alphabetic commodity description indicates "Special Category" commodity. See Introduct 
explanation of Special Category, method of sampling low value shipments, certain types of shipments not classified by commodity, and other definitions and features of the export s 



mtiyol 
.ination 



Current month 



Net 
quantity 



Value 
(dollars) 



Cumulative, January to date 



Net 
quantity 



Value 
(dollars) 



Country of 
destination 






Net 
quantity 



Value 
(dollars) 



Cumulative, January to date 



Net 
quantity 



Value 
(dollars) 



Country ol 
destination 



Current month 



Net 
quantity 



Value 
(dollars) 



JAPAN 

AUSTRAL 

01H CTY.. 

TOTAL... 



7191506 



6 CANADA 

JAMAICA 

N ANTIL 

ARGENT 

SWEDEN 

NORWAY 

U KING 

NETHLDS 

FRANCE 

W GERM 

SPAIN 

LEBANON 

KUWAIT 

S ARAB 

QATAR 

ARAB EM 

OMAN 

BAHRAIN 

PAKISTN 

CHINA T 

LIBYA 

SUDAN 

NIGERIA 

07H CTY 

TOTAL 



7191508 



6 CANADA ..... 
MEXICO ......... 



ING .......... 

J.GIUM ....... 

FRANCE ......... 

SWITZLD ........ 

HG KONG ....... 

JAPAN ............ 

AUSTflAL ....... 

OTH CTY ........ 

TOTAL ......... 



107 
316 



11183 



85041 
426 294 



177 

57 

355 

1645 



247532 

51145 

364435 

2437113 



DRINKING-WATER COOLERS, 
SELF-CONTAINED, WITH MECHANICAL 
REFRIGERATION NO 



924 
21 
53 

173 

120 

173 

3 

63 
54 



11 
1786 

30 
231 
100 

47 
103 



60 

600 

4552 



143429 
1382 
11397 

33093 
29427 
39059 
1035 
17544 
12449 



3262 
252742 

7324 
42242 
15450 

7080 
27500 



14100 
93729 
752244 



4147 
214 
132 
285 
681 
211 
492 
206 
229 
235 
576 
220 
770 

5315 
124 
718 
252 
206 
105 
679 
856 
294 
120 

2766 
19633 



598990 
42129 
26940 
37352 

144 070 
53281 

109986 
60546 
47202 
46291 
90799 
48106 

188652 

790450 
26640 

144244 
40982 
33740 
28124 
54879 

175223 
67777 
28200 

543 142 
3427745 



SODA FOUNTAIN AND BEER DISPENSING 
EQUIPMENT, AND PARTS, NEC 



157828 
17563 
33369 
15142 

756 

1914 

4169 

1253 

76955 

306949 



1 128 125 
53393 
70265 
59899 
34348 
73702 
99590 
27529 
158083 
43437 
337724 

2086095 



7191509 AIR CONDITIONERS, AUTOMOTIVE NO 



FRANCE 

W GERM 

SPAIN 

YUGOSLV 

GREECE 

LEBANON 

IRAQ 

IRAN 

ISRAEL 

JORDAN 

KUWAIT 

S ARAB 

QATAR 

ARAB EM 

OMAN 

BAHRAIN 

PAKISTN 

THAILNO 

MALAYSA 

SINGAPR 

INONStA 

PHIL R 

HG KONG 

JAPAN 

AUSTRAL 

ALGERIA 

LIBYA 

CAMROON 

IVY CST 

NIGERIA 

ANGOLA 

REP SAF 

OTH CTY 

TOTAL 

7191512 



CANADA.... 
SWEDEN... 

U KING 

FRANCE.... 
W GERM... 

SPAIN 

REP SAF... 

OTH CTY... 

TOTAL.... 



7191514 



2 CANADA... 
MEXICO 



1430 
641 



148413 
na wo 



6389 
Tim 



725220 



6 CANADA.. 
MEXICO 



56 
90 

199 
11 
2 
13 
124 
122 
168 
43 
157 



117 
58 
60 

153 
6 

282 
19 



9 

59 

14 

202 

65 

2727 



25256 
52991 

82780 

21765 

2176 

52471 

45500 

139224 

227017 

50437 

193 188 



55560 
35181 
39952 
108723 
7088 
78385 
16765 



16881 
112270 
18635 
88247 
69692 
2104400 



91 

34 
252 
108 
170 
675 

67 
540 

25 

141 

1202 

2089 

67 
833 

52 
160 

26 
544 

91 
288 
453 

44 
977 
205 
173 

10 
107 

23 
167 
145 

67 

654 

487 

17641 



61559 

43534 

172695 

60787 

88148 

349652 

149097 

609394 

74171 

57647 

1064017 

1462614 

70926 

988815 

58858 

101399 

52934 

251808 

62144 

234037 

355181 

96043 

486087 

80579 

77078 

31517 

79121 

25977 

182749 

237 679 

83775 

490 486 

469 497 

13031590 



AIR-CONDITIONERS, NOT SELF-CONTAINED, 
HEAT PUMPS, NOT ROOM-TYPE NO 



58 
35 

5 
4 
27 

294 
19 

442 



20366 
54985 

3823 
1758 
22080 
136260 
18046 
257318 



438 
118 
52 
99 
109 
34 
436 
191 
1477 



AIR-CONDITIONERS, YEAR-ROUND, 
INCLUDING ROOF-MOUNTED NO 



363 
104 



358766 
116220 



2404 
266 
26 



201745 
115569 
28049 
70800 
30636 
28589 
218 100 
111772 
805 260 



2386898 
269164 
37655 



BAHAMAS 

JAMAICA 

DOM REP 

TRINID 

N ANTIL 

VENE2 

GUYANA 

PERU 

BRAZIL 

SWEDEN 

U KING 

FRANCE 

W GERM 

SWITZLD 

USSR 

SPAIN 

IRAN 

ISRAEL 

KUWAIT 

S ARAB 

ARAB EM 

INDIA 

PHIL R 

KOR REP 

HG KONG 

JAPAN 

EGYPT 

REP SAF 

OTH CTY 

TOTAL 



7191518 



6 CANADA 

MEXICO 

PANAMA 

BAHAMAS 

JAMAICA 

HAITI 

DOM REP 

VENEZ 

GUYANA 

ECUADOR 

U KING 

BELGIUM 

FRANCE 

LEBANON 

IRAQ 

IRAN 

SARAB 

ARAB EM 

SINGAPR 

DUII R 



1 

70 
5 

69 

34 

293 

4 



65 
36 
151 



1 
15 

15 
7 
2 

96 

30 
1 

76 
1561 



9750 
31088 

4330 
15906 

6232 
109763 

8146 

84797 
9283 
7175 
22754 
45454 
87707 

9830 
14370 



1564 
23523 

23153 
7500 
1554 

80927 

36358 
2061 

63983 
1042724 



COMMERCIAL TYPE N 
FREEZERS, NOT SELF 



282 
23 
13 

1 
24 

1 

10 
50 

3 

40 
127 

1 
44 

2 
12 

31 

1 
22 



241515 
27062 

3774 

1348 
31152 

2478 
11350 
30050 
12884 
47072 
120058 

2201 
38563 
20328 
37116 

27936 
3049 
65988 



NOTE WELL: The basic Census export trade report 
is termed FT 410: U.S. Exports of Domestic and 
Foreign Merchandise, Commodity by Country of 
Destination. But this report will not include shipments 
to Puerto Rico, 1 usually an important market for 
most U.S. goods. Export information on Puerto Rico 
is published in FT 800: United States Trade with 
Puerto Rico and with United States Possessions, a rep- 
ort that may be hard to find. Some District Offices 
will have the information. If the one nearest you does 
not, write: U.S. Trade Reference Room, Trade 
Analysis Staff, U.S. Department of Commerce, 
Washington, D.C. 20230. Chances are they will 
provide you with exports to Puerto Rico for your 
Schedule B product category. Ask for seven-digit 
export data. 

Example: Mullen Manufacturing Co., Inc., a 
minority-owned manufacturer of road paving 
equipment commissioned a preliminary screening 
to identify their best markets. Their Schedule B 
Number, which they obtained from the Department 
of Commerce, is 719.8010. Analyzing FT 410 and 
FT 800 reports for 719.8010, Mullen came up with 
the following markets, the best importers of road 
paving equipment indicated by the total U.S. exports 
for its category. 



Country 

Canada 

Iran 

Kuwait 

Venezuela..., 

Mexico , 

Sweden 

Spain 

Puerto Rico 



U.S. Exports 
(in 000 's) 

$7,552 

1,730 

1,150 

1,000 

928 

650 

532 

345 



The statistics will help you eliminate foreign 
markets. If "basket" category exports are small, 
then you will know exports for the product you 
are researching are even less! 

2. Export statistics are based on past performance, 
not always the best estimate of future potential. 

FASTEST GROWING MARKETS. Export 
statistics show past performance, but some countries 
may be a potential market for your product because 
of their rapid growth rate. In the past, they may not 
have imported products such as yours. See below for 
countries which will grow fastest between now and 
1990. 



THESE COUNTRIES ARE PROJECTED 
TO GROW FASTEST IN THE 
NEXT 15 YEARS 



Country 

Saudi Arabia . 

Iran 

Nigeria 

Taiwan 

Japan 

South Korea.. 

Brazil 

Yugoslavia.... 

Venezuela 

Portugal 

Romania 

United States. 



Estimated 

Growth 

Rate 

11.0 
10.8 
8.2 
6.7 
6.5 
6.4 
6.4 
6.4 
6.3 
6.3 
6.3 
3.1 



Note: Estimated growth in GNP 1975 to 1990 in '74 dol- 
lars. 

Source: Predicasts. 



LIMITATIONS TO WHAT EXPORT 
STATISTICS CAN DO FOR YOU. You must 
recognize potential limitations to Census' export 
trade statistics. 

1. Some products are lumped together with many 
others (some dissimilar) in certain Schedule B 
classification categories. They are known as 
"basket" categories. 

Example: Ping pong tables are included with 
roulette wheels, billiard tables, and other gaming 
tables. Thus, the best markets for just ping pong 
tables cannot be identified from an analysis of ex- 



The U.S. Department of Commerce is particularly 
interested in three of these fast-developing markets: 
Nigeria, Indonesia, and Venezuela. They have com- 
missioned in-depth research in all three to identify the 
top prospects for U.S. goods, research which also 
details how these goods are sold. This research is 
available for a small fee. If you are interested, check 
with the District Office of the Department of Com- 
merce nearest you. 

TARGET INDUSTRIES. The Department of Com- 
merce has identified 15 industries that it feels will 



industries. The research reports describe marketing 
practices, and pinpoint potential customers. 
Documents available: 

1. The original in-depth market research. The 
Department hires market research firms to 
develop the marketing information. Their 
individual country reports, frequently running 100 
pages or more, are available on request. 

2. Country Market Digest. Commerce publishes 8- 
to 10-page summaries of the in-depth original 
research for distribution. 

3. Global Market Survey (GMS). Once all Country 



Market Digests for a particular industry are 
completed, a "master" report is published with an 
overview of the export potential. 

If your firm's products fir a target industry cate- 
gory, then we suggest you request a copy of the Global 
Market Survey (GMS). Contact the closest District 
Office of the Department of Commerce. It will send 
you one, or tell you how to get a copy. After 
reviewing the GMS, ask for the Country Market 
Digest (more detailed) and the original in-depth 
surveys (still more detailed). Again, the District 
Office of the Commerce Department can provide the 
study or tell you how to get one. 



THESE 15 INDUSTRIES OFFER THE BEST OPPORTUNITIES 

FOR U.S. EXPORTS 

(According to the U.S. Department of Commerce's Target Industry Program) 



Industry 



Publication 
Date 



Biomedical equipment June 1973 

Computers and related equipment October 1973 

Electronics industry production/test equipment April 1974 

Printing and graphic arts equipment June 1974 

Electronic components October 1974 

Metalworking and finishing equipment January 1975 

Avionics and aviation support equipment May 1975 

Process control instrumentation July 1975 

Food processing and packing equipment August 1975 

Air/water purification & pollution control equipment December 1975 

Laboratory instruments February 1976 

Business equipment and systems May 1976 

Electric energy systems June 1976 

Communications equipment and systems August 1976 

Building products and construction equipment November 1976 

Extensive in-depth market research is planned or completed on these industries. 



OTHER SOURCES. Analysis of export statistics 
plus review of government foreign market research 
should give most firms sufficient information to 
narrow potential markets to no more than 10. If you 
feel this information is not available or not detailed 
enough, here are some additional "market research" 
sources: 

1 . Trade Associations. Many U.S. trade associations 3 



2. Government Industry Specialists. The Department 
of Commerce, the Foreign Agricultural Service 
(FAS), the International Trade Commission, and 
other U.S. Government agencies have specialists 
who follow the international trends of most 
industries. They will share their information with 
you, and even suggest other sources. Page 110 
describes how to contact. 



international marketing trends and conditions. A 
few have published in-depth research. Contact the 



"If you are unfamiliar with all the publications covering 
your industry, check Business Magazines Rate and Data 
Service published by Standard Rate and Data Service, Inc.; 
5201 Old Orchard Road; Skokie, 111. 60706. It lists 4,000 
U.S. trade publications. Business libraries carry this 
reference. 



duct and industry. 4 

The World Trade Institute. A computerized biblio- 
graphy of thousands of market reports and pub- 
lications is maintained by the World Trade 
Institute in New York. The average cost for a 
search, according to its officials is about $5. You 
will receive a bibliography plus a brief description 
of each document and how to get it. Contact the 
World Trade Information Center; One World 
Trade Center; New York, N.Y. 10048. 



YOU'LL FIND INDUSTRY AND PRODUCT EXPERTS 
IN THE U.S. GOVERNMENT 



COVERAGE 
Manufactured Goods 

Agricultural Products 
Any Product 



ADDRESS 

Bureau of Domestic Commerce 
Department of Commerce 
Washington, D.C. 20230 

Foreign Agricultural Service 
U.S. Department of Agriculture 
Washington, D.C. 20250 

Office of Trade and Industry 
International Trade Commission 
Washington, D.C. 20436 



TELEPHONE 

(202) 377-2000 

(202)477-2971 
(202)386-6168 



ANALYZE THE INFORMATION YOU'VE COL- 
LECTED TO NARROW YOUR FOREIGN 
MARKETS. You should have enough information 
to narrow your prospective markets to no more than 
5 or 10. Consider past exports. Consider nearness to 
the United States. Consider projected growth rates. 
Your next task is to narrow your choice to the best 
markets. Developing an export business in more than 
three foreign markets will require resources far 
greater than you have available. Thus, narrow the list 
to only one or two. You will have to obtain 
information about trade barries that may bar im- 
ports of your products in specific foreign markets and 
you will try to determine exactly how your products 
are normally sold there. 

BARRIERS TO YOUR PRODUCT. The two kinds 
of barriers your product will face in a foreign market: 

1. Tariffs. Foreign governments levy "taxes" called 
tariffs (or duties) on most goods coming into 
their countrv. First, the ffovernment mav want to 



icemaker, valued $1,000 C.I.F. Liverpool, would be 
$],055 after payment of the duty. 

2. Nontariff barriers. In addition to tariffs, countries 
frequently have other barriers to imports. Some 
establish quotas so that the total amount of a 
particular product is limited. Other governments 
insist that imported machinery must conform to 
national standards, sometimes difficult to prove. 

Example: The U.S. Government restricts the 
amount of butter that can be imported in the United 
States through establishment of quotas. Imports of 
certain electrical manufactured goods into Germany 
are not possible unless the product has received a 
government inspection sticker, sometimes quite 
difficult to obtain. 



WHAT BARRIERS EXIST FOR YOUR PROD- 
UCT: It's a simple matter to determine tariffs 
(special taxes on imports), but nontariff obstacles 



they can put you in toucn witn wasmngton tanrr 
experts who follow trade regulations and restrictions 
abroad. Here is how to request the information. 

1. Describe your product to the tariff specialist. It 
will help if you know the U.S. Schedule B 
Number. 5 The tariff specialist will have to identify 
the appropriate classification number for your 
product. 

2. Indicate the country where you want to sell. 

3. Ask tariff rates on your product category. Note: 
Sometimes replacement parts have different rates 
(and different product category numbers). 

4. Ask for any nontariff barrier information. 

5. Ask the specialist's opinion on the magnitude of 
barriers identified. He'll be familiar with the 



5 Most foreign countries have their own system for 
classifying goods. Many subscribe to a system called 
Brussels Tariff Nomenclature (BTN). 



tne tanti barrier. 

FOOD PRODUCTS: A SPECIAL SERVICE. The 

U.S. Department of Agriculture offers a unique serv- 
ice for suppliers of food products who want to 
identify potential barriers abroad. USDA food 
specialists stationed abroad will check out all 
potential barriers. For information about this free 
service, contact: Foreign Agricultural Service, U.S. 
Department of Agriculture, Washington, D.C. 
20250, attention: New Products Testing System. 

DRAWING CONCLUSIONS. Compare and 
contrast tariffs for each country. For example, Puerto 
Rico will have none. Compare the tariff rate for your 
product with the average rate for the country as a 
whole. Rates in Mexico, for example, are generally 
much higher than those of European countries with 
similar products. Thus, a high tariff rate in Mexico 
may not be as severe a barrier as an equivalent rate 
levied by a European country. Begin eliminating 
countries where barriers seem onerous; on the other 
hand, focus on markets with few barriers. 



WHO WILL SELL YOUR PRODUCT? 

(These are the kinds of firms you are likely 
to find handling the goods of U.S. suppliers) 

There are many different types of firms abroad that 
sell U.S. products. The principal ones are com- 
mission (sales) agents, often called manufacturer's 
representatives, and importing distributors' 
wholesalers. In a few cases, a foreign manufacturer 
will take on a U.S. product to sell, which 
complements his own product line. In Africa and 
Japan, large trading companies will do the bulk of 
both exporting and importing. In Eastern Europe, 
government-owned state trading organizations do all 
exporting and importing. 

1. The export commission agent or representative? A 
commission agent acts as the sales representative 
for foreign suppliers. Small firms usually have no 
more than five product lines. Some are large, 
employ several salesmen, have branch offices, and 
handle hundreds of lines. A commission agent 
generally does not stock, but may provide 
servicing. The agent generally sells through a 
network of distributors (wholesalers) and/or 
dealers (retailers). But he also can solicit orders 
directly from end-users (manufacturers or 



contractors, for example). In all cases, the U.S. 
supplier ships to and bills the customer, not his 
agent, in the name of his U.S. manufacturer and 
forwards the orders to him. 

The agent's compensation, "the commission", is 
based on a percentage of the sale (most often the 
F.O.B. factory value). It is normally paid after the 
customer pays the U.S. manufacturers. The agent 
often advises suppliers on his customer's credit 
standing and he helps with tardy payers, as he is 
the "man on the spot." Commission rates vary 
according to product, order size, and other 
factors. 

Example: A home appliance manufacturer has a 
standard commission rate of 5%. A manufacturer of 
scientific instruments has a standard rate of 10%, 
except in Italy where a 20% rate was set. But the 
agent was required to spend his own money in 
extensive market promotion. 

A commission agent usually works on an exclusive 
territory (geographical) basis, and he won't handle 
your competitors. 7 

Example: A commission agent located in San Juan, 
Puerto Rico, represents five U.S. companies in the 
building products field. He works closely with large 



In larger foreign countries, a U.S. manufacturer may 
have more than one commission agent covering a particular 



replacement parts. 

2. Distributor (who imports). A foreign distributor is 
a merchant who buys from a U.S. supplier at a set 
price ans resells to end-users, retailers, ot smaller 
distributors. The distributor then sers his selling 
price (sometimes after consulting the supplier). 
There are two types of distributors: exclusive and 
nonexclusive. In return for exclusive selling rights 
from a U.S. supplier, the distributor often assumes 
fill responsibility for local sales promotion and 
servicing. The exclusive distributor will not bandle 
competitive products. He stocks inventorym has 
his own salesmen, and extends credit. He will in- 
stall and service. Thus, his U.S. supplies gives him 
a much higher price break than an agent's com- 
mission because he assumes greater risk. 

The nonexclusive distributor functions in munch 
the same way, but the U.S. manufacturer does not 
give him an exclusive sales territory. 

In some countries the functions as a commission 
agent as well. Then he sells from inventory, but he 
will act as an agent in many transactions perhaps 
on large orders from end-users passing the order 
back to the U.S. supplier and taking a commission 
on the sale. 

Distributors frequently established a dealer 
(retailer) network, and they also sell directly to 
end-users. It depends upon the product and the 
size and traditions within the specific market. 

Example: OTESCA is a large, well-financed 
Venezuelan distributor of road construction, in- 
dustrial, and automotive equipment. It handles hun- 
dreds of lines from United States, European, and 
Japanese suppliers. Not only does it sell from inven- 
tory, but it will solicit orders on a commission basis. 
The firm acts as both an agent and distributor in the 
name of their supplires. 

3. State trading organnizations. In the Soviet Union , 
Egypt, Peoples Republic of China, and other 
Eastern European and African countries, govern- 
ment agencies called state trading organizations 
handle all imports. These organizations buy and 
sell on their own account. 

Example: The Nile River Company, and agency of 
the Egyptiian government, handles imports of all 
rice. Tractor and Engineering Co. , another agency, 
imports industrial equipment. 



show their importance as an importer, Japan last 
year imported $11 billion in U.S. goods. Trading 
companies accounted for more than 80% of that 
total. 

In some transactions, the company buys on its 
own account, ans it will also act as a commission 
agent. 

Example: Mitsui and Company is a gigantic 
Japanese corporation with over $4 billion in annual 
sales. Its import arm handles more than $2 billion in 
U.S. goods annually. It represents several hundred 
U.S. firms in Japan. 

The importes goods are destined for other Mitsui 
companies or independent customers. 



HOW ARE YOUR PRODUCTS SOLD? A second 
question to answer: How do products similar to mine 
normally get to customers? Ideally, you'll want to 
start your export efforts in those countries where the 
distribution system is similar to the one you use in the 
United States. You won't want to start out where 
marketing is different. For example, selling in eastern 
Europe and the People's Republic of China (PRC) is 
not at all like selling in the United States Government 
agencies control and conduct trade. Selling in Japan 
is also different. On the other hand, marketing in 
Mexico, Canada, Puerto Rico, most of Latin 
America, and Western Europe will be similar to your 
sales efforts in the U.S. market. 

Several sources can help you find this information: 

1. Market Factors in (Foreign Country). The Com- 
merce Department has published a description of 
marketing practices for most countries. Check 
with the District Office of the Department of 
Commerce. If they cannot supply you with the one 
you want, they will tell how to order one. 

2. Market for U.S. Agricultural Goods in (Foreign 
Country). The Foreign Agricultural Service has 
prepared in-depth descriptions of how agricultural 
products and food products are marketed in 
selected countries. To find out which are available, 
contact the Foreign Agricultural Service, U.S. 
Department of Agriculture, Washington, D.C. 
20250. 

3. Help from the private sector. To find out what's 
available and a lot of information is available 
ask for a search of the World Trade Institute's 
computer-based bibliographic file. Contact World 
Trade Information Center, One World Trade 



4. Foreign country marketing specialists. The U.S. 
Department of Agriculture (USDA), the 
Department of Commerce, and other agencies 
have specialists who follow foreign marketing 
trends. Contact the nearest District Office of the 
U.S. Department of Commerce for information 
on who they are and how to get in touch with 
them. 

5. Talk with an experienced exporter. Nothing beats a 
briefing by someone selling the same type of prod- 
uct. Most exporters are flatteredwhen asked for 
advice. Again, the U.S. Commerce's District 
Office can probably put you in touch with an ex- 
porter near you. 

GETTING YOUR PRODUCT TO 
MARKET. Your products will get to your foreign 
customers through different types of local sales 
organizations. 

1. Through an exclusive importing distributor. He 
imports directly from the U.S. supplier and sells in 
his local market to smaller distributor- 
wholesalers, and/or to a network of dealers. Your 
distributor will also sell to end-users 
(manufacturers, cooperatives, contractors, etc.) 

Example: A U.S. manufacturer of medical 
instrumentation sells in Switzerland through 
Laubscher & Co., A.G., an exclusive distributor. 
This distributor purchases directly, and generally 
marks up the price by 30%. 

2. Through a commission agent (or representative). A 
commission agent solicits orders and passes them 
on to the U.S. supplier, who then ships directly to 
the foreign customer. The agent also sells to 
manufacturers or through a network of 
distributors and dealers. 

Example: A U.S. manufacturer of consumer plastic 



products sells in the United Kingdom through 
Spearhead Selective Sampling a commission agent. 
Spearhead solicits orders from wholesalers and 
department stores. 

3. Sell direct to customers. Customers are so few in 
some countries, the U.S. manufacturer sells to 
them directly. 

Example: A U.S. manufacturer of automotive 
panel instruments sells directly to Scandia- Vabis, a 
Swedish truck manufacturer. 

As your export business expands, you may use 
different methods to reach customers in different 
countries. For example, a home appliance 
manufacturer uses a commission agent in Puerto 
Rico and Canada, a trading company in Japan, and 
an importing distributor in the Philippines. 

WHAT IS BEST FOR YOU? How will you sell in 
the one or two markets you have selected? If the 
markets are large, you probably will select a com- 
mission agent or representative. Then he will be 
responsible for setting up proper distribution 
(generally you will find it easier to establish a com- 
mission agent or representative than a distributor). If 
the markets are small, or if yours is a product that 
requires inventory and/or servicing, you may want to 
seek distributors. 

TO SUM UP. You will quickly be able to narrow the 
number of potential markets from 50 to no more than 
10 by analyzing U.S. export statistics, or by access to 
foreign market research reports. In narrowing the list 
to the one or two best markets for your products, find 
out the potential import barriers and analyze the sel- 
ling methods needed. You won't have to take a trip 
abroad to select those markets that offer the most 
potential. A wide range of market research 
information is available. 



CHAPTER VIII 



MARKET PENETRATION: WHAT YOU WILL NEED 



INTRODUCTION. You will find it advantageous 
to develop a simple marketing plan. Also, you will 
have to prepare catalogs, specification sheets, and 
acceptable price lists. These are minimum 
requirements. Your prospective agent 1 will be unable 
to sell your products successfully without these basic 
tools. 

MAKING A SIMPLE PLAN. At this point, you 
have selected the best market and made a decision on 
what form of distribution you will use to reach 
customers in this market. Your next step is to develop 
a simple market plan. As a minimum, your export 
plan should include: 

1 . A statement of your objectives. These should be 
realistic and stated in terms you can measure. 

Objective: $15,000 in orders within 6 months. 

Objective: To "sign" an agent in Puerto Rico 
by (name date). 

2. Strategy/choices. As an exporter, you have 
several strategy choices. You can modify your 
product (expensive to do), you can raise or lower 
your prices, you can change one of several 
marketing methods, and you can spend a great 
deal on promotion or none at all. 

3. Budget. Budget for your efforts. Items to 
consider: personnel, promotion material such as 
catalogs, price sheets, and service manuals (a full- 
time export manager will probably run $50,000 
or more. That includes his salary, traveling 
expenses, etc. The new exporter that focuses on 
just one or two markets can set a budget of $500 
per country). 

TALK WITH A SPECIALIST. At this point, talk 
with someone experienced in export. They'll help you 
establish a budget and review your plans. The Com- 
merce Department District Office is a good place to 
start. (See page 1 15 for a description of what they can 
do for you.) You can register your firm on their 
computer-based list of U.S. firms interested in ex- 



porting. This list is used by the Department of Com- 
merce to alert exporters about activities such as 
upcoming foreign trade shows. 

YOUR CATALOG OR SPECIFICATION SHEET: 
ESSENTIAL! Forget an elaborate brochure. In fact, 
your domestic brochures with "inserts" giving export 
information may work out. The export "insert" 
should include the following information: how your 
products are shipped, how they are packed, and ship- 
ping details such as dimensions, gross and net weight, 
etc. 

YOUR EXPORT PRICE SHEET: ALSO 
ESSENTIAL! Most experienced importers want to 
know the cost of your goods at a U.S. port of exit. 
They're experienced in estimating ocean (or air) 
freight and insurance charges. Therefore, try to 
develop an export price that includes inland freight 
and a "cushion" to cover additional costs (freight 
forwarder fees, commissions). Also indicate 
minimum order quanities and estimated cost of ex- 
port packing. (See page 116 for an example of a simple 
export price sheet.) 

Many exporters use "list prices" (the price to the 
final customers) plus discount sheets given to their 
foreign agents. 2 

Most new exporters simply use their domestic price 
plus inland freight, packing, etc. This may result in a 
price that is too high (or possibly too low). You want 
a price that returns a suitable profit, yet low enough 
to be competitive. Some experienced exporters 
recommend eliminating domestic marketing costs 
(such as advertising and selling expenses) from their 
export price. 3 

Note: Your price should also include a "cushion" 
to cover additional costs (freight forwarder's fees, 
etc.) and to cover commissions. 



2 Sorne exporters use different discounts in different 
markets. They attempt to "fit" their price to the specific 
market. 

3 More experienced exporters frequently take into ac- 



-niint marcrinol (nr inr > rfmf=>ntaU 



t-rirvc TTif>> etart w/ith 



20 WAYS COMMERCE DEPARTMENT DISTRICT OFFICE SPECIALISTS 
CAN HELP YOU SOLVE YOUR EXPORT PROBLEMS 

1. A specialist can help you decide whether you should export, and if so, how to do it. 

2. They can help you with your response to foreign inquiries. 

3. They can tell if your product is exported and where. 

4. They can tell you the special Schedule B Numbers (needed for your export declaration and useful in 
checking out trade statistics) and the SIC code. 

5. They'll brief you on how air and ocean freight forwarders help you. 

6. They'll help you get government-sponsored foreign market research on your products. 

7. They can tell you (or find someone who can) what the import duties are for your products. 

8. They can tell you where you can get information on how to do business abroad, etc. 

9. They'll advise you on U.S. export controls and whether you need a special export license. 

10. They'll tell you how to get more inquiries from abroad. Specialists help you complete an application for the 
Trade Opportunity Program (TOP). (See page 97.) 

1 1. They'll tell you how to find foreign agents and/or distributors. A specialist can help you complete an ap- 
plication for the Agent Distributor Service (ADS). (See page 121.) 

12. They'll tell you how to develop lists of potential customers in all world markets. They'll help you apply for 
the Export Mailing List service. (See page 121.) 

13. Specialists tell you how to get background and credit reports on foreign firms. They'll help you apply for a 
World Traders Data Report. (See page 11 8.) 

14. They'll tell you what U.S. Government trade shows will feature products like yours and where they will be 
held. Should you decide to exhibit, they'll help you apply and provide you with tips on making your exhibit 
successful. 

15. A specialist can give you tips on foreign travel. 

16. They'll tell you about the services of Export Management Companies and how to find one (See PART 
THREE). 

17. They'll brief you on export financing and export credit insurance. They can put you in touch with the 
Export-Import Bank of the United States and the Foreign Credit Insurance Association. 

18. They can introduce you to a banker who is active in foreign trade. 

19. They can put you in touch with experienced exporters and world trade clubs. 



JOHNSON PRODUCTS CO. INC. 

Minimum Order U.S. $500. Export Packing at Cost. All Prices F.O.B. 



PRICE SHEET 

Port of Exit. 



PROFESSIONAL 



CODE 
NO. 


SIZE 


SUGG. U.S. 
WHOLESALE NET COST 
PRODUCT PRICE, EACH PER DOZ. 


CASE 
PACK 


SIZE & WEIGHT 
PER CASE PACK 


CASES 
PER 
PALLET 


015 


16 oz. 


Ultra Wave Hair Culture (Straightener) 


$1.50 $10.80 


1 doz. 


0.46 cu. ft/22 Ibs. 


110 


060 


4% Ib. 


Ultra Wave Pre Creme 


3.25 23.40 


VS*a. 


1.00 cu. ft/32 Ibs. 


42 


101 


16 OZ. 


Ultra Sheen Creme Satin Press 


3.60 25.92 


Idoz. 


0.46 cu. ft/16 Ibs. 


121 


115 


4lb. 


Ultra Sheen Creme Shampoo 


4.25 30.60 


Va doz. 


1.0 cu. ft/28 Ibs. 


56 


120 


16 oz. 


Ultra Sheen Duo Tex Protein Conditioner 


3.95 28.44 


1 doz. 


0.36 cu. ft/15 Ibs. 


115 


125 


16 oz. 


Ultra Sheen Dand A Rinse Concentrate 


1.25 9.00 


1 doz. 


0.36 cu. ft/15 Ibs. 


115 


130 


16 oz. 


Ultra Sheen Shampoo Concentrate 


1.75 12.60 


Idoz. 


0.36 cu. ft/15 Ibs. 


115 


140 


15 oz. 


Ultra Sheen Protein Creme Conditioner 


3.30 23.76 


1 doz. 


0.30 cu. ft/15 Ibs. 


120 


145 


14 oz. 


Ultra Sheen Creme Base 11 


1.25 9.00 


1 doz. 


0.46 cu. ft/20 Ibs. 


no 


150 


16 oz. 


Ultra Sheen Creme Relaxer#2 Regular 


3.65 26.28 


Idoz. 


0.45 cu. ft/22 Ibs. 


no 


153 


16 oz. 


Ultra Sheen Creme #2 Super 


3.65 26.28 


Idoz. 


0.45 cu. ft/22 Ibs. 


110 


155 


32 oz. 


Ultra Sheen Neutralizer Shampoo 


2.25 16.20 


1 doz. 


1.0 cu. ft/29 Ibs. 


55 


160 


32 oz. 


Ultra Sheen Rinse N Set 


1.25 9.00 


Idoz. 


1.0 cu. ft/29 Ibs. 


55 


162 


1 Gal. 


Ultra Sheen Super Setting Lotion 


5.00 36.00 


Vi doz. 


1.0 cu. ft/37 Ibs. 


48 


163 


8 oz. 


Ultra Sheen Hold-N-Sheen Dispenser (Empty) 


0.60 4.32 


1 doz. 


0.39 cu. ft/1.5 Ibs. 


189 


_ 


- ' 


_ . Jig 




Ot* 


1 <^^BB * 


1'fl 


VgiJf .^3L?t? 



PRICES QUOTED: F.O.B. U.S. PORT OF EXIT 
MINIMUM ORDER: $500 NET 
CASH WITH ORDER DISCOUNT: 3% 

EXPORT PACKING: AT COST (MINIMUM PALLET ORDER $12.00) 
INLAND FREIGHT: PREPAID TO U.S. PORT OF EXIT 

INSURANCE: FOR YOUR ACCOUNT 
CREDIT TERMS: IRREVOCABLE LETTER OF CREDIT OR SIGHT DRAFT D/P 

PROMOTION AND ADVERTISING MATERIAL 
BY MUTUAL ARRANGEMENT. 

CABLE ADDRESS: JPCINT 

TWX: 91 0-221 -11 78 



CHAPTER IX 



FOREIGN AGENTS: PICKING THE RIGHT ONE 



INTRODUCTION. Your selling effort abroad 
depends on the selection of a competent and 
motivated agent or distributor. 1 An agent has the 
reputation of your company in his hands as well as 
your future in his market. Yet, he is really only tied to 
you by the profit he makes from sales. 

This chapter discusses how to select, evaluate, and 
support agents. Selection is a two-step process. 
Selecting agents requires time, patience, and 
discipline. First, you must develop a list of several 
possible agents per market. Then narrow the list to 
your first choice and a few backup candidates. A 
common export failure: agency relationships are 
entered into much too lightly. Thus, exporters 
"throw away a market" and "buy trouble" by cho- 
osing the wrong one in the first place. Experienced 
exporters say that selection of adequate agents is one 
of the biggest barriers to establishing a successful 
export business. 

YOUR FIRST STEP: THE AGENCY 
PROFILE. Before you develop your list of 
prospects, go through the following "exercise" to 
clarify your objectives: 

1. Size of firm. Do you want a one-man firm or a 
large, perhaps better-financed one with many 
salesmen? 

2. Does it matter if the agent has competing prod- 
ucts? 

3. Financial needs. Will you need the foreign agent 
to invest his money in market promotion, 
inventory, or servicing equipment? 

4. The agent's existing business. What kinds of 
customers should he have? 

5. Degree of know-how required. What specialized 
marketing, technical, and sales experience or 
expertise is required of the firm and its 
personnel? 

6. Facilities. What physical facilities (warehouse, 
branch office) are needed for stocking and 



The answers to those questions will help "paint the 
picture" of the ideal agent. 

AGENT DISTRIBUTOR SERVICE (ADS). It 
develops "live" agent prospects in most world 
markets. U.S. firms submit requests for an agent 
"search" to the Department of Commerce. Their 
requests are then sent to U.S. Foreign Service posts, 
where 2 State Department personnel (usually the com- 
mercial attache) personally contact local firms on the 
U.S. manufacturer's behalf. If local firms are 
interested, this information is cabled back to the 
Commerce Department, who then immediately sends 
it to the ADS requester. The service takes up to 3 
months. 

Commerce processes several thousand ADS 
requests each year, and one out of four requestors 
signs up one of the suggested firms. The fee: $25 per 
country. See page 1 2 1 for a sample of a filled out ADS 
form and a sample of the information provided upon 
completion of the search. 

ADS forms and help in completing them are 
available at your District Office of the Department of 
Commerce. A word of caution: be precise as to the 
type of agent wanted. Include literature on both your 
product line and your firm. You must make sure that 
the Foreign Service post has adequate information on 
you and your products so a good "selling job" can be 
done. 

Remember followup! The Foreign Service post 
has made an effort; foreign firms have stated interest. 
If your plans are delayed, write a letter saying so. If 
you make other arrangements, show "good 
manners" and let them know. 

EXPORT MAILING LIST. The Department of 
Commerce has the names of 150,000 foreign firms in 
a computerized file called the Foreign Traders Index. 
The list is broken down by the type of firm 
(manufacturer, commission agent, distributor, 
wholesaler, etc.), each classified by what it makes or 
sells. You can buy lists of names (called an Export 



Example: A U.S. audio-visual manufacturer looking 
for representation in Venezuela wanted a list of 
Venezuelan importers who sell similar equipment, so 
it ordered an Export Mailing List. In 2 weeks, the 
firm had a print-out of 75 Venezuelan firms. Cost: 
$14.50. 

For this Export Mailing List service, check with 
the District Office of the Department of Commerce 
for an application. But if you plan to use it, we 
recommend a telephone call to Washington-based 
experts who have good advice on selection criteria 
and print-out format. Contact: Export Information 
Division, Bureau of International Commerce, U.S. 
Department of Commerce, Washington, D.C. 20230. 
Telephone: (202) 377-4684. 

A word of caution: the 1 50,000 names on the FTI 
list represent only a portion of the business firms in 
each industry. New and important companies may 
not be listed. (There isn't a list for Puerto Rico.) 

OTHER SOURCES FOR PROSPECTIVE 
AGENTS. You can add to your list of candidates by 
checking these sources. 

1 . The Export Department of manufacturers 
making a complementary product. Their agents 
may be qualified to handle your product. 

2. The Export Department of competitors. They 
won't help you directly, but look at their sales 
literature or advertisements. They often list 
names and addresses of their foreign agents. 

3. Trade associations have executives who follow 
international business trends. May have lists of 
prospective agents. 

4. Business magazines, particularly those oriented 
to export. (There are about 50.) For example, 
Export Magazine keeps files on active agents. 

5. Commercial directories are published for virtual- 
ly every industry in every country. For example, 
Toy Trader Yearbook lists all importers of toys 
and games in the United Kingdom. Ask your 
local library to help you identify and obtain 
directories. 

6. Your freight forwarder may know of important 
exporters. 

7. Commercial banks with international expertise 
usually have lists of agents. The District Office of 
the Department of Commerce can tell you the 
best ones to contact. However, if you're not a 
customer, they may not want to share 



On the other hand, hundreds of firms have selected 
and worked with foreign agents without such a trip. 
What is best for you depends upon your resources. If 
you can't visit the foreign market, then avoid a 
formal appointment. Opt for an informal 
arrangement to be formalized only after your "trial" 
period. 

YOUR FINAL CHOICE: SEVEN QUESTIONS 

TO ASK. Here are seven basic questions we think 
you should ask about prospective agents. 

1. What industry or industries does he cover? 

2. Who are his customers? (by type of firm, by 
name) 

3. What other U.S. product lines does he have? 

4. What are his financial resources? 

5. What are his particular marketing strengths? 
(advertising, direct sales calls, etc.) 

6. Who will sell your product? (sales background 
and other sales responsibilities) 

7. Does he pay his bills? 

The three basic sources of answers to these seven 
questions are (1) the U.S. Government, (2) other U.S. 
firms who trade with the agent, and (3) the agents 
themselves. 

GOVERNMENT HELP: WORLD TRADERS 
DATA REPORT (WTDR). You can get concise 
background reports on all foreign firms from the 
U.S. Department of Commerce, which sells a service 
called World Traders Data Report. Cost: $15 per re- 
port and it's worth it! The report will have credit 
financial, and commercial data. A typical WTDR 
lists the following business and financial information 
on any firm: the year established, marketing 
methods, product lines (both United States, 
European and Japanese), the local reputation in trade 
and financial circles. U.S. exporters buy nearly 
50,000 of these reports every year. If the report is on 
file, you'll get it in a week. But it will take up to 2 
months to get one if the firm is not on file. See page 
123 for a sample WTDR. A WTDR not only will give 
you good background information, it can definitely 
help you make your final selection because: 

1. A WTDR lists other U.S. companies that do 
business with the agent. You can contact their 
firms for first-hand information. 

Example: Lines 19 and 20 of the sample report for 



firm's reputation is questionable, the 
government will not recommend it. 

Example: The last line of the sample report: 
"Consulate recommends subject as an excellent 
trade contact for U.S. firms." 

Commerce Department District Offices have ap- 
plication forms and will help you complete one. Once 
you receive your WTDR, they will also help you 
interpret the information. Payment must accompany 
your order. 

WRITE TO THE AGENT. If you don't want to use 
WTDR's because of cost or delay, (some take 30 days 
or longer), then write each firm asking about their 
interest in handling your line. For your agent letter: 

1 . Tell him (positively!) that your products will help 
increase his profits. 

2. Using U.S. export statistics, refer to your prod- 
uct's chances in his country. 

3. Sell your company and its products. List im- 
portant U.S. customers (names he will recognize), 
product features, and competitive advantages. Be 
sure to mention any sales to customers in his 
market! 

4. Ask the agent: his business; sales territory; what 
other U.S. products does he handle, etc. 

5. Ask him for an appraisal of your product's 
potential and what, in his opinion, will be needed 
to make sales (such as price or product 
adjustment). 

6. Ask him if he's interested in'handling[younprod- 
uct. 

You can do this by air mail letter. See page ??? for a 
sample letter to an agent prospect. 

But think also of a telephone call. Rates are 
probably cheaper than you think. (Ask your 
telephone company for the cost of a 5-minute call). 
And 5 minutes of conversation can elicit a lot of 
information. But if you telephone, write in advance 
so the agent will be prepared (and available). The box 
below gives tips. 



TIPS FOR TELEPHONE CALLS TO 
FOREIGN FIRMS 

1 . Be aware of time differences and time your call 



annrr\rri 



iatph 



voice conveys a mental image of your 
personality, so be tactful and tasteful. 

5. Maintain clear detailed notes before you for a 
well-organized delivery that will enable 
maximum usage of conversation time. The 
manner in which you express yourself conveys an 
indication of your skill and intelligence and your 
story may be the prospect's only clue to your 
company and your product. 

6. Always confirm what you understand any 
agreements to be. Clarify matters during the 
telephone conversation rather than run the risk 
of an embarrassing and costly misunderstanding 
later. 



NARROWING YOUR SELECTION. Some firms 
will not respond. Others will give you very sketchy 
information. Eliminate them. But those that do 
answer may still present problems to the new-to- 
export company. 

1. Successful, well-established agents are very 
selective about additional product lines. They're 
cautious about dealing with firms that are 
inexperienced in export. It will take a superior sel- 
ling effort to convince them. Of course, if your 
product is unique, you won't have problems. 

2. The agent who says he is interested in your line 
may not have the contacts or track record to sell 
your product. If he's a distributor and does not 
have the resources, he will ask you for financial 
help. 

Another trade-off is large versus small. A large 
firm will have many salesmen, but your product may 
get lost among the hundreds of other lines. A smaller 
firm can devote more time to your products, but it 
may lack the resources needed for full market 
coverage. You should be used to this kind of a choice: 
you already faced it in the U.S. market. 

If the agent gives you U.S. references, call them at 
once for a candid evaluation. U.S. exporters usually 
exchange this information fully. 

WHO IS CHOOSING WHOM? One experienced 
U.S. exporter says, "In the end, a good agent selects 
the U.S. firm, it's not the other way 'round. 
Therefore you must sell the agent on the advantages 
of your lines." Remember, the agent has the fol- 
lowing requirements: 

1 HP. must mfllfp. a nrnfit nn unur linp. Hp' 



ii^^j L\J i c/rvivio vv 1 1 n i V^LJ rv /\VJJDI> i . i>u 

matter how you select an agent, there are a number of 
points still to be settled. 

1. The rate of commission (if a commission 
representative) or the price discount (if a 
distributor), how to calculate them (usually the 
F.O.B. factory order value), when commission 
payment is due (if they use a "commission man" 
most U.S. firms will wait until the customer pays 
in full). 

2. The support your agent wants i.e., sales 
promotion material (and who pays for it), 
advertising allowances. 

3. Responsibilities you expect from your agent 
i.e., product installation, servicing, stocking, 
special promotions. 

4. Pricing and instructions on orders i.e., 
minimum order size, policy on samples, credit 
information on prospective customers. 

5. Termination arrangements. 

There are other "hidden" ones. For example, you 
may sell directly to a manufacturer in your agent's 
territory or one of your U.S. customers may resell to 
someone there. In this case, your agent will want 
"protection," particulary if your product . needs 
servicing. Some exporters give commission 
protection, but at a reduced rate. 

Many agents are happy with a verbal agreement 
with an agent. Others prefer an exchange of letters 
stating mutually-agreed-upon points. Still others 
hold out for a formal written sales agreement 
(contract). 

Whatever agreements you make, insist on a trial 
period of 6 months to a year. 

ESSENTIAL: CARE AND FEEDING OF YOUR 
AGENT. Many exporters worry about the courtship 
and the "marriage ceremony," then ignore the 
marriage. Exporters should always supervise and 
motivate the agent's performance to fully exploit the 
market. Here are six suggestions to get him "on your 
side": 

1. He needs education on what your product does, 
what U.S. industries use it, and how to sell it. 
Don't hold back on the sales points. Tell him 
what promotion techniques have been effective. 
Do this periodically! 

2. Answer his correspondence promptly and 



price sheets, consider sending them by air. 

3. Take special care with export shipments. Make 
sure your shipping department doesn't try to 
"sneak" in a domestic reject. Make sure 
packing is adequate and ship on time. If there are 
delays, wire your agent. Poor quality, damaged, 
or delayed merchandise is a sure guarantee of 
market failure (and agent cancellation). 

4. Pay him promptly, if he is a commission agent. 

5. Encourage your agent to visit your U.S. facility. 
Many regularly visit the United States to meet 
with suppliers. 

6. Consider a cooperative promotion campaign. 
(You match the agent's funds for sales brochures, 
counter displays, or advertising.) Many exporters 
feel this is an effective use of advertising funds. 
(It's discussed in more detail in the next chapter.) 

7. Put your agent on your mailing list. And don't 
forget the telephone. 

WHAT IF YOUR AGENT FLOPS? Let's face it, 
some agents won't make the grade. Review his 
performance constantly. Sometimes poor 
performance is not his fault: his letters to you go 
unanswered, or he becomes dismayed because you 
haven't given him adequate support. But he's 
probably responsible for his poor showing: he 
handles too many lines; he doesn't want to learn how 
to sell your products; your commission rate is too low 
for an adequate incentive; or poor performance stems 
from incompetency. 

Take care if you want to cancel out an agent. There 
won't be any problems as long as your 
"arrangement" is informal. But if you have a formal 
contract, it could get sticky. Some countries require 
foreign manufacturers to compensate agents who are 
dropped. Before you act, check with the Department 
of Commerce or a seasoned exporter or an 
international executive at your bank. 

TO SUM UP. There is an old saying in export: 
"Your line is only as good as your overseas agent." 
Agent selection is one of your most vital export 
decisions. Give it top priority. Your success depends 
upon his effectiveness. Develop a list of potential 
agents, then with "diligence and discipline" narrow 
the choice down to two before final selection. Do not 
forget that an agent needs both motivating and 
measuring. 



(REV. 12-73) 



DOMESTIC AND INTERNATIONAL. BUSINESS 

ADMINISTRATION 

BUREAU OF INTERNATIONAL COMMERCE 



REQUEST FOR AGENT/DISTRIBUTOR SERVICE 



TO: DIBA Regional or District Office at: 

445 Federal Building 
Detroit, Michigan 48226 



November 20, iy/4 



Name and address of requesting firm 

Compuscales, Inc. 
1281 Poplar Road, 
Southmoor, Michigan 48870 



~b~! Name of requesting officer 

George K. Jones 



Telephone No. (include area code) 

313-622-0563 



INSTRUCTIONS- For each territory where a business connection is 
desired, submit four (4) copies of this form to the above office. 



3. Foreign country or city where representation desired 

France 



4. Types of business of requesting firm (Chock) 
IX I Manufacturer | | Export Management Co. 

[~~1 Other (Specify* 



5. Type of business connection desired (Check) 

[5) Sales indent agent who takes orders for direct shipment 
to the buyer and receives a commission as compensation. 

| j Distributor or wholesaler who imports for his own account 
and sells to others. 



6a. Are you presently represented in this territory? [ [Yes 

If "Yes," by whom? 



b.Has your present representative been informed of your desire for a change? 



HlYes 



(ADS cannot be undertaken without assurance that your present representative has been informed) 



(NA) 



No 



7. Have you corresponded with any firms in this market regarding your proposal? 
If "Yes," please indicate names and addresses of firms and their reactions: 



Yes 



Name of firm 

H. Poirot et Cie 



Address 

128 Blvd Haussmann 
Paris 



Reaction 

Interested 



So.Fron, your experience what ;ype of company can best fill.you, needs? An Agent With good Contacts 

in heavy industries-railroads, mines, steel and paper 

b.What other product line, fi.t in well with yours? Belt scales, capital equipment used by the 

above types of industries. 

,..,.. , , Some knowledge and 

ificatiqns saould.this company have? . . 

ana electronic measuring devices. 



9a. Product(s) to be exported. (Give detailed description, aa non-technical ea possible. Use continuation sheet, if necessary.) 

Electronic scales for weighing railroad cars and automotive vehicles. 
Compuscale systems comprise platforms supported by strain gauge load 
cells in the track line or on the highway. These are connected to 
small, rugged limited use computers. The computers assess the weight 
of each vehicle as it passes over the scales. They add the weight of 
the various axles and print the total weight. The information can be 
transmitted long distances over teletype lines and sent directly to 
general purpose computers. The necessity for stopping vehicles or 
uncoupling railroad cars is eliminated. The Compuscale not only saves 
time and labor, but weighs more accurately and records the 
information instantaneously where needed. 



b. Is product literature being sent to the post? 



Yes 



| | N 




(If considered necessary, product literature should be mailed to the Foreign Service Post.) 

, T i . T A rr- ' ~. I TT ^"- r "Z \ I I 



AGENT/DISTRIBUTOR SERVICE 
TELEGRAPHIC REPLY 



This reply is submitted by the U.S. Foreign Service under the 
direction of the Secretary of State. No responsibility can be as- 
sumed by the Government or its officers for any transaction with 
any persons or firms mentioned. The requesting company is urged 
to write to all firms thanking them for their interest even if no 
business arrangement is concluded. Brochures, prices, terms, credit 
references and other pertinent information should be sent to those 



firms with which it is decided to enter into correspondenc 
All inquiries relating to this reply should be addressed to tr 
Regional or District Office of the U.S. Department of Commerc 
which processed the ADS request. The office will be pleased I 
be of assistance in responding and in obtaining World Trade 
Data Reports on firms listed. 



DOMESTIC & INTERNATIONAL BUSINESS ADMINISTRATION 
U. S. DEPARTMENT OF COMMERCE, WASHINGTON, D. C. 20230 




FM AMEMBASSY PARIS 

TO USDOC WASHDC 

BT 

UNCLAS PARIS 28648 

USDOC 

E.O. 11652:N/A 

TAGSrBEXP PR 

SUBJECT: ADS REQUEST: COMPUSCALES, SOUTHMOOR, MICH. 

FOLLOWING FIRMS INTERESTED CORRESPONDING: 

1. SOCIETE COFRAN, 22 RUE RASPAIL, 94200 IVRY-SUR-SEINE- 
ATTN: M. NOORDIN. 

2. CAPDEVEILLE S.A. , 206 RUE SAINT -MAUR, 75010 PARIS - ATTN: M. 
CAPDEVEILLE - PRESIDENT AND GENERAL MANAGER. 

3. A.D.V. f 4, RUE BLONDEL, 92400 COURBEVOIE- ATTN: M. MAIGNAN, 

COMMENT: SEE OUR TELEGRAM 28643 SUBJECT FOREIGN GOVERNMENT TENDERS 

SIC 35760 RAILROAD SCALES. URGE COMPUSCALES SEND REPRESENTATIVE 

AUTHORIZED APPOINT AGENT AND SUBMIT TENDER. 

BT 

#028648 




World 
Traders 

Data 
Report 




This report, submitted to the U.S. 
Department of Commerce by the U.S. 
Foreign Service Department of State, is 
transmitted in confidence. No 
responsibility can be assumed by the 
Government or its officers for any 
transactions had with any persons or 
firms herein mentioned. The report is not 
for publication. All correspondence 
relating to information in this report 
should be addressed to the Export 
Information Division, Bureau of 
International Commerce, DIBA, U.S. 
Department of Commerce, Washington, 
D.C. 20230 

SECONDARY DISTRIBUTION PROHIBITED. 



R 100820Z APRIL 75 

FM AMCONSUL MUNICH 

TO USDOC WASHDC 

UNCLASS MUNICH 0128 

SUBJECT: WTDR/FTI KINGFISHER SUESSWAREN GMBH 

REFERENCE: USDOC 18345 

1. GERMANY 2. CNTRY CODE: 428 3. SERNO: 0709400 

4. KINGFISHER SUESSWAREN GMBH. 

4A. CODE: K 4B . CODE: G 4C. CODE: X 

5. POSTFACH 1272; GERNESTR. 252 

6. 8000 MUENCHEN 15, GERMANY 




7. ESTABL: 1952 
10. REPUTATION: 



8. EMPL: 300 9. SIZE: (19-X) LARGE 
(22-X) EXCELLENT 



11. SELLS ITS PRODUCTS IN THE FOLLOWING FOREIGN AREAS LISTED IN 
ORDER OF IMPORTANCE: UNITED KINGDOM, FRANCE, SPAIN, NORTH 
AFRICA, MIDDLE EAST, JAPAN, REP. OF S. AFRICA, UNITED STATES AND 
SOUTH AMERICA. 

12. RPT. DATE: 04/75 

13A. 20650/0345 MFR. DIST. EXP. IMP. OF CONFECTIONERY AND 

13B. 20660/0345 CHOCOLATE AND COCOA PRODUCTS 

13C. 20670/532 ACT. IMP. DIST. OF CHEWING GUM 

13D. 20520/04 MFR. DIST & EXP. OF COOKIES 

13E. 20231/5G IMP. OF DRY MILK PRODUCTS: INTEREST IN 

LICENSE TO MANUF. 

13F. 3589 1/5F IMP. BAKING & RELATED EQUIP; INTEREST IN 



14. CONTACT: KARL JOSEF NEFFE TITLE: MANAGER 

15. CABLE: NEMET 16. TELEX: 2258051 

17. TEL: 012/2437511 AND 2437586 

18. FINANCIAL REFS : DEUTSCHE BANK AG, MUENCHNER LANDSTR. 17, 
AUGSBURG: COMMERZBANK AG, OPERNRING 2, MUNICH. 

19. TRADE REFS: JOHNSON MACHINERY, INC., 862 S. LOS ANGELES 
ST., LOS ANGELES, CA 96102: AND TEDENSON CO., INC., 125 SOUTH 
ST. , BOSTON, MA 02111. 

20. FOREIGN FIRMS REPRESENTED: AGENT OF NORTH-AM CHICLE CO., 
P.O.B. 245, WASHINGTON, D.C. 20001, FOR CHEWING GUM, ACQUIRED 
1954; LICENSEE OF ENGLISH TREACLE, LTD., NORTHGATE , LONDON E.G. 
4, FOR HARD & SOFT CANDIES, ACQ . 1965; LICENSEE OF SCHWEIZERISCHE 
SUESSWAREN, ZURICH, ACQ. 1965. 

21. THIS FIRM IS ONE OF GERMANY'S LEADING MANUFACTURERS OF 
ALL TYPES OF CONFECTIONARY. FIXED ASSETS LATEST REPORTED AT 
DM 1.5 MILLION AND CAPITALIZATION AT DM 3 MILLION. ANNUAL 
SALES DM 6.5 MILLION. MANUFACTURING FACILITIES AND HEAD OFFICES 
LOCATED IN MUNICH. FIRM RECENTLY MODERNIZED COOKIE PRODUCTION 
FACILITY WITH INSTALLATION OF TWO HIGH VOLUME CONVEYOR-OVEN 
UNITS FROM HAALFORS OF SWEDEN. DISTRIBUTION WAREHOUSE IN MANN- 
HEIM FOR SOME EUROPEAN SALES AND IN BREMEN FOR EXPORT SALES. 
FIRM SELLS ITS PRODUCTS FINISHED AND PACKAGED TO FOOD BROKERS 
AND LARGE FOOD CHAINS AS EXCLUSIVE AGENTS IN ALL MARKETS EXCEPT 
U.S. WHERE TENDENSON COMPANY IMPORTS IN BULK AND PACKAGES WITH 
AMERICAN LABELS. THE MAJORITY STOCKHOLDER IS HEIDE DERRIG AG, 

A HOLDING COMPANY LOCATED IN MUNICH. BANKING SOURCES REPORT 
FINANCES ARE SOUND, OBLIGATIONS MET PROMPTLY, MANAGEMENT CON- 
SIDERED HIGHLY REPUTABLE AND EXPERIENCED BY LOCAL BUSINESS SOURCES, 
ESPECIALLY FOREIGN SALES MANAGER HELMUT SCHOLZE, FORMERLY WITH 
NESTLE. CONSULATE RECOMMENDS SUBJECT AS AN EXCELLENT TRADED 
CONTACT FOR U.S. FIRMS. 



YOUR COMPANY, INC. 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 

hat to write when you are looking for an agent to sell your line.) 

ermeo Hnos 
IA S.A. 
orrero 6-37 
uenca, Ecuador 

t tent ion: G era to B ermeo 

Managing Director 

entlemen: 

We believe there is a growing market in your country for our line of asphalt 
dditives which extend the life of roads and parking lots. U.S. exports of similar 
roducts were $850,000 in 1975 30% higher than the prior year. We have already 
3ld our additives to customers in Ecuador. They are (name them). 

Would you be interested in representing our company on a commission basis? 
ur prices are competitive with other U.S. suppliers; our product has several 
dvantages as indicated in the attached product specification sheets. Include 
omplete shipping and packing information. 

We also enclose a copy of our price list for your review. Our agents receive 
10% discount based on F.O.B. factory value. 

Our firm, small but growing, had sales of $1,000,000 last year. Our U.S. 
ustomers include (name them). Over the past 6 months, we have shipped to several 
ountries (name them). 

If you are interested in representing our firm, we would appreciate a reply 
ith the following information: 

1. A brief description of your firm, industries served, number of salesmen, 
etc. 

2. Your major product lines, and the name, address, and export manager of 
U.S. firms. 

3. Your candid assessment of the potential for our asphalt additives in 
Ecuador and what we will need to introduce our product successfully. 



CHAPTER X 



FINANCING YOUR EXPORT ORDERS 



INTRODUCTION. Up to this point, we have 
covered export business where payment is practically 
guaranteed, such as cash in advance, payment from a 
U.S. bank account, and letter of credit. 

But you can boost your export sales by liberalizing 
your payment terms. You may have to do so if you 
want any business. Some customers won't buy on 
letter of credit terms as it ties up their working 
capital. Remember, it may be 30 days or longer after 
they pay by L/C before your goods reach their hands. 
In most cases, if you do liberalize your terms, you will 
either encounter delays in receiving payment or incur 
financing charges and other costs in accommodating 
your foreign customer's wishes. 

This chapter discusses other kinds of payment 
terms, the role of a bank with international 
capabilities and how to select one. 



SOURCES OF FINANCING. If your customer 
doesn't want to buy with a L/C, consider financing 
the shipment. And consider financing if you believe it 
will increase sales and profits. Here are sources for 
this financing: 

1. As the exporter, you extend credit. This could be 
for a very short time perhaps only as long as it 
takes your goods to reach foreign markets. In 
this case, no formal financing agreement is called 
for. Nonpayment risks can be minimized by 
using "drafts" (discussed below). You could 
finance customers for longer time periods from 
30 days to 3 years. Then the credit arrangement is 
formalized, and you charge interest. Note well: 

. financing your customer increases risks and adds 
costs. Talk to a banker before you decide to 
finance customers. 

2. A bank extends credit. It could be your 
customer's bank or your own. Many U.S. banks 
make loans to foreign firms to buy U.S. goods. If 
you extend financing, a U.S. bank may 



receivables (your invoices to your foreign 
buyer). You will get immediate payment and 
won't have to worry about collection. This is the 
factor's responsibility. 1 Factors, of course, will 
not pay you the full value of the invoice. They 
will buy it at a discount ranging from 1 !/a% to 
2 ! /2% depending upon the product, the 1 customer, 
and the country. 

4. Export-Import Bank of the United States. The 
U.S. Government through the Export-Import 
Bank supports exports through dollar loans to 
foreign firms who agree to buy American goods. 2 
Unfortunately for the small exporter, hardly any 
loans are made to customers for orders under 
$50,000. And note well: the Ex-Im Bank does not 
loan money to U.S. exporters. 

A good bank can help you if your export trans- 
actions are eligible for Ex-Im financing. Also, 
contact Export-Import Bank of the United 
States, 811 Vermont Avenue, N.W., Washington, 
D.C. 20571. Telephone: (202) 282-8111. 



PAYMENT TERMS IN INTERNATIONAL 
BUSINESS. Here are the four most common ones. 
A bank experienced in handling export transactions 
can tell you which ones would be most suitable. 

1. Cash with order. Your customer pays in advance! 
If he pays by check, wait until the check clears. 
(Many manufacturers who make expensive 
custom-made products require customers to send 
a downpayment with their order). 

If the payment is not in dollars, don't ship until 
the bank notifies you that the foreign currency 
has been converted to U.S. dollars. 

2. Letters of credit. A method of payment using 
banks that minimizes risk of non-payment to the 
seller, and non-performance by the buyer. 
Typically, the exporter receives payment from his 



JTL O I * 

However, some L/C's are written for a payment 
delay of up to 180 days. If the L/C is confirmed 
and irrevocable, you still have the U.S. bank's 
payment guarantee. 3 

Drafts. A popular payment method in export, a 
"draft" is a document asking for the customer's 
promise to pay by a specified date. The seller 
initiates the draft and the buyer signs it. This 
form of payment generally uses a bank to help 
the seller collect and to help the buyer get 
delivery. There are several forms of drafts, 
depending on payment dates. 

a. Sight draft. The customer pays when he 
"sees" the draft i.e., when he takes 
physical possession of the cargo. Thus, a 
sight draft is much like the C.O.D. used 

in the Unites States. 

b. Date draft. The customer pays on a 
specified date in the draft. In this case, 
the customer usually has the goods and 
has promised to pay later. Banks can 
follow-up to collect payment. 

c. Time draft. The buyer pays after a 
specified "time," usually 30, 60, or 90 
days after the buyer signs the draft. 

You (the exporter) initiate the draft. Then you 
give it to your bank who sends it to its 
correspondent (or branch) bank in the 
customer's country with collection instructions. 
(Frequently a Bill of Lading or your commercial 
invoice will be sent with the draft. This is known 
as a "draft against documents"). The foreign 
bank notifies the customer so that he can 
"accept" that is, give his promise to pay. Then 
the foreign bank gives the buyer the documents 
to take possession of the cargo. Non-payment 
risks are the least for "sight" drafts, particularly 
if important documents are withheld by the bank 
until payment is made." 

Open account. This payment term is similar to the 
one most used on the Unites States. Payment is 
made at 'predetermined periods and after goods 
have been shipped. 



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discount. Those who do not pay in 30 days are 
charged 1% per month on the payment balance. 

If you sell on open account terms, banks are 
usually not involved. But exporters should watch 
out for two factors. 

a. The customer's financial standing. Will 
he pay? 

b. The customer "line of credit." You may 
know your customer can pay for one 
order, but if he orders frequently, can he 
pay for all the shipments? Thus, many 
exporters establish credit limits for each 
customer. If the next shipment exceeds 
the ceiling limit, then the exporter often 
demands another form of payment such 
as letter of credit. 

Open account is not recommended for unknown ot 
new customers. But it is the standard arrangement 
with long-time customers once you are certain they 
pay on time. It also could be acceptable for customers 
in Canada and Puerto Rico where it is easy to check 
on ability to pau (Open account sales are increasing 
in Europe). 



WHICH PAYMENT TERMS DO EXPORTERS 
FAVOR? A Survey of some 600 U.S. exporters 
showed the following payment terms: 

Payment Terms Percent Using 

Payment in Advance 7.5% 

Letter of Credit 28.3% 

Drafts 35.2% 

Open Account 30.0% 



WHAT IS BEST FOR YOU? You have two options 
if a customer asks you to sell on terms other than 
letter of credit. First, you can stay with your current 
terms. Or you can stick your neck out just a little bit 
and investigate financing even if for only as long as 
it takes the shipment to reach the customer. If you do 
finance, remember risk of nonpayment is greater, you 
will incur additional expenses (bank charges), and the 
additional time to recover payment can hurt "cash 
flow." 



bank may not know exports. Of some 14,000 com- 
mercial banks in the United States, only 300 have an 
international department. And only one-half of these 
really care about the needs of small- or medium-sized 
exporters. So you may have to "hire" an 
international banker! These sources can help. 

1. Contact the Department of Commerce District 
Office. It will suggest banks in your area who 
regularly work with exporters. 

2. Talk to your current bank. If it doesn't handle 
export financing, it will be doing business with a 
larger bank that does. 5 

3. Talk with your freight forwarder or an 
experienced exporter. Both do business with 
banks on a daily basis. 

SELECTING YOUR BANK. Some banks are 
better able to handle the needs of new exporters. 
Therefore, select one with care. Here's what to look 
for. 

1. The size of the bank's international department. 

2. The number and location of its foreign branches 
or foreign correspondent banks. 

3. The bank's international executives: do they 
travel often? 

4. Charges for confirming a letter of credit. 

5. Charges for processing drafts and collecting 
payment. 

6. Does the bank provide buyer credit reports? Are 
they free or not? 

7. How much customer financing does it do? 

8. Its experience with U.S. Government financing 
programs supporting modest export 
transactions. 

9. Does the bank have an FCIA 6 credit insurance 
policy? 

10. Other services such as trade leads, letters of intro- 
duction to banks and customers abroad, etc. 

11. Is it a friendly and courteous place? 



INSURANCE. If you do extend credit to foreign 
buyers, you often can minimize risks through export 
credit insurance. Thus, if your customer doesn't pay, 
your insurance will pay his bill. The Foreign Credit 
Insurance Association (FCIA), a U.S. Government- 
supported association of U.S. insurance companies, 
offers many types of export credit insurance. 
Unfortunately, new exporters or small companies 
cannot use them. But FCIA offers one policy that 
you can use: it's the Banker's Policy. A master policy 
goes to banks which use it to cover their customers. 
Banks charge a nominal amount, roughly 1% of the 
amount insured. About 175 banks have such a policy. 
They're listed on page 130. Check to see if your bank 
has a Banker's Policy in which it purchases your ex- 
port receivables. It will collect payment, and it bears 
the risk of nonpayment. 

THE EXPORT CREDIT CHECK. If you decide to 
finance your customers, make sure they can pay their 
bills. Here are four major sources for credit 
information. 

1. Your bank. If your bank does business abroad, 
you should be able to get a credit report. Some 
banks do not charge for this service. See page!34 
for a sample bank credit report. 

2. A commercial credit agency. Dun and Bradstreet 
offer credit reports on about all foreign firms. 
Charges range from $15 to $100. They will take 
from 1 week to a month to obtain. See page ??? 
for a sample report. For information about 
foreign D & B reports, contact Dun & Bradstreet 
International, 99 Church Street, New York, N.W. 
10001. 

3. A World Trader's Data Report (WTDR).'' While 
primarily sold by the U.S. Department of Com- 
merce as a check on an agent, a WTDR is excel- 
lent for credit information. It has some financial 
information, but it identifies other U.S. 
companies that do business with the WTDR 
firm. Contact the U.S. firms for their payment 
experience. Most will tell you and will expect the 
same from you. A WTDR costs $15 and it takes 
30 days to reach you. 

4. Credit rating directories. A few U.S. firms publish 
directories which give the credit rating of some 
firms in specific foreign countries. Check with 



your library for availability. But be warned that 
credit ratings can change overnight, so a listing in 
a current directory may not reflect current 
conditions. 

TO SUM UP. Additional export business is 
available if you extend credit. But it will increase risk 
of nonpayment and increase your costs. You can 
minimize risks through credit checks and covering 
your export transaction under a bank's credit 
insurance policy. Export financing, of course, will 
impact your cash flow. Banks (or factors) often 



assume credit obligation but this adds more costs. 8 
If you are thinking of extending credit, you will 
need a bank with international capability and one 
experienced in working with new exporters. 



8 For example, most exporters figure financing charges at 
1 % a m onth. Thus, a $ 1 ,000 shipment sold to a customer on 
a 60-day open account "costs" 2% or $20. If you have ex- 
port cerdit insurance, add an additional 1% $10 and if you 
have purchased a credit report, you will pay $15 more. In- 
clude costs in your prices, or else your profit could be wiped 
out.! 



175 BANKS THAT CAN INSURE AGAINST CUSTOMER NONPAYMENT 



These banks have purchased an FCIA Bankers Insurance Policy which can be used to cover new exporters 
with credit insurance. 



ALABAMA 

First National Bank of Birmingham 

ARIZONA 

Arizona Bank (Phoenix) 

Valley National Bank of Arizona (Phoenix) 

ARKANSAS 

Union National Bank (Little Rock) 

CALIFORNIA 

Bank of America NT & SA (San Francisco) 
Bank of Boston International (Los Angeles) 
Bank of California (Los Angeles) 
Chase Manhattan International Banking Corp. (Los 

Angeles) 

City National Bank (Los Angeles) 
Crocker-Citizens National Bank (San Francisco) 
El Camino Bank (Anaheim) 
First Chicago International (Los Angeles) 
First National City Bank (San Francisco) 
First Western Bank and Trust Co. (Los Angeles) 
International Bank of Commerce (Los Angeles) 
Security Pacific National Bank (Los Angeles) 
Southern California First National (San Diego) 
Union Bank (Los Angeles) 
Wells Fargo Bank N.A. (San Francisco) 

COLORADO 

First National Bank of Denver 
United Bank of Denver 

CONNECTICUT 

Connecticut Bank & Trust (Hartford) 
First New Haven National Bank 
Merchants Bank & Trust Co. (Norwalk) 
State National Bank of Connecticut (Bridgeport) 

DISTRICT OF COLUMBIA 

First National Bank of Washington 

FLORIDA 

Bank of Boston International of Miami 
Bank of Miami 
Bankers Trust (Miami) 
Barnett Bank of Jacksonville 
Chase Manhattan (Miami) 
Coral Gables First National Bank 



Jacksonville National Bank 

Miami National Bank 

Pan American Bank of Miami 

Republic National Bank of Miami (Fort Lauderdale) 

GEORGIA 

Citizens & Southern National Bank (Atlanta) 
Fulton National Bank (Atlanta) 

ILLINOIS 

American Nat'l Bank & Trust Co. of Chicago 

Beverly Bank (Chicago) 

Central National Bank of Chicago 

Crocker Mid-America International Bank (Chicago) 

First National Bank of Chicago 

The Northern Trust Co. (Chicago) 

INDIANA 

American Fletcher National Bank & Trust Co. 

(Indianapolis) 

First Bank & Trust Co. (Indianapolis) 
Indiana National Bank (Indianapolis) 
Merchants National Bank & Trust Co. of 

Indianapolis 

St. Joseph Bank & Trust Co. (South Bend) 
St. Joseph Valley Bank (Elkhart) 

IOWA 

Merchants National Bank (Cedar Rapids) 

KENTUCKY 

Citizens Fidelity Bank & Trust Co. (Louisville) 
First National Bank of Louisville 

LOUISIANA 

The Bank of New Orleans & Trust Co. 
Citizens & Southern Int'l Bank of New Orleans 
First National Bank of Commerce (New Orleans) 
Hibernia National Bank (New Orleans) 

MARYLAND 

Maryland National Bank (Baltimore) 

First National Bank of Maryland (Baltimore) 

MASSACHUSETTS 

First National Bank of Boston 

Multibank Financial Corp. (Boston) 

New England Merchants National Bank (Boston) 



Cfr 



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MINNESOTA 

First National Bank of Minneapolis 
Northwestern National Bank of Minneapolis 

MISSISSIPPI 

Fidelity Bank (Jackson) 

MISSOURI 

Colorado Bank of Kansas City 

Columbia Union National Bank & Trust Co. 

(Kansas City) 

Commerce Bank of Kansas City 
First National Bank in St. Louis 
Mark Twain State Bank (St. Louis) 
Mercantile Trust Co. (St. Louis) 

NEBRASKA 

Union Bank & Trust Co. (Lincoln) 

NEW JERSEY 

American National Bank & Trust of N.J. 
(Morristown) 

Fidelity Union Trust Co. Bank (Newark) 
First National State Bank of New Jersey (Newark) 
First Jersey National Bank (Jersey City) 
New Jersey Bank (Paterson) 
Peoples Trust of New Jersey (Hackensack) 

NEW YORK 
Allied Bank (New York) 
Bank of America (New York) 
Bank of Boston International (New York) 
Bank of California (New York) 
Bank of Commerce (New York) 
Bank Leumi Trust Co. of New York 
Chemical Bank (New York) 
Continental Bank International (New York) 
The Country Trust Company (White Plains) 
First Empire Bank (New York) 
First National City Bank (New York) 
Girard International Bank (New York) 
Irving Trust (New York) 
Lincoln First International (New York) 
Marine Midland Bank (Buffalo) 
Marine Midland Bank (New York) 
Marine Midland Bank (Rochester) 
Mellon Bank International (New York) 
The Merchants Bank of New York 
North Carolina National Bank (New York) 
Northwestern Trust International Banking Corp. 

(New York) 

Philadelphia International Bank (New York) 
Security National Bank (New York) 
Security Pacific International Bank (New York) 
State Street Bank (New York"\ 



Central National Bank of Cleveland 
Central Trust Company (Cincinnati) 
The Cleveland Trust Company 
Huntington National Bank (Columbus) 
National City Bank of Cleveland 
The Ohio Citizens Trust Co. (Toledo) 
The Southern Ohio Bank (Cincinnati) 
Society National Bank of Cleveland 
Union Commerce Bank (Cleveland) 
Winters National Bank & Trust Co. (Dayton) 

OREGON 

The Bank of California (Portland) 

First National Bank of Oregon (Portland) 

United States Bank of Oregon (Portland) 

PENNSYLVANIA 
Central National Bank (Lancaster) 
Central Penn National Bank (Philadelphia) 
Fidelity Bank (Philadelphia) 
First Pennsylvania (Philadelphia) 
Philadelphia National Bank 
Pittsburgh National Bank 

PUERTO RICO 

Banco Popular de Puerto Rico (San Juan) 

RHODE ISLAND 

Rhode Island Hospital Trust National Bank 
(Providence) 

TENNESSEE 

Commerce Union Bank (Nashville) 
First American National Bank of Nashville 
First National Bank of Memphis 
Hamilton National Bank (Chattanooga) 
National Bank of Commerce (Memphis) 
Third National Bank in Nashville 
Union Planter National Bank (Memphis) 

TEXAS 

Bank of the Southwest N.A. (Houston) 
Bank of Texas (Houston) 
Capital National Bank (Houston) 
Continental Bank International (Houston) 
Exchange Bank & Trust (Dallas) 
First City National Bank (Houston) 
First National Bank of Dallas 
First National Bank of Fort Worth 
Houston Citizens Bank & Trust 
Houston National Bank 
The Laredo National Bank 
Texas Commerce National Bank (Houston) 

VIRGINIA 



Pacific National Bank of Washington (Seattle) 
Pacific National Bank of Washington (Tacoma) 
Seattle First National Bank 



WISCONSIN 

First Wisconsin National Bank of Milwaukee 
Marshall & Ilsley Bank (Milwaukee) 



These banks are experienced in financing smaller export transactions under loan and loan guarantees froi 
the Export-Import Bank of the United States. 



First Wisconsin National Bank 

Chemical Bank 

Coral Gables First National Bank 

Citizens & Southern Int'l (New Orleans) 

Rhode Island Hospital Trust 

Marine National Exchange Bank 

Arizona Bank 

First National (Boston) 

Merchants National Bank 

Citizens & Southern Int'l (Miami) 

Bank of Boston Int'l (New York) 

American National Bank & Trust (Chicago) 

Industrial National (Providence) 



First National Bank of Commerce 

Southeast First Nt'l Bank (Miami) 

Southern California First Nt'l Bank 

Hartford National Bank 

Bank of America (San Francisco) 

Continental Illinois 

Cleveland Trust 

First State Bank & Trust (St. Louis) 

Laredo National Bank 

Beverly Bank 

Central National (Cleveland) 

Chase Manhattan Bank 

Union Trust Co. (Stamford) 




FBRST MATBG^AL COTV 



Branch/Sucuraal Choluteca Honduras 



Dnte/Fccha December 15, 1975 



Re: 



M. G- F. de Maquinaria Agricola S. A 
Avenida de Oro 
Choluteca, Honduras 



Character of Organization/Clase de Organizacion: Corporation 

Founded/ Fundndo: 1962 

Line of Business/ Negocio: Agricultural Machinery Implements 

Jorge B. Oliva, President; Enrique 
Rivera, Vice-President; Leon Perez, 
Principals- Partners /PcreoneroB-Socios: Manager; Julio Hernandez, Comptroller 

Authorized Capital / Capital Autorizado: Lempiras 1-in/Pagado: 

4MM 
"t Financial Statement as of / Balance al cierre de: 12-3^^4 (OOO's of Lempiras) 



" Current Assets / Activos Corrientes: 340 



Fixed Assets /Activos Fijos: 



Including / Incluyendo: 



" Sales /Ventas: . 843. 326 





aBiltties I Pasivos Corrientes: 

^ 282-311 

\ Deferred Liabilities / Pasivoa Diferidos: 
New Worth /Patrimonio: 324-212 



Net Profits (Gnnancias) Losses (PJrdidas) 72.440 



Bank & Trade Information / Information Bancaria y Comercial: 
According to four local banks queried, this firm maintains well 
managed current accounts showing average balances fluctuating 
from low five figures to high seven figures* Credit facilities have 
been extended up to high five figures, registering excellent experi- 
ence. Subject enjoys an excellent financial standing and its officers 
are well respected in the business community. 



S 
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Dun & Bradstreet 



PLEASE NOTE WHETHER NAME. BUSINESS AND STREET ADDRESS CORRESPOND WITH YOUR INQUIRY. 

INTERNATIONAL REPORT 



VALLE ELECTRICA S A 

Antonio Val le - Pres 
Rafael Val le - Vice Pres 
Jose Valle - Secy & Treas 



DUN & BRADSTREET, INC. 

CD 15 JUNE 28, 197- 

WHOL RET ELEC SUPPS 

(45) 



STARTED: 
PAYMENTS : 
SALES: 
WORTH: 
EMPLOYS: 



MG C 1 
SANTIAGO, CHILE 
Calle Norte #38 
P Box 9732 

1935 

PPT 

E. 2,530,630 

E. 651,920 

2 



SUMMARY 

CASH AND RECEIVABLES COVER CURRENT DEBT. 



OPERATIONS PROFITABLE. 



H I STORY 

Incorporated February 17, 1940. Authorized capital E. 15,000, fully paid In. 

sole proprietorship of Antonio Valle, established 1935. 



Succeeds 



A Valle, born !n Chile 1910. Active here all along. Well regarded. Rafael and Jose 
are sons of the President, 28 and 36 respectively, native born, both married. They 
have been active In this business their entire careers. 



FINANCES 

Statement of A^rt I 30, 197- (Figures In Escudos quoted at .0895 In U S Currency). 

LIABILITIES 

67,000 Accts Payable 187,730 

311,180 Bank Loan 120,000 



ASSETS 

Cash on hand 
Accts Rec 



and In banks 



Mdse 



CURR ASSETS 
Fix & Equip 
R E & Bldgs 
Prepaid expenses 



431,040 

809,320 

117,360 

294,030 

1,500 



Due on mortgage 
Taxes 

CURR LIABS 
Mtge on R E (Def.) 
Special Res 
Capital Stock 
Surplus 

TOTALS 



32,120 

3,710 

343,560 

216,000 

10,740 
150,000 
501.910 
,222,210 
134,500. 



Fire 



TOTALS 1,222,210 

Net sales E. 253,063 from March 196- to April 30, 197-. Net profit E. 
Insurance on real estate E. 300,000, fixtures and equipment E. 100,000. 

Signed by: Antonio Valle, Pres. 

Statement shows a liquid condition with current debt covered by cash and receivables 
alone. Volume reported steady with operations continuing profitable. 
BANKING: Local depository reported account maintained for many years with balances 
averaging medium to high four figures. An unsecured loan granted up to low five 
figures, which Is currently outstanding. Relationship satisfactory. 

OPERATION 

Wholesalers (75/6) and retailers (25^) electrical supplies, such as wiring supplies, 

construction materials plus a small line of television and radio sets. Carries 

complete lines from the U S and European manufacturers. Wholesale sales on 60 day 

terms. All retail sales for cash. Employs 2. 

LOCATION: Occupies a two-story building, maintained In good repair. In a commercial area, 



SECTION C 



DEVELOPING AN EXPORT MOMENTUM 



INTRODUCTION. Until now, your export effort 
has required modest resources from the new-to- 
export firm. Time has been minimal. There has been 
no foreign travel. Domestic executives can easily 
absorb the export paperwork and the necessary 
correspondence needed. 

And a modest export business should result. If you 
have followed our suggestions there's no drain on 
cash flow. You can go on this way as long as you 
wish. 



But the next stage means a plunge! It requires 
greater commitment of your time and money. It may 
require foreign travel. You will need a larger export 
budget and a more extensive plan. But, rewards also 
will be greater. 

SECTION THREE is not for the firm with cash flow 
or product problems, or for those who do not have a 
senior executive who can spend time to build your 
export business. 



CHAPTER XI 

PUTTING YOUR BEST FOOT FORWARD: IN LOW-COST 

PROMOTIONS 



INTRODUCTION. This chapter discusses how to 
mount a low-cost promotion effort to foreign firms. 
The U.S. Government will help you blow your own 
horn abroad with free commercial newsletters, low- 
cost catalog shows and special shows that are a 
"showcase" of U.S. products. 

THE COMMERCIAL NEWSLETTER. Each 
month, the Department of Commerce publishes a 
magazine featuring U.S. products and services that 
are new to export. It is sent to all U.S. Foreign Serv- 
ice posts. Many will distribute the Commercial 
Newsletter, as it's called, to important local buyers 
and reference libraries. The Commerce Department 
actively looks for new products to include in future 
issues. If you are interested, an application form can 
be obtained at the Commerce Department District 
Office nearest you. 

CATALOG SHOWS. The Commerce Department 
also has special shows of catalogs, usually around an 
industry or product theme (usually dovetailed into 
one of the 15 target industries). 1 Fifty catalog shows 
are held every year mostly in developing markets. 
Commerce selects a representative to accompany the 
catalogs so questions can be answered and leads col- 
lected. These shows have pulled good results for some 
exhibitors. 

The cost of a catalog show is nominal: $50 per 
exhibit. 2 A list of future catalog shows is available 
from the Commerce Department District Office or 
from the Bureau of International Commerce, U.S. 
Department of Commerce, Washington, D.C. 20230. 

You will find a catalog show most effective if you 
already have an agent working for you in the market 
where the show takes place. He can come to the show 
and answer customer questions on the spot. 

Note: A catalog exhibition can also generate 
potential agents. They will see your catalogs, discuss 
your products with the U.S. industry expert. Names 
of those interested are then sent to you. But 



PRODUCT SHOWS. The Department of Com- 
merce and the Department of Agriculture sponsor 
frequent shows abroad. There are two types: Trade 
Center shows and private commercial exhibitions. 

1. U.S. Trade Center shows. Commerce operates its 
own trade centers in 15 key foreign commercial 
cities. It stages shows of U.S. goods to which 
prospective buyers are invited. (See below for 
Trade Center locations.) A typical Trade Center 
has six to eight shows a year, usually fitting into a 
"target" industry theme. For example, the U.S. 
Trade Center in Tokyo recently had shows on 
these themes: computers, printing equipment, 
food handling systems, marine/oceanographic 
equipment, and leisure apparel. 



U.S. TRADE CENTERS ABROAD (where 
frequent product shows are held) 



City Country 

Sydney Australia 

Vienna Austria 

Paris France 

Frankfurt Germany 

Tehran Iran 

Milan Italy 

Tokyo Japan 

Seoul Korea 

Mexico City Mexico 

Warsaw Poland 

Singapore Singapore 



al, booth design, and extensive preshow market 
development and publicity. A schedule of Trade 
Center exhibitions is available from the District Of- 
fice jfthe Department of Commerce nearest you or 
by writing the Bureau of International Commerce, 
U.S. Department of Commerce, Washington, D.C- 
20230. 

Note: Participation in Trade Center events can be 
effective in generating interest from potential buyers. 
If you have in agent, you won't have to attend. A 
Trade Center show can also help to attract potential 
agents. But then you will have to attend and devote 
considerable time before, during, and after the show, 
that is, if you want to select the best agent. Prior to 
the show, Commerce helps to locate a prospective 
agent by "shaking the bushes" and it will develop a 
list of qualified and interested firms for you. 

2. Commercial Exhibitions. Both Commerce and 
Agriculture sponsor American participation in 
U.S. pavilions at major international shows. 
They also sponsor solo exhibitions of U.S. prod- 
ucts. An extensive promotion campaign is 
aimed at potential buyers before each event. Ab- 
out 30 shows are held every year in such well- 
known events as the Paris Air Show, the 
Hannover Fair (Germany). All exhibitions are 
well attended with buyers from all over the 
world. A schedule is available from the Com- 
merce Department's District Offices or by 
writing either the Foreign Agricultural Service, 
U.S. Department of Agriculture, Washington, 
D.C. 20230. 20250 or Bureau of International 
Commerce, U.S. Department of Commerce, 
Washington, D.C. 20230. 

The cost of participation in commercial shows 
is higher than Trade Center shows: $2000 to 
$3500, but it includes exhibition space, booth 
design, and preshow market development. (It's 
about half the price if you did it yourself.) 

Like Trade Center shows, a commercial 
exhibition can be an effective way to "showcase" 
your goods for foreign buyers. If you have a local 
agent, you won't have to go.- 1 A commercial 
show can also develop potential agents. The U.S. 
Government can help by contacting interested 
firms prior to the show and it will give you details 
on their capabilities. 

BUT NOT FOR EVERYONE! Participation in prod- 
uct and catalog shows is not for everyone. There 
may be disadvantages: 

1. Some shows may be scheduled where you don't 



3. Cost could stop you. The show fee is only part of 
the cost. For example, if you go into a Trade 
Center product show, the basic show fee is $900. 
But you will have to pay for building your booth, 
catalogs and brochures, and your transportation 
and living expenses. 

DECIDING TO SHOW YOUR WARES. Participa- 
tion has advantages. But don't do so unless your 
agent to man uour booth. (If you are trying to select 
an agent, then you might want to enter.) If your par- 
ticipation is to be successful, you will have costs and 
time commitments. 

1. BEFORE THE SHOW. Here are some "musts" 
to be done prior to the show. 

a. Establish your objectives. What do you want 
from participation? Alert Commerce 
Department officials in Washington on these 
objectives. If one is agent selection, com- 
municate your selection criteria to 
Washington so Commerce can develop a list 
of prospects. 

b. Fill out the forms correctly. Make sure you 
know what's required and when. 

c. Plan your exhibit. You can get lots of good 
advice from Washington officials in charge of 
the overall exhibition design. They can tell you 
how to make it effective. Department of Com- 
merce District Office specialists can steer you 
to the right individual. 

d. Make sure you have enough sales promotion 
material. 

e. Make sure you can give a quick "price," 
preferably C.I.F. to interested buyers (prepare 
special export price sheets). Your freight 
forwarder can help you with this, as he can 
give you shipping and insurance costs. 

2. DURING THE SHOW. Here is a list of things 
to do at the show. 

a. Go to all exhibitor briefings. 

b. Remind show officials again of your 
objectives (they should know; a reminder will 
help). 

c. Ask for help in making local business ap- 
pointments. 

d. Get the list of daily registered visitors, the key 
buyer list, those invited to the show, and other 



OLLOWUP. The biggest exhibitor mistake is 
ilure to followup prospects. It makes future 
tivities more difficult. Local firms hesitate to 
ial with exporters who fail to follow up. 

Stay there in the country after the show closes. 
You can followup face-to-face. 

Review show results with your agent (or your 
prospective agent) for his follow-up. 

Followup promptly. Some followup work can 
be done at the fair. You will be able to dictate 
letters, send instructions to your home office 
and mail transcribed material and ask that it 
be typed before your return. 

ER GOVERNMENT PROMOTIONS. The 

Government also uses trade missions and 
cal sales and siminars to promote U.S. Prod- 



1 . Personal visits. The most effective promotion of 
all is personal contact between the exporter and 
his agents. (It's discussed in a later chapter.) 

2. Sales promotion material such as literature, price 
sheets, films, film strips, premiums, etc. 

3. Advertising. You will be surprised at how much 
of your U.S. domestic advertising reaches foreign 
buyers. U.S. business magazines have a large 
circulation abroad. Of course, you can advertise 
in trade magazines aimed strictly at international 
markets, and you can also advertise in local 
media abroad. At this early stage of your exports, 
it's probably not needed. But one form of 
advertising is highly effective: cooperative 
advertising. At this stage it will be feasible 
because you can limit it to one or two markets. 



rade Missions. Commerce organizes and leads 
ade missions groups of American executives 
ho take 2 week trips abroad to promote prod- 
its on specific industries. Department of Com- 
lerce officials select product themes (based on 
search) and cities to visit. Mission members are 
;cruited from U.S. firms. 4 If you go, it will help 
DU develop sales leads. Abroad trade mission 
tembers meet with high level government 
fficials who can be useful if the government 
scornes your customer. 

The fee for trade mission participation is $300 
>r new exporters, but mission members pay their 
wn transportation and living costs. A mission 
:hedule is available from the Department of 
ommerce's District Office. Or write: Bureau of 
iternational Commerce, Department of Com- 
erce, Washington, D.C. 20230. 

'echnical Sales Seminars. Commerce also 
rganizes groups of technically-oriented U.S. 
lanufacturers to give sales seminars abroad, 
eminar schedules are at the Commerce 
epartment District Offices. 

ER FORMS OF PROMOTION. In addition 
Government's promotional efforts, you can do 
d deal by yourself. 



Commerce also sponsors trade missions organized by 
ustrial trade association or State governments. 



COOPERATIVE ADVERTISINGS When an ex- 
porter and his agent share the cost, it's a cooperative 
effort. Exporters usually agree to pay one-half the 
cost up to a specified limit if the agent submits pro- 
of local advertising. Many exporters find this an 
effective utilization of promotion dollars. But the 
exporter and his agent should agree in advance, 
precisely how much each will share and how it is to be 
spent. Most exporters do not limit cooperative 
advertising to magazines and newspapers. It can be 
used on promotions: catalogs, brochures, price 
sheets, service manuals using local terminology and 
language. One exporter includes receptions at local 
trade meetings in his co-op advertising program. 

If you are interested in cooperative advertising, 
discuss it with your agent. Many have past experience 
with other U.S. firms and they will know what is 
likely to work well. 



TO SUM UP. Once you learn to sell in a foreign 
market, hook up this effort with promotion. Your 
agent can advise on what works best in his market 
and he will often share the costs. 

The U.S. Government sponsors U.S. product 
shows in most major markets on many product 
themes. Participation will generate sales prospects 
and help to locate agents. But promotion costs 
money. Budgets should be firmly established and 
adhered to. Remember, promotion isn't for the firm 
that is the "occasional exporter." 



CHAPTER XII 



UP, UP AND AWAY! 



INTRODUCTION. There's no doubt about it, 
travel will result in your biggest payoff. Major 
reasons for travel: motivating and managing your 
agents, and checking out new market prospects. 

This chapter covers planning your trip to both old 
and new markets, what to do when you're there and 
how to follow up when you return to the States. 

TRAVELING WHERE YOU HAVE AN EXPORT 
AGENT. Nothing replaces personal contact. Here is 
what you can accomplish on a market trip. 

1. Cement your relationship with export agents. 
Nothing replaces face-to-face contact. 

2. Give his key personnel on-the-spot training so 
they'll be more effective salesmen. 

3. Iron out problems. There may be damaged 
merchandise, disputed invoices, inadequate or 
outdated sales promotion material, customer 
complaints, etc. Problems which would take 
months to solve by mail can often be handled in 
minutes face-to-face. 

4. Make sales calls with your agents on customers 
and good prospects. You will bring back orders! 
(guaranteed!) 

5. Make an on-site evaluation of your agent's per- 
formance. Learn his strengths, uncover his 
weaknesses and help him with the latter. 

6. Make plans for future jobs. 

7. Introduce your agent to the U.S. commercial 
attache in his country after all they both "work 
for you." He is eligible for help. You and he 
may be surprised at what can be done for him. Not 
long ago, the Dutch agent of one U.S. exporter 
was amazed when he received a list of potential 
instruments customers in the Netherlands. It was 
compiled by the U.S. commercial attache. The 
agent didn't know this was available. (Information 
you take for granted in the United States is not as 



9. Write up a formal agreement with your agent. If 
you have not been to market before, you probably 
have only an informal arrangement. 

TRAVELING TO WHERE YOU DON'T HAVE 
AN AGENT. An earlier chapter discussed how to 
select agents. The first step, a list of potential 
candidates, can be developed without leaving the 
States. The second step, narrowing the list, and the 
final step, selecting the final choice, can be done at 
home, but it's easier to make the right choice in the 
agent's market. Thus, reasons for travel could be: 

1. To get on-the-spot market information to help 
you decide whether or not to sell there. 

2. To add to your potential agent candidates. 

3. To narrow the list. 

4. To formally select an agent. 

A mistake made by exporters is to rush headlong 
into foreign markets without advance preparation. 
The Wall Street Journal recently reported that a U.S. 
businessman lured to the Middle East by stories of 
riches awaiting U.S. suppliers, rushed over to 
investigate opportunities. Ten days later and $5,000 
poorer, he came back to the United States without 
concluding any business arrangements. This exporter 
could have saved time and money by doing some 
homework prior to his spur-of-the-moment travel 
decision. 

BEFORE YOU GO. Before visiting a market, work 
up specific objectives on what you hope to 
accomplish. If your purpose is to "check out" a 
market, an objective would be to come to a "go or 
no-go" decision. Another may be to list agents and to 
narrow down to the best candidate. If you already 
have an agent, your objective could be to give so 
many hours of product training, or to make so many 
sales calls with him. Here is a list of things to do to 
prepare for your trip while still in the States. 



3. Work with a travel agent on the best way to travel 
and where to stay. They know the special fares 
available, and travel documents you'll need. 

4. If you have a foreign agent, ask his recom- 
mendations on what you should do in his market. 
He'll want you to see his best customers. 

5. Set your budget. Foreign travel is expensive. For 
example, good hotels start at $45 in Europe; $35 
in Brazil; and $50 in Japan. 

6. Make application well in advance for the 
necessary travel documents. You will need: 

a. A U.S. passport. Most travel agents can help 
you get one or you can get information and 
an application at your post office. 

b. Some foreign countries require entry visas. 
Your travel agent can advise if one's needed 
and be helpful in applying for one. 

c. Immunization. A good travel agent can tell you 
what shots are required. 

7. Have your travel agent make all airline and hotel 
reservations well in advance. iGood hotels are 
booked up in some countries, particularly in the 
Middle East. It is better to be told "no room at 
the inn" weeks in advance than at 1 1 p.m. on the 
night of your arrival. 

8. Let your agent know as soon as you have firm 
reservations. He will meet you at the airport. 

9. Before you depart, do your homework on market 
conditions and trends. If you are going to ap- 
point an agent, narrow your choice to the best 
two or three candidates prior to your departure, 
and write them in advance. 1 

10. Carry the address and telephone number of 
American Embassies, Consulates, and Trade 
Show Centers. 

ONCE YOU'VE ARRIVED. If you have an agent, 
spend your time with him. Introduce him to the U.S. 
commercial attache if he doesn't know about local 
U.S. Government help. If you are in a country where 
you don't have an agent, you should start with an ap- 
pointment at the U.S. Embassy, Consulate, or Trade 
Center. 

Brief the commercial attache about your trip 
objectives, your products, and other information 
such as typical customers, etc. See page 142 on the 
services von can exnect from him. 



So many U.S. business executives cancel or change 
their travel plans that commercial attaches won't 
make appointments until you arrive. Thus, if you do 
write in advance or alert them through the Com- 
merce Department's District Office your letter will 
be set aside until your actual arrival. 

ADDITIONAL SQURCES FOR POTENTIAL 

AGENTS. Your trip will help you add to the list of 
prospective agents you may already have in the 
United States. Here are additional sources: 

1. Prospective customers can give you suggestions. 
They buy from many firms, and know both "go- 
od" and "bad" local agents. 

2. The foreign branch or correspondent of your U.S. 
bank. Prior to your departure, ask your bank to 
write you a letter of introduction to its foreign 
branch or local correspondent bank. 

3. Chambers of Commerce; Trade Associations. 

FINALIZING YOUR SELECTION. Leave final 
appointment of your agent until after a personal 
meeting. 2 And if your trip's main purpose is to ap- 
point one, make your selection before you go back 
home thus you will have time to work with him. 
Too many exporters depart without "signing" the 
agent and thus lose marketing momentum. The 
increase of their own workload back home often 
hinders a quick decision, and so the agent prospect 
loses interest. 

YOUR AGENCY CONTRACT (OR 
AGREEMENT). A formal arrangement is both a 
legal and marketing document. It is akin to an 
insurance policy hopefully you won't need it, but 
it's nice to have in emergencies! It is a serious matter 
if your agent fails to exploit the market and 
prevents you from giving the territory to someone 
more effective. Agreements should contain clauses 
which define targets, permitting you to cancel if they 
are unmet. Information on agent contracts are 
available from: 

1. Department of Commerce District Offices 

2. Experienced exporters. 

FOLLOW UP YOUR TRIP. If your trip works out 
well, you will have many things to do when you 
return to the States, ranging from a "thank you" 
letter for local entertaining to working up of sales 
quotations. Prompt and effective followup maintains 
momentum. 



rtainlv n/-\cciK1* 



Many exporters advise starting your follow up 
while you are still in the market. Thank you letters 
can be dictated in your hotel. Follow-up instructions 
can be mailed or telephoned. Some exporters 
always schedule a few days at a resort prior to their 
return to unwind and complete all reports. (Business 
travel abroad is hard work!) And they try to catch up 
on their home life before tackling their work backlog. 



TWENTY WAYS IN WHICH U.S. 

GOVERNMENT OFFICIALS ABROAD 

CAN HELP YOU (AND YOUR AGENT) 

DEVELOP BUSINESS 

The U.S. Government maintains Consulates or 
Embassies our Foreign Service posts in every 
important commercial city abroad. They are staffed 
with commercial experts called commercial 
attaches or counselors. In some cities, the U.S. 
Government operates its own Trade Centers. Here 
are free services when you travel. And your foreign 
agent is eligible for most of these as well! 

SERVICES FROM FOREIGN SERVICE POSTS 
(The Commercial Attache) 

1. They can brief on current market trends. 

2. They are familiar with local sales patterns. 

3. They can help identify tariff and nontariff 
barriers. 

4. They can help identify important buyers and 
agencies. For example, most Foreign Service 
posts have commercial libraries with local trade 
directories on hand. 



5. They have copies of WTDR on most important 
businesses in their country. 

6. They can help narrow your list of prospective 
agents. 

7. They can make appointments with prospective 
agents, customers. (They know many personal- 

8. They can setup appointments with key 
government officials. 

9. They can suggest local law firms. 

10. They can suggest local marketing research firms. 

1 1 . They can suggest local interpreters or translators. 

12. They can advise on local business practices. 

13. They know the best restaurants for business 
entertaining. 

SERVICES AVAILABLE FROM TRADE 
CENTER MANAGERS 

1. Conference rooms are available at Trade Centers. 

2. Exhibition space is available for "between show" 
promotions. 

3. Window space is available for displays on your 
product. 

4. Copies of in-depth market research will be on file. 

5. Special trade lists: some may be lists of visitors to 
recent trade center shows; others may be of im- 
portant local firms and key industries. 

6. General advice on the market. 

7. Specialized assistance to your agent. 



CHAPTER XIII 



A FINAL NOTE 



INTRODUCTION. This handbook illustrates only 
the tip of the export iceberg. It will help you on your 
way without requiring large sums of money, or 
requiring specialized personnel. 

But development of a thriving in-house 1 export 
business will take money. You will have to hire 
employees who are specialists in selling abroad and 
handling export paperwork. Your initial export 
efforts will help finance this expansion. 

Hopefully, this handbook has started you on the 
right track. 

This chapter will present a few further ideas. 

FOR YOUR INFORMATION. Here are some 
ideas for you to consider. 

1. Join a world trade club. Exporters in key cities 
have formed clubs. They usually hold monthly 
luncheon or dinner meetings. The Commerce 
Department's District Office or your local 
Chamber of Commerce can put you in touch with 
their clubs. 

2. Review your export activities frequently. Compare 
results with objectives. Adjust your tactics or 
strategy to meet new conditions. 

3. Make sure uour recordkeeping is adequate ex- 
port correspondence and shipments. And watch 
yotfr costs. 

4. Update your export plan, and make it more com- 
prehensive, as your business grows. 

A MODEST EXPORT LIBRARY. Several pub- 
lications will help you. Ask an experienced exporter 
for advice. Here is a start. 

1. Introduction to exporting. These publications sup- 
plement this handbook. 

A Basic Guide to Export. Prepared by the 
Department of Commerce to give information on 
getting started in exporting. Available ($.90) from 
Superintendent of Documents; Government 



guide in selecting the best foreign markets. 
Available ($.60) from Superintendent of 
Documents; Government Printing Office; 
Washington, D.C. 20402. 

Principles and Techniques in Exporting. Intro- 
duction to setting up an export department. 
Available ($12.50) from International Trade Club 
of Chicago; 36 South Wabash Avenue; Chicago, 
111. 60603. 

What Do I Do Now? A primer on preparing 
quotations, shipments, collecting payment, etc. 
Available ($5.00) from Normal M. Sewall; 500 
South Nova Road; Ormond Beach, Fla. 32074. 

International Marketing. A basic textbook on 
marketing written by Roland Kramer. Covers all 
functions encountered in exporting, Available 
($12.50) from Southwest Publishing Company; 
5101 Madison Road; Cincinnati, Ohio 45227. 

2. Shipping/Documentation/Freight Forwarding. 
These references will help the exporter who has 
shipments to many different countries. 

Exporter's Encyclopedia. Published annually. 
Covers requirements in foreign markets, identifies 
sources for assistance. Available ($180) from Dun 
and Bradstreet International; 99 Church Street; 
New York, N.Y. 10007. 

Reference Book for World Traders. A world-wide 
listing of organizations and firms supporting ex- 
porters. Gives shipping requirements for 184 
foreign countries. Two volume loose leaf with 
monthly supplements. Available ($331.95) from 
Croner Publications, Inc.; Queen's Village, N.Y. 
11428. 

3. Government support and assistance. If you know 
where to go and whom to contact, there's a wealth 
of information available from the U.S. 



A FINAL WORD. Exporting can bring profits to 
minority-owned firms willing to give it the same 
energetic attention that went into developing their 
U.S. business. This handbook has explained: 

1. How firms can respond to foreign inquiries; how 
to recognize the "serious" inquiry; how to make 
an export price quotation. Hopefully, firms can 
generate additional business at little or no ad- 
ditional expense. 

2. Describes how to increase inquiries from foreign 
firms. This adds modest cost, but will not prove a 
burden on a firm's personnel. 

3. Describes how export shipments take place and 
how payments are made. The handbook describes 
how to eliminate export headaches through use of 
an international freight forwarder. The handbook 
suggests how to minimize nonpayment even 
when the new exporter sells on credit to unknown 
foreign buyers. 

4. Describes how to organize a more serious effort in 
a foreign market. It gives tips on how to identify 



top markets, minimum support requirements 
needed, and how to select a distributor. (Up to this 
point, the firm has not had to hire specialized 
personnel.) 

5. Describes how to maintain momentum in a 
market by foreign travel and special promotions. 
At this point, export development begins to 
become more expensive and requires a greater 
commitment of time and money. 



Firms that have not explored all opportunities for 
selling to export buyers in the United States, may 
wish to read PART ONE of this handbook: Ex- 
porting in Your Own Back Yard. It identifies the im- 
portant segments of the U.S.-for-export market. 

And those firms who do not have the time, 
personnel or money to build their own export 
business will find PART THREE useful. It describes 
export management companies, and how they can 
develop a substantial export business at very little 
cost to manufacturers. 



PART THREE 



HOW TO FIND AND USE AN EXPORT 
MANAGEMENT COMPANY 



PART THREE presents an alternative to direct exporting through the use of an ex- 
port management company (EMC). This approach requires limited use of a firm's 
time and resources. One advantage cited for use of an EMC is that it gives the firm 
access to instant foreign market knowledge and export know-how. 

The following chapters discuss the role of an EMC; the pros and cons of its use; 
selection of an EMC; and suggestions for developing an effective relationship with 
an EMC. 



CHAPTER 1 

WHAT'S AN EXPORT MANAGEMENT COMPANY 

(EMC)? 



ARE YOU SO BUSY? Can you handle the special- 
ized details of export? Do you have the money or 
personnel to develop the U.S.-for-export market 1 Or 
to sell directly to foreign customers 2 Or are you so 
busy with your U.S. customers that you can't spare 
the time to develop an export business? 

If the answer to these four questions is "No," then 
do as over 5,000 small (and even some large) 
manufacturers have done: turn over the job of 
building an export business to a specialized export 
sales firm called an Export Management Company 
(EMC). 3 

You will have very few out-of-pocket costs. Most 
EMC's will pay you either cash with their order, or 
pay you on whatever terms you sell your best U.S. 
customers. 

WHO SHOULD USE AN EMC? All manufacturers 
without export experience should consider an EMC. 

Example: Because they hadn't the time, Sporlan 
Valve Company, a leading manufacturer of 
refrigeration components, decided to let an EMC 
develop exports. Immediate sales resulted, and now 
exports account for a satisfactory portion of 
Sporlan' s total business. 

Even sophisticated exporting manufacturers may 
also want to consider using an Export Management 
Company for selected products for certain foreign 
markets. 

Example: A large New Jersey based manufacturer of 
electrical components has its own export 
department, but it uses an EMC for exports to the 
Middle East. 

WHAT'S AN EXPORT MANAGEMENT 
COMPANY? An EMC is an independent firm 
which, in effect, acts as the exclusive sales department 
for non-competing manufacturers. It functions in 
foreign markets just as a sales representative or ex- 



clusive wholesaler functions for a manufacturer in the 
U.S. market. An EMC usually has a formal 
agreement with manufacturers to "manage" their 
"exports." Sometimes EMC's will represent all of a 
manufacturer's product line, but not always. The 
EMC generally receives exclusive rights to sell in all 
foreign markets, but, again, not always. 

Some EMC's Act as an Agent. The EMC solicits 
orders from foreign customers, but in the name of the 
manufacturer (whom the EMC often calls "the 
principal" or "the factory"). The EMC helps the 
manufacturer with the details of the export 
transaction, but invoicing is done in the name of the 
manufacturer. The manufacturer bears the risk of 
nonpayment, and may be asked to extend credit to 
the customer. "Agent" EMC's are paid a commission 
on the export sale. The EMC may suggest an export 
price, but his principal has the final say, both on price 
and on whether or not to accept the order. 

Example: Ballagh and Thrall, a leading Philadelphia 
EMC, operates this way with many of its principals. 
It even uses factory letterheads when corresponding 
with foreign customers. Foreign customers may not 
know they are dealing with a separate firm. 

Other EMC's Act as a Distributor. More 
frequently, EMC's operate on a "buy-sell" basis. 
They buy from their manufacturers at a set price, and 
resell to foreign customers. However, they market 
abroad in the name of their manufacturers. 

Example: EMEC, a Miami-based export 
management company, has exclusive export sales 
agreements with 30 manufacturers of scientific 
instruments. When orders are received, EMEC buys 
from their principals and resells to the foreign 
customer. EMEC invoices the customer, extends 
credit (if necessary), and bears the risk of 
nonpayment. EMEC pays its manufacturers on the 
same basis as their U.S. customers. 



manufacturer's products are technical and call for 
special servicing and/or installation, or product 
adaptation to meet special customer's needs. 

Manufacturers and EMC's also work closely on 
pricing and foreign customer relations in order to 
"sew-up" export sales. 

EMC'S COME IN ALL SHAPES AND SIZES. No 
matter what you make, one or more of the 600 to 
1,000 Export Management Companies in the United 
States is capable of handling your exports. But they 
are not all alike. 

Size. Some EMC's are relatively large. They will 
handle lines from as many as 50 to 100 U.S. 
manufacturers, cutting across a wide range of 
industries, and export to most world markets. Their 
annual sales may be as high as $50 million. 

Example: J.D. Marshall International, head- 
quartered in Skokie, III., exports products ranging 
from electric motors and controls to construction 
machinery for many U.S. manufacturers. 

Other EMC's are smaller and will have a few 
carefully selected principals. Their annual sales will 
range from $500,000 to $5 million. 

Example: Lonor St. Germaine is a New Jersey EMC 
which represents several carefully chosen 
manufacturers. 

Degree of Specialization. Some EMC's specialize in 
certain fields: e.g., refrigeration. 

Example: Laster International, Inc., a New York 
City EMC, handles pleasure boats and marine 
accessories. 

On the other hand, some EMC's handle a broad 
line of products to many industries. 

Example: Singer Products, another New York City 
EMC, sells communication, automotive, and 
industrial equipment as well as consumer and audio 
products. 

Geographic Specialization. The majority of EMC's 
sell to all (or practically all) foreign markets. Others 
concentrate on a particular region or country. 

Example: Middle East Traders, Inc., an EMC 
located in Washington, D.C., specializes in sales to 
the Middle East. 

Corporate Form. Most EMC's are independent 
businesses. However, a few large corporations have 
established EMC's as subsidiaries. 



buyers on a contract basis for foreign firms. They will 
buy specific U.S. goods at the request of foreign firms 
or governments. Several EMC's maintain their own 
overseas sales offices in important markets. 

Example: The Auriema International Group, Inc., 
has a New York City-based EMC, plus branch 
companies in several markets. They sell Auriema' s 
EMC lines, but some of these offices also act as 
agents for other U.S. manufacturers. 

HOW AN EMC EXPORTS. Export Management 
Companies usually have long-established sales 
networks abroad. Some such as Lonor St. Germaine 
have even established foreign sales and warehousing 
subsidiaries. But more commonly, EMC's appoint 
export agents, or representatives, and networks of 
exclusive distributors and dealers in each of the 
foreign markets in which they sell. 

EMC's are experienced in all facets of exporting: 
foreign travel, correspondence with foreign agents, 
customers, and prospects. Here are the typical 
strengths of an EMC. 

1 . An ability to handle detail. EMC's have the know- 
how to answer inquiries, prepare quotations, enter 
orders, and handle shipping and payment details. 
They are export professionals. It is their business. 
The lifeblood of an EMC is active contact with 
overseas firms. 

2. An ability to establish a strong overseas 
distribution system. They have the know-how to 
select agents and distributors and to back them 
up. And they know when to make an agent 
change. 

3. They are experts on business conditions abroad. 
EMC executives travel for first-hand experience. 
Even at the home office, they constantly appraise 
market conditions and sales opportunities. 

4. Their profits are based on how much they sell. 
Thus, they're motivated to do a good job. 

BUT EMC'S HAVE SOME LIMITATIONS. Ex- 
port Management Companies aren't successful for 
all. 

1. EMC's, for the most part, are relatively small, and 
may have limited financial resources. Thus, some 
may not be able to stock your products, or to offer 
extended in-house financing to foreign customers. 

2. EMC's focus their efforts on those product lines 
that bring them the most profitable business. New 
Lines, or those with limited potential, may be 



are independent businesses. When an EMC acts 
on a buy-sell basis, factories sometimes have no 
control over who buys their products, or the sel- 
ling price, the degree of promotion, etc. 

WHAT DOES AN EMC CHARGE? Their charges 
to you vary depending upon your product, the degree 
of promotion required, and the EMC's method of 
operation. 

1. EMC's operating on a commission basis. If an 
EMC acts on a commission basis, it will usually 
want one that equals your best domestic com- 
mission. This might range from 10% for consumer 
goods to 15% or more for industrial products. 

2. Distributors. EMC's that function on a buy-sell 
basis will ask for your best U.S. discount plus an 
extra discount. An EMC exporting high 
technology electronics says he needs a minimum 
of 15% beyond the manufacturer's best U.S. dis- 
count. Many . EMC's that do accept the 
manufacturer's best U.S. price will usually have to 
mark up the product more than your U.S. 
distributor in order to make a profit. 

3. Other charges. In addition to commissions of dis- 
counts, an EMC may charge for other items. Some 
EMC's will ask for "special events" contributions. 
A New York City EMC asks its factories to share 
overseas trade show costs on a 50-50 basis. In 
some cases, on overseas trade shows, the cost split 
is V3-V3-V3 as the foreign agent also contributes. 
Other EMC's require a contribution for 
advertising and other promotional activities, 
usually on a shared basis. A Miami EMC looks 
for factory contributions equal to the amount the 
factory spends in the United States for an 
equivalent level of sales. And the EMC matches 
this contribution with its own funds. 

A few EMC's ask for a monthly retainer. One says: 
"We only do this when we promote heavily in order 



to establish a new line." It's unusual for the well- 
established EMC to ask for a retainer for other 
reasons. 

ARE THE EXTRA DISCOUNTS JUSTI- 
FIED? Some manufacturers feel EMC services are not 
worth the extra discount they get. But remember, an 
EMC has many costs that even domestic distributors do 
not have. Some of these: 

1. Commissions or special discounts to their foreign 
agents. 

2. The cost of running an export business: specialized 
personnel; telephone, telex, and cable charges; 
postage. 

3. Promotion costs, if not shared with their factories. 

4. Costs for quoting, entering orders, the 
considerable export paperwork, etc. 

5. Cost of foreign travel. (Most EMC's travel 
extensively.) 

EMC's claim, for example, that they receive little 
or no benefit from their factories' domestic 
promotion or trade show expenses. Therefore, they 
want lower prices as the EMC will be responsible 
for export promotion and special expenses. 

TO SUM UP. Many U.S. manufacturers have found 
they can develop a profitable export business without 
their own built-in export department through use of 
an export Management Company (EMC). And most 
EMC's will pay you on the same basis as your best 
domestic customers, thus minimizing cash-flow 
problems. No matter what your goods are, you will 
find an EMC capable of handling your exports. 
EMC's come in many forms and shapes. While they 
ask for an extra commission or a discount greater 
than that normally given to U.S. representatives and 
distributors, their requests are often justified because 
of the greater costs of doing business abroad. 



CHAPTER II 



EMC'S: SHOULD YOU USE ONE? 



AN EMC COULD BUILD YOUR EXPORT 
BUSINESS. One or more EMC, has the experience 
and capability to handle your products. But should 
you use one? This chapter lists the pros and cons of 
using an Export Management Company, and how to 
find them. 

ADVANTAGES TO USING AN EMC. Here are 
four: 

1. Export sales come quicker. EMC's already have 
overseas agents, distributors, and customers in 
place. If your product complements some that an 
EMC handles, you may get immediate sales. If 
you were to set up your own export sales effort, it 
would take much longer to generate export 
business. 

2. Your out-of-pocket expenses will be less. If you go 
it alone, you will have out-of-pocket expenses in 
handling export transactions, in identifying your 
best foreign markets, and in setting up distribution 
in one or more countries. These expenses will be 
eliminated (or substantially reduced) by using an 
EMC. The only "cost" is the extra discount and 
agreed-upon sharing of other expenses. 

3. An EMC has the time. Even if you do have the 
financial resources for an in-house export effort, 
you may not have the time for it due to other 
priorities. An EMC may be the answer, because 
100% of its time is spent in developing and 
maintaining exports. 

4. You will learn from a pro! There is no better ex- 
port practitioner than EMC. If you want to have 
your own export department eventually, then 
prepare yourself by seeing how an EMC operates. 1 

THERE ARE DISADVANTAGES TOO. In your 
U.S. marketing efforts, if you've faced the choice of 
distributor versus company salesman, you will 
understand some of the possible disadvantages in 
using an EMC. 

1 . The biggest disadvantage could be loss of control 
over sales. You are dependent on the EMC. You 
take its word that it's doing the best job possible. 
However, you can overcome this by overseeing its 



efforts, and asking for frequent performance 
reviews. 

2. Some of the EMC's foreign agents may already 
handle competitive products, and won't want (or 
are unable) to change. This will restrict the EMC's 
initial efforts to launch your product. But most 
EMC's either have additional overseas contacts, 
or can quickly develop them. 

3. Some foreign buyers may be reluctant to deal with 
an EMC. They prefer to deal directly with the 
manufacturer. They'll equate dealing with a mid- 
dleman (the EMC) with "higher prices." 
However, some manufacturers who use EMC's 
insist that the overseas price be the same as the 
domestic one. (Of course, when export shipping 
costs are added, the overseas customer's total cost 
for a U.S. product is usually higher than what a 
U.S. -based customer might pay.) 

4. Your products may not be competitive abroad if 
you sell on the basis of your U.S. prices. The EMC 
is a middleman. It adds costs. If you are in a 
competitive industry, the cost of using an EMC 
may make you noncompetitive. Or if you are using 
an EMC on a buy-sell relationship, its markup on 
prices could put you in noncompetitive positions. 

5. Your products may be lost among others that the 
EMC sells. Large EMC's particularly have well- 
established "bread and butter" lines. These may 
get the lion's share of the firm's sales effort. 

FINDING AN EMC. Finding an EMC that can 
handle your products is not as easy as it should be. 
EMC's tend to be very independent. They don't 
readily band together nor do they generate much 
publicity about themselves. Thus, EMC's based in 
New York may not be well known to manufacturers 
in Chicago or elsewhere outside the New York area. 
But with some diligence, you'll be able to locate an 
EMC capable of handling your products. 

Our approach is first to develop a list of several 
EMC's who have experience with your product or 
complementary ones. Then narrow the list to one or 
two. And remember: EMC's are constantly on the look- 
out for new lines, but they are selective. They don't 



YOUR BEST SOURCES. There are several regional 
associations of Export Management Companies. The 
most active groups are listed below. These 
regional associations have banded together to form a 
national federation of export management 
companies. Your top choice for locating an EMC are 
the regional associations and the national federation. 

The Regional Associations. You'll have two reasons 
to contact them. 

1. Write each association about your interest in an 
EMC. Attach a few product leaflets. The 
association secretary will circulate your inquiry 
among its members. Those interested (hopefully) 
will contact you. 

2. Also ask for membership lists. Some lists are 
better developed than others, and they identify 
member firms and indicate their area of specializ- 
ation. Thus, you can contact firms of potential 
interest on your own. 

The National Federation of Export Management 
Companies (FEMCO). By writing to FEMCO, your 
request may be published in their newsletter which 
circulates to all associations and their members. 

See page 153 for a sample letter to an EMC 
association or to FEMCO. 

OTHER SOURCES. Not all EMC's are members of 
associations. Others in the export "community" can 



suggest potential EMC's. These sources include: 

1. Your trade association. Many trade groups have 
EMC's as active members, or your association 
may know which EMC's are experienced in exp- 
orting products similar to yours. 

2. Trade publications. Those in your industry, 
particularly the marketing magazines, will know 
the EMC's in your product field. There are also 
specialized export trade publications. Two of the 
more popular ones are Export, 386 Park Avenue 
South; New York, N.Y. 10016. The second: Re- 
portero Industrial, 10 Cutter Mill Road, Great 
Neck, N.Y. 11021. 

3. The U.S. Department of Commerce District 
Offices. They are very familiar with EMC's in 
their areas, and gladly will give you names. But the 
best EMC for you may be located in another part 
of the country and unknown to the district office 
nearest you. 2 

4. Washington officials familiar with EMC's. Both 
the Department of Commerce and the U.S. 
Department of Agriculture are knowledgeable on 
EMC's and may be able to help you develop a list. 



2 You do not need an EMC in the same city or even close 
by. It's more important to find an EMC that knows your 
field. 



THESE ARE THE MOST ACTIVE ASSOCIATIONS 
OF EXPORT MANAGEMENT COMPANIES 



The Association of New England 
Export Management Companies 
P.O. Box 5 

Moodus, Conn. 06469 
(203) 873-8968 

Export Managers Association of 
Southern California 
1537 Pontius Avenue 
Los Angeles, Calif. 90025 
(213)479-3911 

National Association of Export 
Management Companies, Inc. 
65 Liberty Street 
New York, N.Y. 10005 



Overseas Sales and Marketing 
Association of America, Inc. 
P.O. Box 45446 
Chicago, 111. 60645 
(312)583-6060 

Pacific Northwest Association of 

Export Managers 
5316 S.W. Westgate Drive 
Portland, Oreg. 97211 
(503)292-9219 



Type of Goods Contact 

Agricultural Foreign Agricultural Service 
Products U.S. Department of Agriculture 

Washington, D.C. 20250 

Manufactured Bureau of International Commerce 
Products U.S. Department of Commerce 

Washington, D.C. 20230 

5. Others in the export "community." Banks, freight 
forwarders, and experienced exporters can suggest 
EMC's. 

6. Directory of U.S. Export Management 
Companies. The U.S. Department of Commerce 
has published a list of export management firms. 
Unfortunately it has many firms that are not truly 
export management firms, but are export 
merchants. It lists firms by area of specialization 
so it's still useful. It is available for 75 cents from 
the Superintendent of Documents; Government 
Printing Office; Washington, D.C. 20402. 

7. Food and Agriculture Directory. The Foreign 
Agricultural Service of the U.S. Department of 
Agriculture publishes a comprehensive guide to 
export management companies who specialize in 
food, farm, and dairy products. For a free copy, 
contact: Foreign Agricultural Service; U.S. 
Department of Agriculture, Washington, D.C. 
20250. 

CONTACTING EXPORT MANAGEMENT 
COMPANIES. Once you have a list, narrow it to no 
more than three EMC's. A letter plus a followup 
telephone call and perhaps a personal visit can help 
you to narrow your list quickly. 

Here are some key points in your initial letter to 
the EMC's. 

1. Make known your interest in an Export 
Management Company. 



2. Describe your products. Enclose catalogs and 
price sheets. NOTE: if your catalog is not up-to- 
par, do not send it. It will create a bad image. 

3. Identify your important U.S. market segments 
and list typical customers. 

4. Describe your company. Indicate any previous 
export experience or if you have had inquiries 
from abroad. 

5. Ask about the EMC's activities. In particular, ask 
for a description of his firm, how he is organized 
to export; lines handled; and principals he 
represents. 

If the EMC is interested, you'll get a quick reply or 
a telephone call. See pagel 54 for a sample letter to an 
EMC. 

WHILE YOU'RE LOOKING FOR AN EMC, IT 
MAY BE LOOKING FOR YOU! Most Export 
Management Companies are constantly on the look- 
out for new profitable lines. One reason: if they do a 
top sales job for their manufacturers, they often set 
up an in-house export department. EMC executives 
frequently visit trade exhibitions to look for new prod- 
ucts. They also use direct mail. That's why it's im- 
portant to list your firm and its products in the appro- 
priate Buyer Guide Product Directories. 3 

TO SUM UP. An EMC offers many advantages to 
the firm that wants exports. While there are 
disadvantages, most can be overcome. However, 
finding an EMC will take time. The 600 to 1,000 
EMC's aren't easily identifiable. But you can come 
up with a list of several firms that are experienced in 
exporting a similar product to your own. 



3 See PART ONE for the importance of Buyer Guide 
Directories and how to get listed. 



YOUR COMPANY, INC. 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 

(Sample Letter to an EMC Association) 



National Federation of Export 

Management Companies, Inc. 
65 Liberty Street 
New York, N.Y. 10005 

Gentlemen: 

Your Company, Inc., markets a line of asphalt additives. These additives 
extend the life of asphalt surfaces such as highways and parking lots, and we feel 
they have applications in foreign markets. We have received inquiries from firms 
in Canada, Korea, and the Middle East. 

We are seeking an Export Management Company to help build our export business. 
We would appreciate your informing Export Management Companies in your associations 
of our interest. We would also like any list of EMC's with experience handling 
related products. 

YCI, founded in 1973, has sales of $1.3 million. Further details are given 
in the attached brochure outlining our capabilities. Our major customers include 
highway contractors such as the XYZ Company, and state highway agencies. 

Don't hesitate to telephone if you need further details. We look forward to 
obtaining names of potential EMC's. 

Sincerely, 



N. T. Joyner, Jr. 
President 



YOUR COMPANY, INC 

1 1 1 MAIN STREET 

HOMETOWN, VIRGINIA 22101 

703/821-1860 

(Sample Letter to an EMC) 



EMC, Inc. 

World Trade Center 

Miami, Florida 33165 

Gentlemen: 

Your Company, Inc., markets a line of asphalt additives which extend the lif 
of asphalt surfaces such as highways and parking lots. The attached catalog and 
specification sheets give detailed information about our products. Our two most 
important market segments are highway contractors and state highway agencies. Ou 
major customers include (name them). 

We are seeking an Export Management Company to handle exports. We believe 
there is a growing international market. We have received inquiries from firms i 
(name foreign countries). 

YCI, founded in 1973, has sales of $1.3 million. Further details are given 
in the attached brochure outlining our capabilities. 

We realize that developing an export business takes hard work, and we are 
prepared to support our Export Management Company. If you are interested in 
handling our exports, we would appreciate your response with the following inform 
tion: 

1. A brief description of your firm, its experience, and capabilities. 

2. Major product lines exported, and manufacturers you represent. 

3. Major industries served, and major markets. 

Don't hesitate to telephone if you need further details. We look forward to 
your prompt reply. 

Sincerely, 



CHAPTER III 



SELECTING AN EMC 



SUCCESSFUL EMC'S SELECT THEIR 
PRINCIPALS CAREFULLY. And you should do 
the same! If you want to end up with an EMC that 
will do a good job for you, you must first narrow 
your choice to one or two and then "sell" your prod- 
duct's profit potential. 

NARROWING YOUR LIST. Here's what you 
should be finding out about EMC's on your list. 

1. Are the EMC's other product lines compatible 
with yours? 

2. Which manufacturers does it represent? And for 
how long? (Eliminate any EMC who has your 
competition.) 

3. What are the EMC's sales figures for these firms? 

4. Who will actually sell your products? Unless they 
are very small, most EMC's have different sales 
managers for different lines. Ask him how often he 
travels, find out his sales and export experience. 

5. What method does the EMC favor in dealing with 
manufacturers? What kind of pricing, financial 
support, etc., will normally be requested? 

6. What are the EMC's major foreign markets? In 
particular, ask about Canada, Puerto Rico, and 
Mexico. Most EMC's exclude Canada the top 
market for U.S. exports. 

WHERE TO GET THE INFORMATION. Here's 
how to develop background information on 
prospective EMC's. 

1. The EMC itself. Replies to your letters should in- 
clude much information, or you'll get it through a 
followup telephone call. 

2. Talk to the EMC principals. A good EMC will 
give you references. Be wary of any that hesitate or 
won't. Ask the principals about the EMC's 
strengths and weaknesses from their viewpoint. A 
cardinal rule: never select an EMC without 
checking at least two of his manufacturers. 



be a waste of his time. Therefore, he'll check your 
product and your firm's reputation. Here are the 
questions he will ask. 

1. Will your products sell abroad? Some EMC's that 
specialize in your product area will have an im- 
mediate reaction as to its foreign potential. Others 
will send your product catalogs and prices to their 
foreign agents or distributors and ask for their 
opinion. 

2. Will you support the EMC's efforts? The EMC 
needs to know that you will meet shipping 
deadlines and fill orders promptly, that you will 
back up his sales efforts with adequate 
promotional material, and that you will make 
emergency shipments, if required. 

3. How you market in the United States. 

4. References. An EMC may ask for lists of your 
customers and suppliers. Just as you will want to 
check his references, he'll want to check yours. 

NEGOTIATING AN ARRANGEMENT. If an 
EMC is interested in selling your product, here are 
some key items for a face-to-face meeting. 

1. At what price (or commission) do you sell your 
product? An EMC probably will ask for a higher 
price discount or commission rate. Discuss prices 
thoroughly. Here are three points. 

a. The EMC may not need quite as large a"break" 
as he has indicated. 

b. The EMC may be able to sell at a higher price 
than what you get in the U.S. market. Thus, 
you get what you need; the EMC gets what he 
needs. 

c. You may be able to meet his requests if a cost 
analysis indicates you can still make a profit. 
But don't give an additional discount if it 
means that you are going to lose money! 



a. Will the EMC or you be responsible for selling 
to U.S. -based export buyers? 

b. What are your obligations to the EMC if you 
sell a U.S. customer whom you know is buying 
for export? 

(And don't forget some manufacturers use 
more than one EMC. For example, one for 
Europe; another for Latin America; and 
another for the Middle East.) 

3. Length of agreement. Most likely, EMC's will ask 
for a 2 to 3 year exclusive arrangement. 

4. Exclusions. If you already sell to the U.S.-for- 
export market, you may want to exclude these 
sales. (However, most EMC sales contracts specify 
that they handle these sales.) Or if you have an 
export business with a few old customers on a 
direct basis, you may want to exclude these from 
an EMC arrangement. 

5. The EMC's obligations. Tie down the EMC on his 
obligations to you. For example, what kind of 
promotion will he do for your products? How 
much travel on your behalf? Will the EMC give 
you sales objectives and projections so you can 
measure performance? 

6. Your obligations. What does the EMC expect 
from you? Will you need to supply samples? If so, 



how many? Will your product require special 
adaptations? (For example, 60-cycle electrical ap- 
pliances won't operate in most world markets. 
They need to be modified for 50-cycle.) And does 
the EMC expect you to contribute money, either 
for specific activities or on a retainer basis, to help 
finance the product introduction? 

FORMAL OF INFORMAL ARRANGE- 
MENT? If you both agree to a relationship 
a trial of 6 months or longer may be a better 
idea than a formal 3 year arrangement. You 
can get to know each other, but there are 
disadvantages. The EMC may not be as willing to 
devote its resources to launching your product. Thus, 
a formal arrangement is then advisable. All good 
EMC's will have standard contract forms. Ask for 
one to review. Don't be bashful about asking for 
changes. The EMC's initial contract offer could be 
"tilted" in his favor. Most EMC's are practical 
businessmen and their agreements won't be lengthy 
or filled with "legalese." And don't be hesitant about 
talking over a prospective arrangement with other 
manufacturers handled by the EMC. 

TO SUM UP. To find the EMC that will do the best 
job for you, develop a list of potential candidates. 
There are many sources to find EMC's. When you 
find one, negotiate a sales agreement that will please 
both of you. 



CHAPTER IV 



MAKING THE MARRIAGE WORK 



DON'T FORGET YOUR EMC. Once the contract 
is signed, too many manufacturers ignore their EMC. 
This chapter discusses the ongoing relationship with 
your Export Management Company and, if need be, 
how and when to terminate the relationship. 

"MANAGE" YOUR EXPORT MANAGEMENT 
COMPANY. Remember, your EMC acts as your 
export department. Just as you oversee your domestic 
sales effort, so should you manage your export effort 
as implemented by your EMC. Your main 
responsibilities: help it plan, give it backup support, 
and measure its performance. 

DEMAND A PLAN! Most EMC's aren't asked to 
plan. Thus, if you ask yours to give you a market plan 
for developing exports, you may not get one. But 
persist! Ask for a simple plan. Try to get the plan on 
an annual basis. As a minimum, ask for an annual 
sales forecast. Why a plan is needed: it will give you a 
standard of suggested performance for comparison 
with actual results. 

SUPPORT YOUR EMC. Put him on your customer 
mailing list. Many manufacturers don't do this and 
EMC's often complain that material sent to domestic 
sales organizations don't reach them. For example, 
be sure your EMC receives your new sales catalog, 
new product announcements, sales tips, etc. Here are 
other ways to support your EMC: 

1 . Invite their personnel to visit your factory for prod- 
uct training. (A must!) 

2. Help train his agents or distributors by en- 
couraging them to visit your plant. 

3. Take foreign trips with EMC salesmen to help 
promote sales. 

4. Make sure EMC personnel come to your annual 
sales meeting. 

5. Visit the EMC: make it feel wanted. 



uct. Wisit the EMC and spend time, not only with 
the executives, but with those who have direct sales 
responsibility for your products. Get a feel for their 
level of effort. 

TERMINATING A RELATIONSHIP. There may 
be times when you will want to change your EMC. 
Here's some possible reasons: 

1. You are unhappy with the EMC's performance. 
Make sure that his poor performance is not linked 
with your poor performance. The EMC's failure 
may stem from the fact that you didn't give him 
support. 

2. The EMC is unhappy with your product. Sales 
can't be developed because of product problems 
such as inappropriateness for export markets, 
noncompetitive pricing, etc. Thus, an EMC may 
want to drop you rather than vice versa. 

3. You want your own in-house export department. 

WHEN SHOULD YOU EXPORT ON YOUR 
OWN? Some manufacturers maintain an EMC 
relationship for 20 years or longer. Others keep one 
only until the point where it will be profitable to 
undertake their own export setup. But, before you try 
to do this, you should be certain you can do it on a 
profitable and continuous basis. If you want to 
establish an in-house export department, consider 
first the EMC's annual sales and secondly, the extra 
"discount" the EMC depends on for his profitable 
operation. 

Example: Your EMC exports $300, 000 of your prod- 
uct. Assume he gets a 15% "extra" discount. Thus, 
your "cost" of using the EMC is $45,000. 

Compare the "cost" with what it would cost to set 
up your own organization. And consider any exports 
you will lose because of changing relationship with an 
EMC as well as additional sales because of an 
increased attention to your goods. 



And support your EMC in the same way you back up give your EMC, the greater likelihood of build 
your domestic sales personnel. The more support you successful export business. 



<r U. S. GOVERNMENT PRINTING OFFICE : 1978 261- 



DISTRICT OFFICES OF THE U.S. DEPARTMENT OF COMMERCE 
Specialists in these offices can assist in your exporting efforts. 



District Offices 

Albuquerque, N.M., 87102, 505 
Marquette NW, Suite 1015 (505) 
766-2386. 

Anchorage, 99501, 632 Sixth Ave., 
Hill Bldg., Suite 412 (907) 265- 
5307. 

Atlanta, 30309, Suite 600, 1365 
D eachtree St., N.E. (404) 526-6000. 

Baltimore, 21202, 415 U.S. Custom- 
house, Gay and Lombard Sts. (301) 
962-3560. 

Birmingham, Ala., 35205, Suite 200- 
201. 908 S. 20th St. (205) 254-1331. 

Boston, 02116, 10th Floor, 441 
Stuart St. (617) 223-2312. 
Buffalo, N.Y., 14202, Room 1312, 
Federal Bldg., 111 W. Huron St. 
(716) 842-3208. 

Charleston, W.Va., 25301, 3000 
Mew Federal Office Bldg., 500 
auarrier St. (304) 343-6181, Ext. 
375. 

Cheyenne, Wyo., 82001, 6022 
3'Mahoney Federal Center, 2120 
Dapitol Ave. (307) 778-2220, Ext. 
2151. 

Chicago, 60603, Room 1406, Mid- 
Sontinental Plaza Bldg., 55 E. Mon- 
oe St. (312) 353-4450. 
Cincinnati, 45202, 10504 Federal 
Dffice Bldg., 550 Main St. (513) 
384-2944. 

Cleveland, 44114, Room 600, 666 
Euclid Ave. (216) 522-4750. 
Columbia, S.C., 29204, Forest Cen- 
ter, 2611 Forest Dr. (803) 765-5345. 
Dallas, 75242, Room 7A5, 1100 
Commerce St. (214) 749-1515. 
Denver, 80202, Room 165, New 



Custom House, 19th and Stout Sts. 
(303) 837-3246. 

Des Moines, Iowa, 50309, 609 Fed- 
eral Bldg., 210 Walnut St. (515) 
284-4222. 

Detroit, 48226, 445 Federal Bldg., 
231 W. Lafayette (313) 226-3650. 
Greensboro, N.C. 27402, 203 Fed- 
eral Bldg., W. Market St., P.O. Box 
1950. (919) 378-5345. 
Hartford, .Conn., 06103, Room 610- 
B, Federal Office Bldg., 450 Main 
St. (203) 244-3530. 
Honolulu, 96813, 286 Alexander 
Young Bldg., 1015 Bishop St. (808) 
546-8694. 

Houston, 77002, 1017 Old Federal 
Bldg., 201 Fannin St. (713) 226- 
4231. 

Indianapolis, 46204, 357 U.S. Court- 
house & Federal Office Bldg., 46 
E. Ohio St. (317) 269-6214. 
Los Angeles, 90049, Room 800, 
11777 San Vicente Blvd. (213)824- 
7591 

Memphis, 38103, Room 710, 147 
Jefferson Ave., (901) 534-3213. 
Miami, 33130, Rm. 821, City Na- 
tional Bank Bldg., 25 W. Flagler 
St. (305) 350-5267. 
Milwaukee, 53202, 605 Federal 
Office Bldg., 517 E. Wisconsin Ave. 
(414) 224-3473. 

Minneapolis, 55401, 218 Federal 
Bldg., 110 S. Fourth St. (612) 725- 
2133. 

New Orleans, 70130, Room 432, 
International Trade Mart, 2 Canal 
St. (504) 589-6546. 
Hew York, 10007, 37th Floor, Fed- 



eral Office Bldg., 26 Federal Plaza, 
Foley Sq. (212) 264-0634. 
Newark, N.J., 07102, Gateway Bldg. 
(4th floor) Market St. & Penn Plaza 
(201) 645-6214. 

Omaha, Neb., 68102, 1815 Capitol 
Ave., Suite 703A (402) 221-3665. 
Philadelphia, 19106, 9448 Federal 
Bldg., 600 Arch St. (215) 597-2850. 
Phoenix, Ariz., 85004, 508 Greater 
Arizona Savings Bldg., 112 N. Cen- 
tral Ave. (602) 261-3285. 
Pittsburgh, 15222, 2002 Federal 
Bldg., 1000 Liberty Ave. (412) 644- 
2850. 

Portland, Ore., 97204, Room 618, 
1220 S.W. Third Ave. (503) 221- 
3001. 

Reno, Nev., 89502, 2028 Federal 
Bldg. 300 Booth St. (702) 784-5203. 
Richmond, Va., 23240, 8010 Fed- 
eral Bldg., 400 N. 8th St. (804) 782- 
2246. 

St. Louis, 63105, 120 S. Central 
Ave. (314) 425-3302. 
Salt Lake City, 84138, 1203 Federal 
Bldg., 125 S. State St. (801) 524- 
5116. 

San Francisco, 94102, Federal 
Bldg., Box 36013, 450 Golden Gate 
Ave., (415) 556-5860. 
San Juan, P.R., 00902, Room 100, 
Post Office Bldg. (809) 723-4640. 
Savannah, 31402, 235 U.S. Court- 
house and Post Office Bldg., 125- 
29 Bull St. (912) 232-4321, Ext. 
204. 

Seattle, 98109, 706 Lake Union 
Bldg., 1700 Westlake Ave. North 
(206) 442-5615.