The Global Small Business Blog: export trading company

Friday, November 04, 2011

Expand Abroad, Locally: It's Called Selling to An Export Trading Company

Digital Vision/Thinkstock

Frank Lavin, the U.S. Commerce Department’s former undersecretary for international trade and also a former U.S. ambassador to Singapore says this:

“The smaller the company, the less practical it becomes to learn a new language, deal with new tax codes and currencies and to take a huge global risk.”

Laurel here: totally do not agree. Think of it this way:

"Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime." ~ Chinese Proverb

Laurel's version:

"So give a small business owner a local sale with a premium transaction fee attached and you allow them to increase their revenues for a day. Teach a small business owner how to export and you allow them to go global for a lifetime." ~ Laurel's export-related twist on Chinese Proverb

Lavin's solution? Export Now (his new company).

Here is how it works: American businesses mail their goods, on consignment, to Export Now’s U.S. facilities. From there, items are collected and shipped by sea to a warehouse in China. Once the merchandise arrives in China, business owners are free to begin advertising and selling their items on Tmall.com, an online marketplace similar to eBay.

Catch or cost?

There is an annual fee of $3,000, plus a 10 percent transaction fee on each sale. Ouch!

Anyone ever hear of the Export Trading Company Act (1982)?

The Export Trading Company Act (ETCA) was created by Congress to enable U.S. firms to collaborate with each other to reduce their exports costs, become more efficient at exporting, and, in turn, compete more effectively in the export market.

Another definition here.

Read the entire article about Lavin's new export trading company here.