Export trading companies, which act as international distributors, can offer a wealth of experience in negotiating the labyrinths of overseas transportation, customs duties, and other regulations. For growing businesses, trading companies can be an inexpensive way to tap foreign markets.
"Different export traders provide different levels of service that have to be negotiated," says Tom Erickson, CEO of The Chromaline Corp., a specialty-chemical company in Duluth, Minn. Once Erickson gained some overseas exposure, he was able to win synergistic terms with traders.
Erickson discovered that his company's export trader, H& H Exports, also in Duluth, lacked experience with printing-industry clients. So, he struck a deal. Chromaline gave the export trader a list of hot and cold overseas prospects in exchange for H& H's market research findings. Under the terms of the agreement, Erickson accompanied the export trader on sales calls, while H& H benefited from his introductions to existing clients and familiarity with the industry. H& H Exports handled Chromaline's shipping, documentation, and delivery, and H& H had ultimate control of pricing. Still, Erickson got access to the customer list and numbers. "It was difficult learning how to price," he admits, "so our export trader really helped with that."
When Chromaline started exporting with H& H in 1984, its sales were in the low six figures. The company's sales have since climbed to more than $8.9 million--one-third from overseas--and it has its own corporation in France and a manufacturing facility in India.