what is an export trading company 
an export trading company is an independent company that provides support services for firms engaged in exporting this may include warehousing shipping insuring and billing on behalf of the client additionally export trading companies may help manufacturers find overseas buyers and provide them with other pertinent market information a group of producers can also form their own etc understanding export trading companies etc the export company trading act of 1982 allows commercial banks to operate in the export trading company arena and own etcs 1 investors can learn more about etcs through the u s department of commerce s international trade administration export trading companies are not as prominent as they once were due to chinese conglomerate e commerce companies such as alibaba that allow business owners to dropship products directly from their supplier to the customer an export trading company can function like the export trading division of a company that doesn t have such a division helping the firm fulfill any legal obligations in order to clear the way for exporting its goods reasons to use an export trading companyan etc provides valuable information about the local laws and regulations in a foreign country for example an etc may inform a company about a country s local taxation and copyright laws etcs also have contacts in international markets such as relationships with manufacturers and distributors if a company is trying to enter a new overseas market an etc can facilitate communication between the parties although etcs charge a fee for their service it is often cheaper than training or recruiting staff in a foreign market etcs allow a company to hit the ground running and talk to individuals that already have the expertise to answer complex questions etcs also advise about currency hedging strategies to help minimize exchange rate risk for instance an etc may recommend that a company that earns a significant amount of its revenue in europe should use currency forwards and lock in an exchange rate for the purchase or sale of euros on a future date export trading companies charge the companies that hire them either a fee or a commission for the services that they provide limitations of using an export trading companya company may lose control of its operations if an etc handles critical functions such as logistics billing and communicating with foreign suppliers and manufacturers if key personnel at the etc resign or the etc goes into receivership the company that has hired their services may be unaware of the procedures and processes in place if an etc handles the marketing functions of a company operating in a foreign market the brand that the company is trying to convey may get distorted for example if an etc runs low quality print advertisements customers may associate the company s brand with cheap products 