Direct or indirect – how should a brand export

Direct or Indirect – How should a brand export?

When a company has taken that big decision about going to export it has two choices: Direct or indirect.

Here I am going to go over the differences between that.

The two companies that I have chosen to take as an example are Zara, which exports directly, and UGG, which exports indirectly.

Direct exporting means that the manufacturer takes care of exporting itself, while indirect exporting means that a company will get another party to sell it´s products.

Here below is a chart over what advantages and disadvantages each way holds for a company.

A company thinking about exporting has to go over these things and figure out what best suits them. Companies that export are more resilient and more likely to stay in business because they have more markets to rely on.

Zara has chosen direct export because that turned out to be a better option for them.

They are very big, all over the world, and with direct exporting they have been able to dominate the fast fashion industry. In that way they don´t have to spend time or money dealing with a middle man, but have to put a lot of trust in their buyers – that their product will sell well.

I do agree with them on their choice, they are big, international and make their money on being fast – so going direct was absolutely the best choice for their company.

UGG is a much smaller company that is not in the fast fashion industry. They have higher priced product and appeal to a different clientele, so they do not export nearly as much as Zara. Therefor they did, in my opinion, make the right decision for their company by choosing indirect export.

References: Chart 1 taken from: http://www.slideshare.net/NehaSuman2/distribution-strategies-29729665 Slide no. 4.

Chart 2 taken from: http://csb.uncw.edu/cbes/exportgateway/ Step 3.