Global Exporting - Germany

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1. The product, country to export and the size of the market is $ terms. The product of choice to be marketed is an electric start component for outboard marine engines. The country of choice for export is Germany. The product is a fully assembled, self-contained unit that implements a universal fit on most outboard marine engines that run on battery power. The manufacturing cost is $50.00 per unit with a 50% markup for a total selling price of $100.00 each. The product is manufactured at a locally owned fabrication facility in Madison, Wisconsin. According to the latest trade statistics, Germany imported $299 million USD in outboard engines for marine propulsion during 2005. This figure represents an increase of 14.6% from the previous year. Of all the replacement components on an outboard engine, experience dictates the electric start is one of the most frequently needed and there is a market for this product. I plan to initiate letters of credit for sales transactions, in addition to cash in advance with new customers, or a combination of both. Of course, credit checks will be conducted on the companies seeking to purchase my product. I plan to contact the U.S. Embassy in Germany and request credit information, and also the freight forwarding company I intend to use for the transaction. A Letter of Credit is a binding document that guarantees payment to the seller for goods sold. It takes away the risk of nonpayment by the buyer. The seller presents the bank with the required shipping documents that essentially confirm the delivery of goods. The seller's bank works with the buyer's bank to make the actual cash transaction. A fee will be charged by both banks for this service especially since the importer/purchaser's bank has the risk. If anything goes wrong regarding documentation and the exporter has already been paid, the importer is not obligated to pay the bank. The cash in advance option appeals to me because the cash transaction is completed prior to shipment of the goods. No risk is undertaken by the seller; only by the purchaser. 2. The import levels for the product in the country of choice. General imports in Germany for the month of February, 2002 for electrical equipment, appliances, or components was $249,650 million USD, custom value basis. The the year ended 12/05, the total amount of imports was 625.

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