Quiz #4 - 1 As a company grows in exporting sophistication...

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1. As a company grows in exporting sophistication, it should not become involved with an export trading company because: a. fixed costs are too high. b. variable costs are too high. c. it is a violation of international law. *d. customers abroad are customers of the export trading company, not the exporter. e. None of the above ~ Yes. Fixed and variable costs are not relevant to the exporter since the export trading company takes title to the product. The reference to international law is bogus. An export trading company can help the novice exporter, but as an exporter becomes more experienced and sophisticated it should want the direct contact with foreign customers it does not have through an export trading company. @ No. Fixed and variable costs are not relevant to the exporter since the export trading company takes title to the product. The reference to international law is bogus. An export trading company can help the novice exporter, but as an exporter becomes more experienced and sophisticated it should want the direct contact with foreign customers it does not have through an export trading company. REF: 4-2a 2. An export management company earns its revenue through: *a. sales commissions. b. receiving quantity discounts by buying in bulk and reselling products at a higher price. c. charging fixed fees to exporters. d. All of the above e. None of the above ~ Yes. An export management company is an agent, therefore it is paid by commission.
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Christopher Reinemann
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