Direct or Indirect Exporting: A Guide to International Channels of Distribution 

Trade has always involved risk. From goods lost at sea to shipments plundered in transit, history reminds us of the challenges that come with moving products across borders. Today, exporters still face obstacles when entering foreign markets. 

In Food Export’s recent webinar, “Direct or Indirect Exporting: A Guide to International Channels of Distribution,” Export Education Coordinator Dennis Lynch—bringing over 40 years of experience in international trade—shared valuable insights to guide new suppliers toward the right distribution partners. 

Topics Dennis explored: 

• Modes of foreign market entry 

• The differences between direct vs. indirect exporting 

• What to look for in an importer or distributor 

 Watch the full recorded webinar for even more industry topics covered, here! 

Entering a Foreign Market 

For small- to medium-sized businesses, entering a foreign market can be a profitable direction, but it is not a decision to take lightly. Factors such as country conditions, product type, compliance requirements, and pricing all play a role. 

Exporting also comes with risks: financial considerations, management demands, and opportunity costs. For many businesses, indirect exporting offers an easier way to begin, especially when entering high-risk or lower-priority markets. Even modest foreign direct investment, such as hiring an overseas salesperson, can prove worthwhile. 

Indirect Exporting: The Pros and Cons 

By indirect exporting, suppliers sell their products through a middleman from their own country, and they take care of selling it overseas. 

Advantages: 

• Lower cost and faster market entry 

• No prior export experience required 

• Buyers assume risk and handle export documentation (health, free sale, phytosanitary, etc.) 

• Opportunity to build networks through domestic buyers 

Disadvantages: 

• Limited control over where and how products are sold 

• Building reliable networks is not guaranteed 

• Risks of diversion without strong contracts 

• Distribution delays may reduce shelf life and limit product control 

Direct Exporting: Greater Control and Involvement 

Direct exporting allows suppliers to retain more control by working directly with intermediaries. Partner companies should have strong industry contacts and be able to prove their legitimacy. 

This approach enables suppliers to: 

• Leverage their own expertise on products and markets 

• Stay actively involved in decision-making 

• Gain valuable knowledge of the export process 

A full-stocking distributor often makes the best partner, offering business development support, product services, and long-term relationship opportunities. 

Choosing the Right Importer or Distributor 

Selecting the right importer/distributor is as important as choosing the right business partner. The ideal importer should have: 

• A strong reputation with suppliers, customers, and banks 

• Experience selling similar but non-competing product lines 

• A well-established sales organization covering the target market 

• A proven record of sales growth, volume, and market share 

• After-sales service capabilities and warehousing facilities (if required)

Whether entering a market indirectly for speed and simplicity or directly for greater control, suppliers must carefully weigh their goals, resources, and risks. Through Food Export’s webinars and education program, a supplier can find the right importer or distributor which can make all the difference in building a successful export strategy. 

Choosing a country to export to isn’t a light decision. For a starting point, check Food Export’s Market and Country Profiles and book a consultation!