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Merchandising



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EXPORT MERCHANDISING



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PUBLISHERS OF BOOKS F O R_/

Electrical World "^ Engineering News -Record
Power V Engineering and Mining Journal-Press
Chemical and Metallurgical Engineering
Electric Railway Journal v Coal Age
American Machinist ^ Ingenieria Intemacional
Electrical Merchandising "^ BusTransporration
Journal of Electricity and Western Industry
Industrial Engineer



My



EXPORT
MERCHANDISING



BY

WALTER F. WYMAN

sales and export manager, the carter's ink company; honorary
chairman, boston export ho0nd table; honorary president, export
managers club of new york; vice chairman, committee on foreign
trade, national association of credit men; committee on foreign
trade, national association of manufacturers; chairman, commit-
tee on educational exhibits, international trade conference;
committee on foreign trade, association op national advertisers,
incorporated; American committee on distribution and committee
ON reciprocity for commercial travellers, international chamber
OP commerce; author, direct exporting, utilizing time, henryville

8TORIES.



FiHST Edition



McGRAW-HILL BOOK COMPANY, Inc.
NEW YORK: 370 SEVENTH AVENUE

LONDON: 6 & 8 BOUVERIE ST., E. C. 4

1922



Copyright, 1922, by the
McGraw-Hill Book Company, Inc.



THE MAPLE PRESS - YORK PA



-5 5031

ACKNOWLEDGMENT

^ The author wish(>s to express to the export fraternity his
great indel)tedness to those who ]\y years of exeliange of infor-
mation and fact, preeept and prineiple, liave made this vohnne
p possflDle.
1^ Specific acknowledgment is (hie to the Boston Export Round
^ Table, the Export Managers Clul^ of New York, and the Bureau
^ of Foreign and Domestic Commerce for their investigations and
improvements in the field of export trade, from which many
♦ examples have been selected.
V The constant counsel of Henry H. Morse, Chairman of the
^ Boston Export Round Table, has been that of a collaborator
<** in the entire text, rather than that of a critic. Mr. Morse is all
but entirely responsible for the important description of methods
of pricing of goods for export and for certain paragraphs relating
to indirect exporting.

Professor Harry R. Tosdal of Harvard University has kindly
\ '' made many and valuable suggestions which have led to improve-
^ ments in the text itself and in the arrangement of the text.
Acknowledgment is also made to Professor Tosdal for his earlier
laying out of several chapters of this book.

Formal appreciation is here expressed of the courtesy of the
publishers of Advertising and Selling, American Academy of
Political and Social Science Quarterly, Business, Current Affairs,
Export American Industries, Export Trade, Leslie's, Modern
Methods, Printers' Ink, System, The World's Markets, The
World's Work, and of the Business Training Corporation for
permission to use material prepared for their pul)lications Ijy
the author.

Walttor F. Wyman.
Cambridge, Mass.
August, 1922.



FOREWORD

"No business man can judge the prospects of his industry without
taking world market and transportation conditions.into account, any
more than he can operate a river steam-boat without taking the
world-wide lunar tides into account." — Edward N. Hurley.

International commercial exchange affects the comfort,
convenience and net income of every man, woman and child in
the United States. For our comfort and convenience we must
import food stuffs and metals, rubber and textiles. Our incomes
are affected both by the prevailing costs of imported products
and materials and by direct and indirect taxation — which is
based upon exports as well as imports.

This volume describing the phases of Export Merchandising
has been prepared for the American manufacturing exporter
and for all others who participate in the exportation of American-
made merchandise. Its chapters have purposely been sequenced
for those with an academic as well as those with an immediate
business interest in the securing of profits from overseas sales.



IX






CONTENTS

Page

Acknowledgment vii

Foreword ix

CHAPTER I

Common Sense in Export Trade 1

The Justification of Exporting is Profit. Export Trtulo is Merely
Selling Goods in Markets New to the Merchandiser. Exporting is
no Longer "the Great Business Adventure." Organization and
Selling are the Common-sense Problems of Foreign Trade. No
Mystic Recipe Needed to Enjoy Foreign Profits. Export Trade is
Based on Common Sense.

CHAPTER II

Export Trade as Insurance 9

Export Trade is the Only National Insurance. Overseas Sales
Provide Safety Factor Against Periods of Domestic Depression.
In Panic Years at Home the Exporting Manufacturer Reaps
Greatest Reward. Exporting Protects the Individual Enterprise,
the Community and the Nation. Advantages Which Accrue to Ex-
porters in Their Domestic Fields.

CHAPTER III

Export Policies — Their Whys and Wherefores 12

Why Export Policies are Indispensable. Policies Must be Extab-
lished to Protect Rights. Efficiency Demands Establishment of
Policies. Success in Foreign Trade Depends upon Establishment
of Sound Policies. Policy of Executive Control. Methods of
Executive Control. Manufacturing Policy. What Products shall
be Exported. Price Policy. How to Price Merchandise for
Export. Sales Policy. Credit Policy Essential. Important
Points to be Considered in the Administration of Advertising
Policy.

CHAPTER IV

Organizing for Exporting 23

Vital Factors in Organizing. The AlUed Company. The Selling



xii CONTENTS

Page
Company. They Separate Export Department. Cooperation
between Departments. The E.xport Appropriation. Items of
Export Expense. The First Year in Exporting. A Typical First
Year's Export Appropriation. Later Appropriations. How to
Use an Experimental Appropriation Effectively. Personnel of
Typical Export Organizations.

CHAPTER V

The Export Department 40

The Importance of the Export Department. Division by Nature
of Sales. By Territories. By Types of Activities. Analysis of
Export Department of the Miller Rubber Company. Formula for
the Organization of the Small Export Department. European
Export Departments. System of Advancement in Europe and
the United States Contrasted. Examples of the Workings of the
Conference Export Department.

CHAPTER VI

The Location of the Export Department 47

Importance of Correct Location of Export Department now Ac-
cepted. List of Advantages of Seaboard Location. Admitted
Advantages of Export Headquarters at Factory. Examples of
Profit Arising from Seaboard Location. Use of Seaboard Location
in Abnormal Times. Personal Advantages of Export Manager
Located at Factory.

CHAPTER VII

The "Built-in" Export Department 56

Coordination of Departmental Effort the Backbone of the 'Built-in'
Export Department. Team play within an Enterprise Capitalized.
The 'Built-in' Export Department as an Integral Part of a Business.
A Trip Through Such a 'Department.' Examples of Departmental
Practice and Procedure. Conferences Under the 'Built-in' Idea.
Ten Years' Experience of The Carter's Ink Company.

CHAPTER VIII

The Export Manager 68

Placing the Responsibility for E.xport Initiative. Qualifications of
the Export Manager. Methods of Development. Transfer of a
Domestic Sales. Executive to E.xport Management. Detailed
Example of the Training of an Export Manager. What an Export
Manager Should Know. Example of Correct Use of Statistics.
Broadening Effects of Study of History of International Commer-
cial Exchange.



CONTENTS xiii



Pack

The Combination Export Manager 80

Definition of the Combination Export Manager. Types of Organi-
zation Employing Combination Export Managers. Differing
Methods of Compensation and Authority. Webb Act Combina-
tion Export Managers. True Nature of Relation with Manufac-
turer. Problems of Organization and Finance. The Three Prob-
lems to be Solved. Examples of Necessary Financing of Combina-
tion Organization. Combination Export Manager Must Combine
Qualifications Unneeded in Ordinary Export Managership. Ob-
stacles Which Must be Overcome. Building up a Clientele.
Organization Problems.

CHAPTER X

Securing and Training Export Salesmen 94

Definitions of a Salesman. The Salesman as the Most Powerful
Selling Force. As the Keystone of the Well-balanced Export
Campaign. Cost of Export Travelers. Modern Exporting
Demands More Salesmen. Qualifications of the Export Salesman.
Sales Ability of First Importance. Needs as Linguist Often
Secondary to Clerical Accuracy. Knowledge an Export Salesman
Should Have. Importance of Greatest Care in Selection of Export
Salesman. Invariable Courtesy a Requisite. Example of Intensive
Training of an Export Salesman.

CHAPTER XI

Preparing the Field for the Export Salesman 108

Fallacy of "Introductory Trip" Exploded. The Exporter Sales-
man Should Not be Permitted to be an Explorer or Discoverer.
System in Preparing Field for Salesman. Methods of Creating
Dealer and Consumer Acceptance Portrayed. Use of Mails in
Preparing Field for Personal Visit. Use of Advertising in Advance
of Salesman's Visits. How the Exporting Manufacturer can
Multiply Salesman's Efficiency.

CHAPTER XII

Preparing the Export Salesman FOR the Field 113

Equipment of the Export Traveler. Physical and Dental
Examination. Vaccination and Innoculation. Funds. Supplies.
Motion Picture Projector. Use of Typewriter. Call Sheets.
Preparation of Samples. Routing the Export Salesman.
Examples of Good and Bad Routing.



xiv CONTENTS

CHAPTER XIII

Page
Cooperation with the Export Salesman in the Field .... 131
Advantascs of Correct Supervision of Field Work. How to
Maintain Contact at a Distance. Registration of Salesman's
Cable Addresses Abroad. How to Secure Prompt Delivery
of Mail. Building Prestige for the Salesman. Detecting and
Correcting Weaknesses of Salesman While Overseas. Use of
Cables in Cooperating with Field Workers. Letters That Inspire
Salesmen io Best Efforts. Following up the Work of the Export
Salesman. European and American Methods Compared.
Reviewing the Field with the Export Salesman on His Return.
Ten Guide-posts for the Export Manager in Checking Field Work.
Dangers Inherent in Hard and Fast Rules. Rigid Policy in
Production Proved Costly. Example of Important Customer
Lost by Unwillingness to Modify Package. Emergency Measures
which Have Won Latin-American Merchants. Profitable By-
products of Meeting Wishes of Importers Abroad.

CHAPTER XIV

The Combination Export Salesman 140

Two Main Types. Use of Combination Salesmen Not a New Idea.
Assets of Combination Travelers. Why they Seek to Hold Control
of Their Customers. The Combination Salesman Resident
Abroad. How He Differs from Combinat on Traveler. Example
of Territories Covered and Methods Employed. Recent Develop-
ments in Combination Field. How to Create and Control Good
Combination Travelers. Sub-letting of Salesmen by Manu-
facturers. Method of Division of Salary and Expenses. Effec-
tiveness of Modern Combination Salesman Compared to One-line
Traveler.

CHAPTER XV

Developing Export Trade by Correspondence 147

The Place of the Written Word in Export Selling. Correspondence
Establishes the Reputation of an Enterprise. Every Letter is a
Sales Letter. The Construction of an Export Letter. Mass
Attack by Means of the Sales Letter. The Place of the Enclosure
in Letter Series. Diagnosis as the Predominant Factor in Export
Sales Correspondence. Letters That Build up Good Will.

CHAPTER XVI

How Advertising Gets Foreign Trade 163

Superiority of American Advertising Methods in Domestic Field.
Need of Greater Interest, by Americans, in Export Avertising.



CONTENTS XV

Page
Exjunplcs of Poor Advert isiiij;; and Unwise Delegation of Adver-
tising Authority. Twcnity Ways to Use Exjjort Advcu'tising.
Need of Definite Advertising Plan Behind Every Dollar Invested.
Costly Errors of American Export Advertisers. Advertising Used
to Secure Orders through Export Commission Houses. How an
Export Salesman Secured Needed Appropriations for Local Adver-
tising Publicity Method Used by European Maker. Export
Advertising Not a Matter of Freakishness. Fraudulent Advertis-
ing Schemes. Common Mistakes in Export Advertising.

CHAPTER XVII

Indirect Exporting 178

Channels of Indirect Exporting. Functions of the Export Mer-
chant. What is an Export Commission House? The Field of the
Manufacturers' Agent Resident Abroad. The Hybridization
Process. Overlapping Activities. Unjust Accusations Against
Export Commission Houses Refuted. Early History of American
Exporting. Distrust Gradually Vanishing. Peculiar Advantages
of Indirect Exporting. Why Veteran Manufacturing Exporters
Use Export Houses.

CHAPTER XVIII

The Export Commission House, the Importer Abroad, and the
American Manufacturer as Co-partners in International

Commercial Exchange 184

The Function of the Export Commission House. What the
Importer Abroad Can Expect from His Purchasing Agent. Tear-
ing Down Barriers That Obstruct Trade. Mutual Knowledge
Essential. The Export Commission House as a Builder of Ex{)ort
Sales. Examples of Proper Cooperation. The Correct Triangular
Relation. Ways in Which the Imjjorter Abroad Can Help. A
Sound Method of Handling Substitutions. Effect of War on
International Trade. Unsound Interposition of Artificial Obstacles.
Placing Responsibility for Error. Model Instructions from
Importers. How the Export Commission House Can Render
Greatest Service.

CHAPTER XIX

The Export Catalog as a Salesman 204

Function of the Export Catalog. Comparison of the Catalog and
the Personal Salesman. Cover Stock and Designs. Losses
through Inadequate Catalogs. Catalog Should Make it Easy to
Buy. The Catalog as a Correspondence Time-saver. Thorough-
ness and Balance Typical of European Export Catalogs. What a



xvi CONTENTS

Page

Catalog Should Contain. The Use of Action Photographs. The
Catalog as an Educator. As a Factor in Aiding Salesman in the
Field. Translation of the Export Catalog. Average Domestic
Catalog Not Translatable. Rules for Checking the Export Catalog.

CHAPTER XX

The Place of the House Organ in Export Selling 217

Function of the House Organ. Fundamentals of Editorial Policy.
How to Secure Reader Interest. Its Use in Creating Good-will.
First Steps in Preparation of Copy. Mailing Lists. Articles are
Appreciated by Importers Abroad. Contributions from Outside
the Enterprise. Features Which Insure the Preservation of Each
Issue by the Importer. Photographic Reproductions of Window
Displays as Illustrations. Method of Testing Reader Attention.
Examples of Successful and Unsuccessful Export House Magazines.

CHAPTER XXI

The Motion Picture in Export 227

Classification of the Motion Picture as a Selling Force. Field of
the Export Motion Picture Inside of the United States. Use of
Export Films by Domestic Commercial Organizations. Methods
of Use of the Traveling Film Outside the United States. Use of the
Portable Motion Picture Projector in Exporting. Branch Office
Equipment. The Export Commission House and the Motion
Picture. Uses Abroad of Portable Projector. Advantages of Use
by Agents. How the Motion Picture Helps the Export Salesman.
Obstacles in the Use of Motion Pictures Abroad. Use of the
Traveling Film in Motion Picture Houses Abroad. Educational
Use of the Export Motion Picture. Possibilities in Interesting
Large Consumers by Pictures.

CHAPTER XXII

Samples IN Export Selling 241

Fundamentals of Sampling. How Samples Can be Distributed.
European Use of Samples. Example of Loss through Poor
Packing of Samples. Visualization of a Salesman's Samples in Use.
Excellent Sample Displaj-s Described in Detail. The Exclusive
Agent and His Samples. Why Samples Increase Sales. Creating
Consumer Demand by Sampling. Examples of Sound Consumer
Sampling. How to Turn Consumer Inquiries into Dealer Orders.
The Psychology of Sampling Combined wath Advertising. Speci-
men Campaign Based upon Coupon Advertising. Rules Govern-
ing Profitable Distribution of Samples.



CONTENTS xvii

CHAPTER XXIII

Page

The Testimonial in Export Selling 258

The Important Place of the Testimonial in Overseas Sales. Eight
Distinct Uses of the Testimonial in Introducing Manufacturer to
Importers Abroad. References but Postponed Testimonials.
Testimonial Letters. Financial Statements. A Novel Use of
Testimonials in Connection with Fourteen Features in Execution
of Orders. Quality of Product Proved through Words of Users.
What Constitutes Quality? Difficult Selling Points Made Effec-
tive by Use of Evidence of Others. Use of Testimonial by
Automobile Manufacturers. Re-sale Profit Proved by Testimony
of Dealers. Examples of Skilled Uses of Testimonials on Non-
tangibles.

CHAPTER XXIV

Planning Export Sales on a Basis of Ten-year Development . . 270
Estimate of Number of Manufacturing Exporters in United States
and Per Cent with Adequate Overseas Representation. Inade-
quate Attention Given Exporting Proved Costly. Exporting is
Selling the Whole World. Balanced Export Sales Effort
Portrayed. Examples of Decade Schedule of Export Develop-
ments. Charting the World on a Ten-year Basis. The Twenty-
six Territorial Divisions Used as a Base by One Manufacturer.
Visualizing Export Conditions and Sales by Charts and Graphs.
Balanced World-wide Sales Cannot Result by Chance.

CHAPTER XXV

Planning an Export Sales Campaign 280

Classification of Exporting Manufacturers. Well-balanced Sales
the Ultimate Goal of Export Selling Effort. Selling Methods Used
in Export Trade. Examples of Methods by Which Export Orders
are Secured. Types of Export Sales Campaigns. Building up the
Sales Campaign. Grand Tactics and Strategics of Exporting.
Laying a World-wide Foundation for Export Sales. Examples of
Prestige and Good-will Introductory Campaigns. Methods
Employed in an Intensive Export Sales Campaign. Capitalizing
the Intensive Export Sales Campaign. Executive Supervision of
Intensive Campaigns. By-products of Export Sales Campaigns.

CHAPTER XXVI

Typical Export Sales Campaigns. 294

Causes of Failure in Export Selling. Distribution Must Go Hand
in Hand with Created Demand. Consideration of the Campaign
Plan as a Whole. Patented Pencil Campaign in Argentina.
Example of Unsuccessful Campaign with Paint Removers. Analj^-
sis of Appeal of Product an Important Factor. How Unsound



xviii CONTENTS

Pace
Competition Can be Checked. The Four Great Elements in an
Introductory. A Typically Good Campaign Described in Detail.
Three Absolute Essentials in Exporting. Faulty Export Organiza-
tion a Barrier to Successful Campaigns. Changing Losses to
Profits by Supplying Missing Ingredients in Export Recipes.

CHAPTER XXVII

How TO Construct AN Export Sales Campaign FOR A Specialty. . 308
Typical Specialty Campaign Abroad Given in Detail. Cost and
Results Compared. Year-by-year Expense and Sales Comparison
Made. How to Analyze, Classify and Use Selling Points. How
Advertising, Salesmen, Correspondence and Samples Can Be
Combined in a Single Campaign. Cooperation with Resident
Agent Portrayed.

CHAPTER XXVIII

The Exclusive Export Agent 319

Export Agents Classified. Types of Export Agents Resident in the
United States. Types of Agents Resident Abroad. Major
Divisions of Both Analyzed and Defined. Illustrations of the
Nature of the Relation Between American Manufacturers and
the Several Classes of Agents. Advantages and Disadvantages of
Agents Who Purchase for Re-sale. The American Selling Agency.
The Export Company as an Agent. The Export House as an
Agent. Classification of Agents Resident Abroad. The Basis
of Exclusive Representation. Hybrid Agencies and Their



Advantages.



CHAPTER XXIX



How, When and Where to Select and Cooperate with an

Exclusive Agent Resident Abroad 329

Unsound Basis for Agency Selection. Common-sense Methods of
Selection. Essential Qualifications of Exclusive Export Agent.
Importance of Credit Man in Agency Granting. O. T. Erickson's
Explanation of Credit Man's Function in Agency Selection.
Modern Tendencies in Types Approved. Advantages of Manu-
facturers' Representative Resident Abroad. Selling Companies
as Agents. Examples of Methods Used by Leading Exporting
Manufacturers in Securing Agents. Value of Supplementary
Evidence. Agents' Commissions Reduce Profits. Costliness of
Establishing Unsatisfactory Agencies. Fundamentals of Agency
Granting. Cooperation with the Exclusive Export Agent. Far
Eastern Agent's Examples of Good and Poor Coordination of
Effort. How to Increase Sales through Agents.



CONTENTS XIX

CIIAPTER XXX

The Export Exclusive Aoenoy Contuact 343

Function of Agency Contract. Importance of Exact Definitions
in Foreign Trade. Contracts Must be Equitable. Examples of
Wordings. Agency Contract as a Sales Document. Fifty
Factors to be Considered in an Agency Contract.

CHAPTER XXXI

Should the Export Manager Pass on Foreign Credits 34S

The Export Manager's Knowledge of Actual and Prospective Cus-
tomers. His Ability to Become a Grantor of Foreign Credits. His
Direct Interest in Net Profits. Possible Economy in Export
Manager's Control of Credit Function. Examples Proving
Assumption of Credit Duties Rob Export Manager of Time Needed
for Organizing and Selling. Capitalizing the Greater Experience
of the Credit Manager. Wisdom of Divorcing Credit and Sales
Functions.

CHAPTER XXXII

The Fundamentals of Foreign Credits 355

Why Should Credit be Extended Abroad? Illustration of the
Nature of Foreign Credits. The Function of Foreign Credits.
How Credits Increase Sales. The Time Element in Credits. The
Relation of Turn-over to Extension of Time. How Per Cent of
Profit Affects the Granting of Credits. Examples of Credit Grant-
ting. Reasons for Taking Cash Discounts. The Individual is
the Dominant Factor in Foreign Credit Granting. Credit is
Personal and Not National. The Three C's of Credit. Credit
Investigations before Solicitation of Orders. Sales Use of Credit
Data.

CHAPTER XXXIII

The Foreign Credit Man as a Merchandiser 367

The New Conception of the Foreign Credit Man's Sphere of Action.
Example of Unusual Financing. The Sales Angle in the Need of
Representation Factor of Credits. How a Credit Manager
Developed an Agent's Ability to Buy Largely. The Credit Man as
a Sales Prophet. Cooperation between Export, Sales and Credit
Departments.

CHAPTER XXXIV

Sources of Information on Foreign Credit Risks 371

Mercantile Agencies Used in Domestic Credits Have Foreign Trade



XX CONTENTS

Page

Departments. Nature of Reports Supplied by Mercantile
Agencies. Credit Bureaus of National Association of Manu-
facturers and Philadelphia Commercial Museum. Credit
Service Possible to Members of Export Organizations. The
American Manufacturers' Export Association. Boston Export
Round Table. Reports Supplied by Export Journals. Service
Bureaus of American Banks. Credit Agencies Abroad. Credit
Data Secured by Export Salesman and Agents. Value of Refer-
ences. Workings of Foreign Credit Interchange Bureau of
National Association of Credit Men. Details of Its Operation.
Exposition of Its Advantages. Credit Data Obtainable from
Trade Organizations and Private Sources.

CHAPTER XXXV

Elements of Foreign Collections 377

Principles Underlying Sound Foreign Collections. The Collection
Process Should be Educational. Many Delayed Collections
Due to American Ignorance of Mutual Advantages of Time Docu-
mentary Draft Procedure. Foreign Collection Letters Should be
Sales Letters. The Three Purposes of a Collection Letter. Use of
Clean Drafts in Collections. Problems Inherent in Collections
Based upon Failure to Pay Documentary Drafts at Maturity.
Reason for Non-payment Tremendously Important. Examples
of Collections in Connection with Documentary Drafts. Collec-
tion Arguments That Appeal to Foreign Buj'ers. Specimen
Collection Letters.

CHAPTER XXXVI

Fraudulent Export Schemes 384

Examples of Fraudulent Export Endeavor. The Black Band.
The False Reference Plan. Overseas Export Criminal Schemes.
Necessity for Investigation of Local Export Advertising Offers.
Fraudulent Export Directories. The Egyptian Sight Draft Fraud.
The Defense against Siinilar Schemes. Dangers in Selling at Low
Export Prices Without Control of Shipments. The Pernambuco
Triangle. The Pirate Ship. A Judicial Attitude and Common



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