This presentation is about import and export and it tells you about the procedure and other things which can provide a lot of knowledge about them

1. Exports And ImportsExports And Imports
Made byMade by
SAHIB ARORASAHIB ARORA

2. Exports And ImportsExports And Imports
Opportunities and risks of exporting
Steps to improve export performance
Information sources/programs on
exporting
Financing exporting
Countertrade as an export facilitator

3. Exporting Opportunities and RisksExporting Opportunities and Risks
 Perception: Exports
– Offer huge revenue / profit opportunities overseas
– Are “there for the pickings”
 Large firms are more successful
– Proactive about exporting to realize promise
– Systematic effort backed by knowledge of overseas markets
 Smaller firms are reactive
– Overseas markets are an afterthought
– Ad-hoc effort on an opportunistic and often naïve basis
 Exports require volumes of specialized paperwork

4. US Export SupportUS Export Support
www.doc.gov
www.ita.doc.gov

5. Export Performance Improvement FactorsExport Performance Improvement Factors
 Government information sources
– US: various parts of the Dept. of Commerce
– Other countries: similar entity
– Embassies and consulates: commercial
sections
 Export management companies
– Act as the export department of firms
– Experienced specialists
– Not exclusive
 Focused export strategy

6. Some Successful Export StrategiesSome Successful Export Strategies
Enter on a small scale to reduce risks
Add product lines after export
operations begin to be successful
Hire locals to promote the firm’s
products

7. Exporting StrategyExporting Strategy
 It helps to hire an EMC or, at least, someone with
experience.
 Focus on one or a few markets.
 Enter markets on a fairly small scale until you ‘learn the
ropes’. Add new lines after initial success.
 Need to recognize the time and managerial commitment.
 Build strong and lasting relationships.
 Hire locals to help firm establish itself.
 Keep the option of local production in mind.
© McGraw Hill Companies, Inc., 2000

8. Export ProcessExport Process
Evaluate export potential
 financial resources
 management capability/experience
 competitive advantages abroad

9. Steps in the Export ProcessSteps in the Export Process
Evaluate export potential
Do country analysis (more later)
 country receptiveness to imports
and investment
 trade barriers/requirements
 infrastructure

10. Steps in the Export ProcessSteps in the Export Process
Evaluate export potential
Do market analysis
 market size/product potential
 distribution channels
 needs for re-engineering etc. =
localization

11. Steps in the Export ProcessSteps in the Export Process
Determine entry method
 goal of entry
 select distribution “partner”
 determine channel length
 assess risks
 determine costs

12. Steps in the Export ProcessSteps in the Export Process
Determine entry method
 determine trade terms
(INCOTERMS: ex works, FOB, CIF,
etc.)
 determine tasks to be performed in
the foreign market

13. Export/Import FinancingExport/Import Financing
Assures:
– Exporter of payment
– Importer of product
Banks offer financing intermediary service
– Letters of credit: bank guarantee of payment to
exporter “bought” by the corresponding importer
– Draft or bill of exchange: instructions to bank to pay
at a certain time based on certain documentation
Carriers provide to the exporter
– Bill of lading: receipt, contract and document of title

14. Sources of ExporterSources of Exporter
FinancingFinancing
Financing exporter credit to the importer:
- Bankers’ acceptance (of the draft)
- Factoring
- Forfaiting
- EXIM loans

15. Export/Import FinancingExport/Import Financing
 Letters of Credit (LOC)
– Bank guarantee on behalf of importer to exporter
assuring payment when exporter presents specified
documents
 Drafts (Bill of Exchange)
– Written order by exporter, telling an importer to pay a
specified amount of money at a specified time.
 Bill of Lading
– Issued to exporter, by carrier. Serves as receipt,
contract and document of title.
© McGraw Hill Companies, Inc., 2000

16. Exporters’ Problems withExporters’ Problems with
Letters of Credit (L/C)Letters of Credit (L/C)
 Shipment date or method required in L/C cannot
be met.
 Documents required by L/C cannot be obtained.
 Importer deliberately fills out L/C application
incorrectly (to stall or force a discount).
 Product description too detailed (exporter
compliance difficult).

17. Preference of the US ExporterPreference of the US Exporter
French Importer American Exporter
1. Importer Pays for Goods
2. Exporter Ships Goods After Being Paid

18. Preference of the FrenchPreference of the French
ImporterImporter
French Importer American Exporter
1. Exporter Ships the Goods
2. Importer pays after the Goods are Received

19. The Use of a Third PartyThe Use of a Third Party
French Importer American Exporter
1. Importer Obtains Bank’s Promise
to Pay on Importers Behalf
5. Bank Gives Merchandise
to Importer
Bank
6. Importer Pays Bank
3. Exporter Ships “to the Bank.”
Trusting Bank’s Promise to Pay
2. Bank Promises Exporter to
Pay on Behalf of Importer
4. Bank Pays Exporter

20. A Typical InternationalA Typical International
TransactionTransaction
French ImporterAmerican Exporter
Bank of New York Bank of Paris
6. Goods Shipped to France
7. Exporter
Presents
Draft to Bank
10 and 11
Exporter
Sells
Draft to
Bank 14. B of NY Presents Matured
Draft and Gets Payment
12. Bank Tells
Importer
Documents
Arrive
13. Importer
Pays Bank
2. Exporter Agrees to Fill Order
1. Importer Orders Goods 3. Importer
Arranges for
LOC
8. B of NY Presents Draft to Bank of
Paris
9. Bank of Paris Returns Accepted Draft
4. Bank of Paris Sends LOC to B of NY
5. B of NY
Informs
Exporter
of LOC

21. THANK YOUTHANK YOU