Functions especially for the benefit of SMEs:
- Marketing: Making the product of the manufacturer marketable heeding the idiosyncrasies of the country you are selling to i.e. packing, labelling, etc. (especially overseas)
- Logistics: The paper work both export- and import-wise is substantial. In developing countries the red tape can be quite complex. Obtaining all necessary permits and licences are intricate formalities, so is the matter of pre-shipment inspection.
- Transport: Handling inbound and outbound shipping is a science on its own. FOB/CIF calculations vary from port to port. For short hauls the choice of allotment to rail, road and inland waterways is equally important.
- Finance: Both in import and export business from and to overseas countries financial engineering matters a great deal. SMEs generally do not have the means to finance the process of manufacturing and/or distribution that stretches over several months.
- Human Resources: A few years ago a book written by McCormack with the title "What you have not been taught at Harvard Business School" makes the point: not only is it important to speak the language of the client but still better to comprehend his mentality thus being able to blend into the regional customs and requirements.
This will show that the small or medium size manufacturer or industrialist who has to concentrate on the production of his goods cannot afford the time consuming formalities connected with overseas trade and its financial implications. The ITHs are there to provide for efficient assistance.
Of course, the important question is how to select the appropriate trading house because there are many kinds of ITHs. The important ones fall into two categories: they either specialise geographically or product wise:
1. Established settlements
- Active in various regions of the Globe
- Knowledge in multitude of markets
2. ITH product specialist
- Skilled staff in activity fields such as machinery, capital and consumer goods, IT hard and software, etc.