International Business – Advantages and Disadvantages to Using An Importer


There are several advantages to using an intermediary to import products from overseas:

They tend to know what they’re doing. In international business this is a huge help
They understand the exporting country’s language, culture and business practices.
Intermediaries know how deals are done and can avoid complications.
Intermediaries may do much business with factories you’re interested in. Hence, they may have larger buying power and receive better service.
They often offer one-stop shopping (freight, customs, arranging payment, perhaps even quality control).
They often have relationships with factories, so they can find suppliers with greater ease.
They should save you time.

However, there are many disadvantages to using an intermediary when importing:

They charge for this service. Often a buyer has no idea how much they’re paying this person. Trading companies may say they’re being paid by the seller (and that may be who writes the check), but in reality the buyer is putting all the cash into the deal.
The best intermediaries win global business will try to never reveal the true costs and terms.
Often, trading companies work with friends of theirs or other preferred suppliers who may reward them better than other suppliers. This means the buyer may not be getting the best deal.
Intermediaries try to keep the buyer and seller apart. Think of buying a house through brokers.The buyer and seller never develop a relationship.