Export Trading Company: A company that extends a number of its support services to the companies that either operating or want to enter into export business. These services include acting as third party in dealing, shipping, warehousing, they also help clients in finding out buyers in a foreign countries, billing and to provide insurance and marketing services. The Export Trading Company Act 1982 encouraged establishment of Export Trading Companies to provide support to small companies. The act focused on increasing American export business and to provide American products into the world market. Is the Act really benefiting small companies in export business? Some advantage Export Trading Companies provide to small companies are- 1. To provide expertise and domain knowledge to small companies which they lack. 2. For small companies it’s difficult to calculate the risk and difficulties involve in export business, Export Trading Companies provide counseling to them. 3. To provide financial support during production of goods and transaction. 4. To provide sales and marketing support.
There are some disadvantages related with Export Trading Companies like profit sharing and higher cost for buyer etc. but advantages are far greater than the disadvantages thereby its recommended to hire services of Export Trading Companies. It’s always better to operate with fewer margins and with external support than not to operate.
Outsourcing: sometimes it’s difficult for an organization to integrate all proceedings related to business. In absence of desired skills companies outsource part of its business process to other organization which is specialized in performing that task. This whole procedure is known as outsourcing. Outsourcing could be done in any field like – information technology, technical support, customer support, legal jobs, content development etc. America outsources huge number of jobs to other nations because availability of cheap labor in these countries and smaller capital investment. Outsourcing is beneficial for companies, stakeholders, investors and also for American consumers because they get the benefit of lower expenditures. Outsourcing helps in improving the economy of other countries which results in increased purchasing power of customers of that nation thereby increased consumptions of American products.
References
Hasan. (2008, September 16). Business journal. Retrieved October 15, 2011, from www.dirjournal.com: http://www.dirjournal.com/business-journal/how-outsourcing-affects-the-us-economy/
Hester, S. B. (n.d.). Questia. Retrieved October 15, 2011, from www.questia.com: http://www.questia.com/googleScholar.qst?docId=5001690403
