The would be exporter is faced with a number of problems. First there is the need to find a customer for his goods. The actual operation of selling is made more difficult because of language barriers and cultural differences. There are also additional transport problems because of the greater distances involved and often unfamiliar territories. When the manufacturer turns from selling at home to selling overseas, his problems are magnified. This is particularly true in terms of finance.
The first financial problem facing the exporter is the time taken to deliver his goods. There could be a long delay while his merchandise is in transit between London and, say Karachi. He has incurred the cost of production, but when is he going to be paid? The second problem is even more serious. How sure can he be that he is going to be paid at all? And even when he receives payment his troubles may not be over. If he is paid for his goods in a currency other than sterling, he has to convert that currency into sterling, and what if the other currency has fallen in value since the contract was made? These are perennial problems for the exporter.
Fortunately for the exporters help is available from the banks. The most straightforward method of financing the operations is to borrow the necessary funds from his bank. This way he can ship his goods abroad and draw on his bank for the funds needed to carry on production while he is awaiting the proceeds. But of course the borrowings from the bank will lower his profit margins.
COMPREHENSION
Ex. 13. Put questions to the words and word-combinations in italics.
1. Exporting and importing of goods are the major sources of international revenue and
expenditure for most countries.
2. When exports exceed imports we say that the country has a favourable balance of payments.
3. Companies can either set up a local subsidiary or a joint venture with a local partner.
4. If there were no tariffs, customs boundaries, import and export embargoes, trade would then
flow freely throughout the world.
5. Sole agents or multi-distributors, who have a special knowledge of the market, can sell on
behalf of the company.
6. Governments can control international trade.
7. International business comprises many different types of services.
8. In the case of manufactured goods certain countries have become famous for particular
products.
Ex. 14. Match the beginnings of the sentences to their ends using the information from
