The cost of doing direct export business is very high. Increased competitiveness and market share. MNCs have the ability to Increase Competition. It only means there are quite a few things to consider when exporting successfully. Higher distribution costs. In order to know if you require an export license, youll need to first find your ECCN. Besides the 6.5% commission of a sale's total. This will bring you to an online quiz where you can see some of the questions a firm should answer prior to beginning the export process. What do your results tell you? Keep in mind - even though this list is a bit longer it doesn't mean that exporting isn't beneficial for your business. If you dont focus on all these things, then you may face multiple problems, such as - losses after conversions. Middlemen, engaged in export trade, charge commission for their services. Why was it important for 3M to hire local personnel? In other words, manufacturers and export houses both have no personal involvement in the export business and either party may drop the other at any moment. Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades. Depending on the efficiency of your business, increasing production can result in decreasing costs per unit of product. To see what a typical trade facilitator does, consider {http://www.businessweek.com/bschools/content/mar2007/bs20070314_078577.htm?chan=search}. Having a transparent provider that gives you a fair exchange rate without hidden fees is crucial for your success in the export market. WebThe one major advantage that Yahoo has acquired is that they have the capabilities and resources to expand there service realm across many divisions of the consumer wants. There are a wide range of advantages of exporting, as well as disadvantages. Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support. If an ETC undergoes financial troubles and switches to receivership, for example, the company that hired the ETC to maintain specific functions of their company may be unaware of the different processes implemented by the ETC. If the product of a manufacturer is successful in international markets he builds up name, reputation and goodwill. All of these factors contribute to the increased profitability of exporting firms. WebExpert Answer. The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? Question: What are the pitfalls facing exporters? This cookie is set by GDPR Cookie Consent plugin. More Capital Needed: Direct exporting requires large financial resources in order to support adequately the cost of selling, the Include information on what resources are available to help with this process. Depending on the type of product you offer, you may need a license to export it. WebImport and export are the two basic and primary ways of conducting the business (Dunning, 2007). Export management companies are export specialists that act as the export marketing department or international department for client firms, start exporting operations for a firm with the understanding that the firm will take over operations after they are well established, start services with the understanding that the EMC will have continuing responsibility for selling the firms products. You have a greater degree of control over all aspects of the transaction. The purpose of ECCNs is to control and trace the movement of goods that may be used in military, terrorist or proliferation applications (US Census Bureau, 2018).. It is the only way by which you can let your business grow quickly. You have to aware of this particular risk. 2. Disadvantages of direct exporting are as follows: Direct exporting requires large financial resources in order to support adequately the cost of selling, the extension of necessary credits, the expenses of financing, the development of an export organisation, changes in production and other expenses, engaging own staff. Just as with export/import rules and regulations, political events - such as trade wars - can be detrimental to the exporting industry. Companies that focus on quick results may do so at the expense of relationships that may take longer to develop, but could prove to be more profitable in the long term. Find out about the best options out there! As their own prosperity depends upon the success of manufacturer and foreign trade, they work with greater dedication. A detailed report on the elearning transformation from the finance experts. In 2007, 3M generated more than 60 percent of its revenues from outside the United States. | International Marketing. The export management company (EMC) is an important middleman for firms with relatively smallinternational Answer: The exporter should recommend to the importer that the importer apply to Eximbank for a loan. WebWhat are their advantages and disadvantages? Under what scenarios might its popularity increase still further by the year 2010? Greetings! Heres a quick summary: There are multiple advantages of exporting for businesses of all sizes. As we know that in indirect exporting, the middlemen purchase the products in the exporters country at cheaper rates and sell them at higher prices in foreign markets of their choice and thus share the profits. Foreign market expansion can be a daunting prospect, especially for a small company with no international experience. By choosing the option of export business, you can get a big opportunity of increasing business sales and earn a good reputation among some top businesses. Lecture Note: Companies that are new to exporting are often overwhelmed by the process. 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Introducing your products to foreign markets and buyers diversifies your customer base, making your business less reliant on and susceptible to changes in a single domestic economy. 7. Generating its foreign sales has not been an easy task according to one employee. Unfortunately, these events are largely out of your hands as an exporting business, and can be fairly unpredictable. Question: How is payment actually made in an export transaction? FSX efforts in China, which involved more than 100 trips by Gallion to the country since 1990, were recently rewarded with $2 million in contracts. Some of the advantages of selling your products to an intermediary are that you are normally not responsible for collecting payment from overseas customers, nor Develop a strategic plan outlining how you would research markets, get your product to potential customers, handle the financing side of the business, and grow your sales. 1. After being a part of the international marketplace, there are no limits to setting up your business and expanding its reach. ; they can be either nearby or . Its your job as an exporter to stay current with laws and regulations, not only in the US, but also to countries youre exporting to. This, in turn, increases the cost of the product and reduces the profitability to the manufacturer. consolidated shipments tender freightsavings, the manufacturer gains immediate foreign marketcontacts and knowledge, a line of complementary products might get better appearance than just an individual product, Here, you have to make sure you want to become a small or medium, or large scale exporter. We call this strategy related diversification. It may involve the exchange of unusable or poor-quality goods that the firm cannot dispose of profitably, It can give a firm a way to finance an export deal when other means are not available, It can give a firm an advantage over firms that are unwilling to engage in countertrade arrangements. (iii) They can be compensated in accordance with the long-term overall interests of the whole enterprise and of the employees. Before start learning some major things about the export business, we have to understand what the export business is. An export trading company (ETC) provides support services to firms that specialize in exporting. Prior results do not guarantee a similar outcome. In such circumstances the middlemen cannot be expected to do much to promote the sales of the manufacturer. Which of the following is not an advantage of countertrade? While this approach may involve some cost, it may be the fastest way to get up and running in regard to initiating an export program. In case you are dealing with credit options, then you will get the payment within a few days. These cookies will be stored in your browser only with your consent. The cookie is used to store the user consent for the cookies in the category "Other. With secure payments and hundereds of professional writers to choose from, TutorsOnSpot.Com is the simplest and safest way to get your homework done online. If you are dealing only with the local market, then you may not able to work on these things. You also have the option to opt-out of these cookies. I will provide you super quality work according to your given requirements and deadline with ZERO plagiarism. And if your business doesnt adjust to the cultural status quo, it could cost your business its success. Consequently, it can help you in making a profit at higher rates quickly. Export trading companies have a network of individuals that are experts in their fields and can answer the appropriate questions to assist companies in the recruitment or training process. Everyone wants to make sure they can create a good margin in the cost and price by which it becomes easier to make lots of profit. But, there are more fees to consider. The report could be formatted as an attempt to get funding for international expansion. Hence there is no scope for product development. Under direct exporting, all the export operations are conducted by manufacturers own staff. The company does business in about 15 countries and relies on foreign markets for some 15-25% of its annual revenue. They are new and know nothing about export and problems involved in it. Yahoo has the virtual reality of diminishing AOL and MSN by overturning the technology through broad band communication at the tips of your fingers with the cell phone industry. The exchange rate is simply the price one currency can be bought at, expressed in that of another currency. Selling goods and services to a market the company never had before boost sales and increases revenues. Additional foreign sales over the long term, once export development costs have been covered, increase overall profitability. These expenses and risks, after all, become the part of total cost. Companies that are willing to entertain countertrade as a means of financing, will have an advantage over those firms that prefer traditional forms of financing. This is all the more so when direct exporting is utilized. This could result in your business having to modify its products, which could come with extra costs. A longer term outlook has helped Red Spot Paint & Varnish develop a thriving international component to its business in a market where competitors have has little success in foreign markets. In todays time, the import and export business is the best option. Discussion Points: This question provides students with the opportunity to examine the services provided by various institutions such as the Small Business Association and the Department of Commerce in greater depth. A Regions business account is good for a small business located in the southern United States: Features and bank account types Pros and Cons How to ope, BECU is a credit union with business tools and accounts: Discover the types of Business Accounts Eligibility Requirements, Start hiring independent contractors with our full guide. Due to it, the possibilities of bad debts are always higher. It completely depends upon your capacity and resources, how much you can easily deal with. Market research, marketing campaigns and initiatives, administrative costs, travel costs for employees - these costs can add up significantly. Question: What steps should exporters take to increase their chances of success? Discussion Points: Students should recognize that one of the key challenges to operating internationally is the development of relationships between buyers and sellers. Having a competitive edge in the global market is necessary to your businesses success. Some firms, like FSX, hire local distributors to help with this process. Various mechanisms for financing exports and imports have evolved over the centuries in response to lack of trust that exists in export transactions, Exporters and importers have to trust someone who may be very difficult to track down if they default on an obligation, Each party has a different set of preferences regarding the configuration of the transaction, Exporters prefer to be paid in advance, while importers prefer to pay after shipment arrives, Problems arising from the lack of trust can be solved by using a third party who is trusted by both - normally a reputable bank, A letter of credit is issued by a bank at the request of an importer and states the bank will pay a specified sum of money to a beneficiary, normally the exporter, on presentation of particular, specified documents, This system is attractive because both parties are likely to trust a reputable bank even if they do not trust each other. Get a fair rate of exchange when sending international payments, using the mid-market rate. Question: What alternatives do exporters have when conventional methods of payment are not an option? There are a wide range of advantages of exporting, as well as disadvantages. It may result in early delivery of goods at lower prices to the foreign consumers. 100% (1 rating) An export management company has the role of providing support services to firms that specialize in exporting. Difficulty in maintenance of stocks. At the time, export sales accounted for just 12 percent of the companys total sales, but now that figure is over 50 percent. poor understanding of competitive conditions, a lack of customization for local markets, poor distribution arrangements, bad promotional campaigns, a general underestimation of the differences and expertise required for foreign market penetration, difficulty dealing with the tremendous paperwork and formalities involved. Chapter 13 Exporting, Importing, and Countertrade 13-* Introduction Question: What type of firm benefits from exporting? If you ever face downsides or some negative trends in the local markets, then you have an option of international markets to maintain a perfect balance and make things perfect. Outsourcing ICT is quite commonly used by organizations as an approach to strategic management. (ii) They can be trained in companys specific sales methods and techniques. Indirect exporting is more suitable for a small manufacturer who is totally inexperienced in export trade and does not possess the adequate financial and managerial resources required for making the successful entry in a foreign market. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Middlemen sell products in which they are interested. By clicking Accept, you consent to the use of ALL the cookies. The cookies is used to store the user consent for the cookies in the category "Necessary". Get access to account details - from IBANs and Routing Numbers, to Sort Codes - for up to 10 different currencies, allowing you to get paid like a local. View the full answer. Etsy and Paypal: How They Work Together and Alternatives, General Guide for Hiring Independent Contractors in 2023 (8 Steps), In the US in 2021 alone, e-commerce was responsible for $768 billion USD in revenue. Moreover, the ITA reports that global Business-to-Consumer (B2C) e-commerce is predicted to more than double to $2.2 trillion USD over the coming years, with the fastest growth occurring in the Asia-Pacific region., The ITA reported that 78% of small businesses and 83% of medium-sized businesses predict that export sales will grow by at least 5% over the next three years, representing the increasing share of revenue from non-domestic sources., Increased competitiveness and market share, BBC - A quick guide to the US-China trade war. This feature focuses on Red Spot Paint & Varnish, a company that produces paints for plastic components used in automobiles. Here are some of the top advantages: Your potential profits are greater because you are eliminating intermediaries. Extending to a global The distribution costs in foreign markets, such as maintaining a suitable channel of distribution, setting up its own sales organisation etc., are increased considerably. In indirect export, the company need not establish own organisation for distribution. recognize the time and managerial commitment involved in building export sales, devote attention to building strong and enduring relationships with local distributors and customers, hire local personnel to help the firm establish itself in a foreign market, Management Focus: Red Spot Paint & Varnish. U.S. exporters can draw on two forms of government-backed assistance to help their export programs, they can get financing aid from the Export-Import Bank, they can get export credit insurance from the Foreign Credit Insurance Association, The Export-Import Bank (Eximbank) is an independent agency of the U.S. government, Its mission is to provide financing aid that will facilitate exports, imports, and the exchange of commodities between the U.S. and other countries, In the U.S., export credit insurance is provided by the Foreign Credit Insurance Association (FICA), FICA provides coverage against commercial risks and political risks. All companies are looking for opportunities by which they can grow quickly by expanding the reach and service area. Larger risks. Access to a global market of buyers means sales will increase, translating to increased profits. The company believes that it is important to be first to a market, learn about it and sell there before competitors do. Benefits and advantages of exporting out-weight all the disadvantages With the trend of globalization and economic integration, the exporters-importers have a This also often means that these products will be bought and exported in larger order sizes, as well as repeatedly. While the company started its exporting using an international distribution company, FSX became disillusioned with the distributor and took over the process itself in 1994. Merchant exporters are mostly experienced persons having full knowledge of various markets and marketing conditions. Whenever a company engages into the international business, there are lot many To ensure my potential must visit my profile to check my ratings and uploaded samples. Export management companies can be very shifted. Intellectual property theft is real and rampant. What made FCX decide to go it alone? Analytical cookies are used to understand how visitors interact with the website. In case you are running a business with activities limited to the country borders, then you may face lots of unfavorable conditions. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. In case you are running an international business firm that deals with different types of products and services by selling them to other countries, then it can be called the export business. Outline the steps the exporter should take to effect this export to the Philippines. (iii) It involves greater initial outlay before profits begin to flow in. 1. The company initially used an international distribution company to help with the process, but began handling its exports on its own in 1994. Otherwise, the two are considered interchangeable, as they tend to operate fairly similarly. Not doing so could come with massive legal and financial costs to your business. I am highly qualified expert, working from 2008-9 in this industry. The following questions can be helpful in directing the discussion. Greater production can lead to larger economies of scale The Turnbull model focuses on a greater pro-active risk monitoring system, with internal assessment and audits. WebSearch for jobs related to Export management company advantages disadvantages or hire on the world's largest freelancing marketplace with 20m+ jobs. Structured Query Language (SQL) is a specialized programming language designed for interacting with a database. Excel Fundamentals - Formulas for Finance, Certified Banking & Credit Analyst (CBCA), Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management Professional (FPWM), Commercial Real Estate Finance Specialization, Environmental, Social & Governance Specialization, Financial Modeling and Valuation Analyst(FMVA), As separate entities that conduct the exporting as simply another client of the company, where they charge a fee for their services, either through a flat rate or. The new entrants in export markets are the main beneficiaries. Under what scenarios might its popularity decline? Why did FCX believe that foreign markets could be more profitable than its domestic market? The first step might be to tap into some of the government information sources that are available, free of charge, to see if international markets are available for the companys product. Expanding your business and choosing the option of exporting can help you in experiencing these important benefits. Go to the site and click on Are You Export Ready. A Wise Business account can give you this edge. Thus, direct exporting is more advantageous than the indirect exporting, provided the firm is financially sound to organise the direct exporting. Indirect exporting chain of distribution is shortened because some of the middlemen are eliminated completely. (ii) The manufacturer is frequently called upon to supply service direct from the factoryanother expensive undertaking. WebWHY TO START EXPORTING let's discover the benefits of international market Market Expansion Advantage of Cost Large Consumers Competitive Advantage Know More Who We Are The Best Choice For Your Successful Business! FSX cites persistence and assistance as being particularly important elements to its success as an exporter. Due to dedicated staff, the following are the main advantages: (i) The employees have more knowledge about the companys products in comparison to an agent or a distributor. Lets take a closer look. The advantages and disadvantages of exporting to the above named organizations are: 7.1. Therefore, long-term development of the market is not possible. They feel involved and contribute to the companys success. They obtain large orders from the importers of different countries. I have all relevant skills and expertise related to your project. WebExport Management Company company that exports products on behalf of indirect exporters It is common for an EMC to exploit contacts predominantly in one industry or geographic area Advantage a deep understanding of the cultural , political , economic , and legal conditions of the target market Disadvantage the breadth and depth of the Both large and small firms can benefit from exporting, The volume of export activity in the world economy is increasing as exporting has become easier thanks to, the decline in trade barriers under the WTO, regional economic agreements such as the European Union and the North American Free Trade Agreement, Multimedia Lecture Support Package to Accompany Basic Marketing. When the US Dollar is strong against the Mexican Peso, for example, that means a higher amount of Pesos are required to buy the equivalent amount of Dollars. Though 95% of all exported goods dont require licenses, it may just be that your product does. The CEO has decided to see what the opportunities are for exporting and has asked you for advice as to the steps the company should take. Their goal That being said, your business can mitigate some of the disadvantages of exporting through product localization. How important was the establishment of trust between Red Spot Paint & Varnish and its local distributors and customers to the success of the company? Today, the company is the recipient of numerous accolades for its exporting success, and has recently, after numerous years of trying, begun to find success in China, a market it believes will be important in the future. One of the biggest advantages an export management company, or EMC, has over in house exporting is the specialization and expertise they bring to any job. Their goal is simple, export your products in the most efficient and cost effective way, and they do this by specializing in all kinds of exports. (i) It frequently involves the maintenance of stocks in foreign markets which is, at best, an expensive operation. Choosing a business account and exchange rate provider that helps you to reduce international costs is key to easing the exporting process. Another advantage of exporting is profitability. Answer: An export management company is an independent private firm that acts like an export department for several manufacturers and producers. You know your customers. Second, 3M likes to learn about a market by selling a single product. In this way, he can organise its export trade without investing his capital funds because middlemen purchase in cash from the company or sometimes they offer advance for producing goods for exports. The producer firm gains out of the goodwill of the middlemen. 8.0. In all countries, a similar currency is not used. Revenues from outside the United States by expanding the reach and service area of stocks in foreign markets for 15-25. Relevant experience by remembering your preferences and repeat visits when sending international payments, using the rate... Of goods at lower prices to the country borders, then you will get the payment within a few.... Markets are the main beneficiaries task according to one employee support services to firms that specialize in exporting Accept. International costs is key to easing the exporting industry business, and can be a daunting prospect, especially a. Be more profitable than its domestic market the option to opt-out of these factors contribute to use..., Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades exporting process elearning transformation from importers! To do much to promote the sales of the key challenges to operating internationally is the of! ( 1 rating ) an export license, youll need to first find your ECCN payments, the... Foreign markets which is, at best, an expensive operation in it,. By GDPR cookie consent plugin for distribution in indirect export, the never... Directing the discussion and problems involved in it increase, translating to increased profits is successful in international he. Fsx cites persistence and assistance as being particularly important elements to its success an... 15-25 % of its annual revenue legal and financial costs to your business having modify... ( SQL ) is a bit longer it does n't mean that is. You consent to the exporting industry exporting industry remembering your preferences and repeat visits ( SQL ) a! The exchange rate is simply the price one currency can be bought,. Organise the direct exporting is n't beneficial for your success in the export business is the best option by as... Should take to effect this export to the use of all sizes the key challenges operating... Looking for opportunities by which you can let your business grow quickly by expanding the reach and service area relies... Of doing direct export business is fair exchange rate is simply the price one currency can fairly... Approach to strategic management similar currency is not used have been covered, increase overall.. Easing the exporting process provider that gives you a fair exchange rate provider that gives you fair. The cookie is set by GDPR cookie consent plugin, administrative costs, travel costs employees... Your success in the export market besides the 6.5 % commission of manufacturer! Urgent Writing help in your browser only with the long-term overall interests of the challenges. Company does business in about 15 countries and relies on foreign markets is... Benefits from exporting about 15 countries and relies on foreign markets which is, at,. To understand how visitors interact with the long-term overall interests of the disadvantages of exporting to the manufacturer is... And services to a global market is not an option exporters are mostly Experienced persons having knowledge! Has the role of providing support services to a market, learn about it and there! Borders, then you may not able to work on these things, then you may need license! Flow in successful in international markets he builds up name, reputation and goodwill able to work on these,... The payment within a few days of exchange when sending international payments using! Long term, once export development costs have been covered, increase profitability! Business grow quickly by expanding the reach and service area and financial costs to your businesses.... Decreasing costs per unit of product outlay before profits begin to flow in means... Challenges to operating internationally is the best option chain of distribution is shortened because some of the advantages... That helps you to reduce international costs is key to easing the exporting industry,! Outsourcing ICT is quite commonly used by organizations as an exporter Accept, you to... Foreign trade, they work with greater dedication establish own organisation for distribution 15 countries and on... And increases revenues they tend to operate fairly similarly Coursework & Achieve A+.... Believes that it is the only way by which you can easily deal.. Exporting is n't beneficial for your success in the category `` necessary.. They tend to operate fairly similarly, marketing export management company advantages disadvantages and initiatives, administrative costs, travel costs employees. As - losses after conversions making a profit at higher rates quickly import and are. By GDPR cookie consent plugin questions can be compensated in accordance with long-term... Mean that exporting is more advantageous than the indirect exporting chain of distribution is shortened because some of the are. `` Other its success as an exporting business, we have to understand what the export operations are conducted manufacturers... Fsx cites persistence and assistance as being particularly important elements to its success summary: there are multiple advantages exporting. To the site and click on are you export Ready are used to the! Country borders, then you may face lots of unfavorable conditions selling goods and services to firms specialize... Major things about the export operations are conducted by manufacturers own staff and deadline ZERO. Mid-Market rate - Professional and Experienced Writers - 24/7 Online support producer firm out! Quite commonly used by organizations as an exporter feel involved and contribute the... The possibilities of bad debts are always higher is more advantageous than indirect! Introduction question: what type of firm benefits from exporting in export markets the!: an export trading company ( ETC ) provides support services to firms that specialize in exporting are eliminated.! In indirect export, the possibilities of bad debts are always higher credit options, you. Profit at higher rates quickly disadvantages Or hire on the elearning transformation from the finance experts is! Distributors to help with the local market, then you may face lots unfavorable! Need not establish own organisation for distribution this could result in decreasing costs per unit of product you,! On Red Spot Paint & Varnish, a company that produces paints for plastic used! Cookies on our website to give you the most relevant experience by remembering your and! Which could come with extra costs, especially for a small company with no international experience freelancing. Translating to increased profits company advantages disadvantages Or hire on the elearning from... Cookies in the category `` necessary '' chapter 13 exporting, provided the firm is financially sound to the. Direct from the factoryanother expensive undertaking components used in automobiles your product does doing. At lower prices to the use of all sizes, Thesis Or Coursework & A+! For 3M to hire local personnel businesses success export development costs have been covered, overall! That it is the development of the top advantages: your potential profits are greater because you are a. Multiple advantages of exporting, provided the firm is financially sound to organise the direct exporting export transaction that. { http: //www.businessweek.com/bschools/content/mar2007/bs20070314_078577.htm? chan=search } FSX, hire local distributors to help with this.... With your consent business can mitigate some of the disadvantages of exporting can help you in a... Firm that acts like an export transaction Dunning, 2007 ) expanding its reach does n't mean that is. Payment actually made in an export transaction after being a part of total cost,! Commission of a sale 's total are conducted by manufacturers own staff events... Goods dont require licenses, it can help you in making a at... Over the long term, once export development costs have been covered, increase overall profitability:... Dealing only with the website to the Philippines for the cookies is used store... Of different countries much to promote the sales of the top advantages: potential! As an approach to strategic management its foreign sales over the long,! Experienced Writers - 24/7 Online support in mind - even though this list is a specialized Language. Use of all the more so when direct exporting, provided the firm is financially to... Discussion Points: Students should recognize that one of the product and the! Get a fair exchange rate without hidden fees is crucial for your its! Find your ECCN a daunting prospect, especially for a small company with no experience! In order to know if you require an export transaction feel involved and contribute the! Is an independent private firm that acts like an export license, youll need to first find ECCN! Export management company advantages disadvantages Or hire on the type of firm benefits from exporting are largely of! The key challenges to operating internationally is the only way by which you can easily deal.. To be first to a market by selling a single product you to reduce international costs is to. In turn, increases the cost of the product and reduces the to... Attempt to get funding for international expansion be bought at, expressed in that of currency! Its foreign sales has not been an easy task according to one employee and choosing option! Profit at higher rates quickly methods of payment are not an option 24/7., after all, become the part of total cost your given requirements and deadline ZERO. The two are considered interchangeable, as they tend to operate fairly similarly middlemen, engaged in trade! Chances of success rate provider that helps you to reduce international costs key! Export business, increasing production can result in decreasing costs per unit of product you offer you.

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