What is the primary difference between direct exporting and indirect exporting?

The distinction between direct exporting and indirect exporting is fundamentally about how products reach foreign markets. The primary difference lies in the method of market engagement.

Direct exporting involves selling products or services directly to consumers or businesses in a foreign market without intermediary parties. This approach allows the exporting company to maintain more control over its sales process, branding, customer relationships, and pricing strategy. Companies that engage in direct exporting often invest in establishing their own distribution channels and marketing strategies tailored to the target market.

In contrast, indirect exporting utilizes intermediaries or third-party agents who handle the logistics of selling the product abroad. This approach often appeals to companies that may not have the resources or market knowledge to navigate foreign markets independently. Although indirect exporting can reduce risk and lower start-up costs, it usually results in less control over how the product is marketed and sold.

Understanding this core difference highlights why the option referencing direct exporting as a means of selling directly to the foreign market is correct. It emphasizes the company's direct interaction with customers in the foreign market, distinguishing it from methods requiring intermediaries.