Phil Gary Enterprise USA: Press Release

Small Business News
Cleveland, Ohio
September 1994
-INTERNATIONAL TRADE-

Adding export middlemen can save time and reduce risk

By NANCY BYRON

Using a middleman typically means extra time and added expense. Not necessarily so in the exporting business.

Export intermediaries - companies that market and ship products overseas - can actually save small businesses time and trouble. And, in many cases, their fees are paid by the importing company.

Three primary types of export intermediaries are in the United States: export management companies, export trading companies and freight forwarders. Each offers a different degree of service, but their common goal is to make it easier for American companies to get their products into foreign countries.

Export management companies help manufacturers establish an overseas market for one or more of their products. Some act as an export department or agent for a company, working on a commission basis. Others buy the manufacturer's product domestically and resell it on the international market for a higher price to turn a profit. The second of these two methods eliminates much of the risk associated with international trade for the company producing the product, since their end of the transaction is completed domestically.

Phil Gary, owner of the Columbus-based export management company Phil Gary Enterprise USA, operates his business this way.

"Not only do I take title to the product and resell it, I pay for all the advertising and marketing," he says. "I'm like a distributor."

But because Gary assumes most of the risk in such a transaction, he carefully screens all products before deciding which to purchase and export. Currently, Gary exports just one product manufactured in the United States - a tire conditioner that can instantly seal a tread puncture up to one-inch deep. He says he has successfully marketed the sealant in about 15 countries, most of which are in the Pacific Rim.

"Every manufacturer in this country could be exporting a product worldwide if they knew how easy it is to do it," Gary says. "All they have to do is manufacture their product. It's a real awakening. You can take a company that is barely making it and put them into the big time if they have a good product."

Tradecom International, Inc., an export management company located in Cleveland takes on a wider range of products than Gary and markets them worldwide.