Direct export refers to the sale in the foreign market by the manufacturer. Instead of using an export agent or export merchant, the manufacture makes the sale directly tot eh foreign buyers. The export is direct, as the manufacture does not use any independent middlemen in the channel between the home country and the overseas market. Due to the complexity of trade regulations, customs documentation, insurance requirement and worldwide transportation alternatives, people with special training and experience are necessary to handle these talks. Also the current or expected volume must be sufficient to support the in-house staff.

The factors in favour of selling directly are:

i.    Control: The exporting company will have direct control over the marketing operations and, therefore, can device and implement the proper marketing strategy in tune with the changing marketing conditions.

ii.    Customer Satisfaction: Buyers of highly specialized equipments prefer to deal directly with the manufacturers as they expect to be completely assured fo there service and backup system. Distributors may not have highly qualified technical people on their pay-roll for conducting sales negotiation for such equipment.

iii.    Profit: By selling directly the exporting company can save the commission that becomes payable to the agent. If the volume of sale sin fairly high, it may become a more economical to establish its won sales office than paying commission calculated on a percentage basis of sales turnover.

Other advantages in direct selling are active market exploitation since the manufacturer is more directly committed to its foreign markets. Another advantage s greater control. The cannel improves communication because approval does not have to be given to a middleman before a transaction is competed.

Direct selling has some limitations. It is a difficult channel to manage if the manufacturer is unfamiliar with the foreign market. Moreover, the channel is time consuming and expensive. Without a large volume of business, the manufacturer may find it too costly to maintain the channel.

A number of organizational arrangements are available to a company for carrying on direct exporting. These are:

i.    The export business may be conducted by a domestic export department or division.

ii.    The company may establish overseas sales braches or subsidiaries in addition to domestic marketing department. As a part of overseas sales branch the company may also establish storage or warehousing facilities.

iii.    A company may employ traveling salesmen for the overseas market. These traveling salesmen may be home based or may be attached tot eh foreign branches or subsidiaries.

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