A disadvantage(s)of indirect exporting is/are that:
A)firms gain little experience from the transaction
B)commissions have to be paid to agents
C)firms are dependent on the agents
D)firms gain little experience from the transaction,commissions have to be paid to agents,and firms are dependent on the agents.
E)firms find it hard to set sales offices in foreign countries

Question

Quizplus · Accepted Answer

Indirect exporting involves a firm using an intermediary such as an agent or distributor to handle export activities. While this can be a beneficial way to enter foreign markets without a significant investment, it also has its disadvantages. Firms may not gain much experience in international trade since the intermediary handles most of the transaction. The firm also typically has to pay commissions to the agent, which can eat into profits. Additionally, the firm is dependent on the agent for market knowledge and sales. Therefore, the best choice is D, firms gain little experience from the transaction, commissions have to be paid to agents, and firms are dependent on the agents.

A Disadvantage(s)of Indirect Exporting Is/are That