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2. Forms of organization of international trade


When the company enters the foreign markets, it should determine the optimal form of organization for its marketing.
Possible solutions is to hire the services of intermediaries such as agents, commissioners, sell the goods through auctions or exchanges, use of direct sales through its own distribution network, establishment of branches, subsidiaries, joint ventures.
The final choice will depend on several factors: the type of market structure, the nature of the marketed product and the features of the enterprise.
Large companies have an opportunity to create their own foreign trade offices that serve institutional, transportation, advertising, analysis and other functions. Using in-house structure, it allows the company to keep in touch with the market, to carry out a flexible pricing policy and thus to affect the efficiency of foreign trade operations, but can be very expensive material and financial resources to service the areas of treatment.
During the scale of international trade and product differentiation, the role of trade and intermediary services increases.
To deal with intermediaries gives several advantages:
Exporting firms does not expend funds to establish its own distribution net-work;
Intermediaries finance these transactions on the basis of short-and medium- term lending;
Intermediaries open inaccessible markets to establish direct contacts;
-Activities of intermediaries enhances the effectiveness of foreign trade, which
is achieved by enhancing the efficiency of goods markets and the acceleration of capital turnover, savings on distribution costs, timely response to changing market conditions.
There are different kinds of trade and intermediary firms, and agreements. They differ on two main grounds: on whose behalf the transaction is at whose expense. In modern conditions the most common arrangements are as follows:
The agreement on granting the right to sell. When using this form is established for a long interaction of the exporter and an intermediary who purchases the product for its own account and sells it on its own behalf. This agreement gives certain advantages to the exporter, as the current guaranteed pre-agreed level of exports and the price level, freeing it from liability under contracts agent.
Commission agreement. It does not involve long-term sustainable relationship between the commission agent and exporter, consignor. Goods are handed over for implementation of the mediator, which acts in the market on its own behalf, but at the expense of the exporter. In international practice, it is commonly used to have consignment contract as a form of commission trade.
Consignment contract means the transfer of goods into the possession of the commission with the subsequent sale of its stock. Consignment most closely matches the promotion of technically complex products requiring a prior acquaintance with her, and after-sales service. To this end, the mediator-consignee creates the appropriate counseling and service centers. Exporter benefits from using this form of agreement are, firstly, the ability to control prices by setting them lower boundary, and secondly, in the presence guarantees a certain volume of exports, depending on the type of consignment.
When partially return consignment broker undertakes to buy at a solid account of the agreed number of unsold goods from the deadline. Completely nonrefundable consignment requires an intermediary to buy all unsold goods.
3. Agency agreement. This form of agreement provides for the execution of transactions an agent on behalf of and at the expense of the principal - the exporter. The agent assigned specific functions: The search for a buyer (broker function); rental sales and warehouse facilities; representation in transactions in international markets and auctions; transfer proposals for participation in the auction; preliminary agreement with a foreign counterpart conditions for future deals. Agent - an independent economic entity, it operates in the interests of the principal, but does not carry the commercial risk associated with third parties.
Each type of coordination allows exporting sides to gain certain advantages, but at the same time restricts communication with the market and often makes the realization of products depending on the activity of mediator.
The special markets have important place in the international trade - international exchanges, auctions and tenders. Trading operations in these markets are adversarial in nature and give an opportunity to sell the goods at the price of demand. The difference between these two markets are associated with features shown in these products (the degree of homogeneity, destination, etc.)
International Exchanges - a permanent wholesale market, covering the purchase and sale transaction on the same type of bulk commodities. International commodity exchanges mainly concentrated in the U.S., UK and Japan. They accounted for more than 90% of the international stock market turnover.
For the classification of commodity exchanges it can be used different criteria:
Depending on the type of commodities. For example, there are the London Metal Exchange, the New York Citrus Exchange, the New York Commercial Market for energy, etc..
The nomenclature of goods sold during exchange trading, stock exchanges are divided into universal, the leading trade on a wide range, and special exchange.
The nature of operations of the commodity exchanges allocate: real goods, futures, options, mixed. Least common in modern commerce is buying and selling physical goods, or transactions in real goods. Since the exchange is the implementation of similar goods standard batch (one batch is usually tied to the load carrying these goods transport) develops a prerequisite for the conversion of physical market at the market exchange contracts - futures and options.
At the stock exchange are carried out various kinds of transactions:
Deals with the real goods are classified in the transaction "Spot" with immediate delivery of the goods (this period of one to fifteen days), and transactions "forward" with the performance period within 2 to 4 weeks.
Futures contracts - mutual transfer of rights and duties in respect of standard contracts for the exchange of goods in the future.
Options transactions, the object of which is a right or obligation to buy or sell in the future, an agreed number of futures or cash contracts for a specified price within a specified time.
Exchanges are an important structural element of the global market due to their functions, chief among them - price determination for the future and ensure price transparency. Commodity prices - a kind of world prices. They serve as a guide when entering into OTC transactions on similar products. Another function - insurance against price fluctuations, hedging. And finally, the coordination of the actual supply and demand. It is achieved through futures and options contracts, purchased long before the completion of production of commodities, which allows adjustments in production programs.
Thus, the exchanges make international trade more predictable and allow to reduce overhead resources.
Another form of organization of international trade are auctions.
International commodity auctions - a specially arranged from time to time acting in certain places, markets, which are implemented by public auction goods.
The auction sale, as opposed to the exchange - is the sale of real goods to individual properties. An example of auction items may be antiques, furs, tobacco, tea, etc.
Auctioneers - a major commercial companies, often monopolize trade in certain goods. Typically, they buy goods from manufacturers at their own expense, dictating the purchase price and then resell them to wholesalers or middlemen to consumers, profiting from the price difference.
The auction includes sorting goods at parties (lots); issue of the catalog, and his dispatch to potential buyers of goods.
Technology of the auction may be different. Haggling at a public auction is held directly with buyers. Sold at public auction of art, furs. Closed auctions conduct specialized brokerage firms acting as intermediaries between buyers and sellers. Essential commodities at closed auctions are tea and tobacco.
The principle of the auction - the announcement of the starting price, which varies in the bidding process. In the so-called English auction bidding starts with the announcement of the minimum price set by the seller, to which buyers make allowances. The auction may be conducted with a decrease in price (Dutch auction), which was originally overestimated.
The auction can be conducted in absentia auction or "blind auction" when all the bidders place their bets at the same time, often in writing. Item sold as a person who had offered the highest bid. In this form (sealed-bid auction "blind") held its first auction of ALROSA on sale of especially large diamonds weighing 10.8 carats to 50 carats, was presented to all 71 lots.
For each auction the goods have developed their global centers of commerce auction. In Russia there is the fur auction in St. Petersburg, Rostov-on-Don and Pyatigorsk auctions for horses.
Along with the exchanges and auctions common form of international trade are tender. In the bidding process it is not a deal, but only determined by the future contractor. Auctions - this is a competition for providers of goods, whose properties are predefined. The contract is concluded after comparing all the offers and choose the most advantageous.
For bidding are tender committees, whose functions include the preparation of the contest, the announcement of tender and conditions of participation, analysis of bids to decide on the transfer order.
In international practice, it is applied to conduct both open and closed auctions. Open tendering allows any company to buy from the tender committee of the conditions of trading. Sealed tenders are conducted in the construction of complex industrial facilities or for special operations, low-skilled high-technology. In this case, to participate in the bidding companies are invited to meet certain requirements.
During the development of international trade the variety of forms increases. Along with the exchanges and auctions, the main task of which the realization of significant mass of commodities, there are more modest sales volume form. Their main function - to provide innovative products to potential buyers, informing them of new properties of the goods and producers. To this end,'s fairs and trade and industrial exhibitions. Between them are of direct trade transaction, so the main motive for producers participating in them is to increase sales and profits.
The largest international exhibition complex is located in Germany, Italy, France, USA. In Russia the state Chamber of Commerce, representing the country at the International Bureau of Exhibitions. But in Russia, the activities of the organization of trade fairs demands perfection.
Thus, when the company entering a foreign market, it needs to recognize the diversity of forms of international trade and focus on those forms, which can give the most benefits.
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Источник: В.А. Черненко. Международный бизнес. 2007

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