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Does indirect exporting make the least amount of money compared to the other market entry strategies?...

Does indirect exporting make the least amount of money compared to the other market entry strategies? Explain why please..

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Answer #1

Indirect export means export through intermediary. Here, firm does not contact with customers directly. Firms get money in domestic currency. Firm does not involve in export hustles and bustles. Hence, it saves times and increases efficiency of firm.

But firm does not know exact requirements of its customers clearly and precisely. Further, huge margin is siphoned off by the intermediaries. Firm can not grow its customers base significantly. Thus, profits margin of firm fall.

Intermediary may start supplying very close substitutes or identical products. It further reduce profits of firms.

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