Distinguish between Direct Exporting and Indirect Exporting.

Direct exporting refers to the sale in the foreign market by the manufacturer himself. A manufacturer does not use any middlemen in the channel between the home country and overseas market. Following figure shows direct exporting channels.

Indirect exporting refers to the transfer of the selling responsibility to other organization by the manufacturer. In indirect exporting, the manufacturer utilizes the services of various types of independent marketing middlemen. Thus, a manufacturer is not required to work very hard and foreign sales are handled in the same way as the domestic sales.

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The difference between direct and indirect exporting is that in the direct exporting the manufacturer performs the export task rather than delegating it to others. The tasks of market contact, market research, physical distribution, expert documentation, pricing, etc. fall on the manufacturer. Direct exporting usually results in more sales than indirect exporting.

The choice between indirect-exporting and direct exporting is an analogous to the choice between selling through a manufacturer’s representative or through the firm’s own sales force in domestic marketing. A firm may export directly to large markets but export indirectly to small markets.