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Direct exporting vs indirect exporting: What is best for your business?
Learn about the difference between direct and indirect exporting, including advantages and disadvantages of each method, and what to choose when exporting.
As more Indian businesses tap into international opportunities, choosing the right export strategy becomes critical. The two most common methods — direct exporting and indirect exporting — each come with their own set of benefits, costs, and risks. Whether you’re an experienced exporter or just starting out, understanding the difference can shape your global success.
This blog outlines what each exporting model entails, their pros and cons, and the ideal scenarios in which Indian businesses might choose one over the other.
This blog outlines what each exporting model entails, their pros and cons, and the ideal scenarios in which Indian businesses might choose one over the other.
What is direct exporting?
Direct exporting refers to selling products directly to a foreign customer or distributor — for instance, in India, local businesses sell their products directly to customers or distributors in other countries. There are several ways that businesses can engage in direct exporting, such as through website, participation in trade shows and other marketing events, and direct contact with importers.
Advantages of direct exporting
Here are the primary benefits of choosing direct export:
● Greater control over operations: Exporters can directly manage branding, marketing, and pricing, leading to stronger customer relationships.
● Higher profit margins: By eliminating intermediaries, exporters can capture full revenue from international sales.
● Direct customer feedback: Businesses receive first-hand information from buyers, enabling better product development and customization.1
Disadvantages of direct exporting
Despite its benefits, direct exporting comes with some challenges too:
● Higher upfront costs: Setting up international logistics, warehousing, or a local office can be expensive for small businesses.
● Complex compliance and legalities: Navigating foreign regulations, documentation, and tax rules can be overwhelming without professional help.
● Demanding resource allocation: Managing exports directly requires dedicated teams and time, which can strain core operations.
● Market knowledge requirement: Acquiring in-depth knowledge of the foreign market, including cultural nuances, consumer preferences, legal regulations, and competitive landscape, can be time consuming and difficult.2
When should you choose direct exporting?
Choosing direct export is a strategic decision that should align with a company's resources, capabilities, and long-term international goals. As an Indian business, you might find this approach suitable under specific circumstances, such as:
● Sufficient resources: If your company possesses adequate financial resources, human capital with export expertise, and management capacity to handle international trade directly.
● Desire for high control: If your business prioritizes maintaining strong control over its brand, marketing, distribution, and customer relationships in the foreign market. This is often crucial for companies with unique or high-value products.
● Long-term market commitment: As an exporter, if you are committed to developing a long-term presence and building sustainable relationships in the target market, rather than seeking short-term sales.
● Niche or specialized products: If you are exporting products that are highly specialized, require significant technical support, or cater to a niche market, you could benefit from direct exporting.
● Potential for high sales volume: If the target market offers significant sales potential, the higher profit margins from direct exporting can justify the increased investment and effort.
● Access to market information: If your company has the means to gather market intelligence and understands the cultural, legal, and economic environment of the target country.3
What is indirect exporting?
Indirect exporting refers to selling products to a domestic company that resells those products in foreign markets. This approach involves working with a domestic intermediary, such as a distributor or trading company, to reach international markets. Indirect exports are often a good option for businesses that are just starting to enter the international market, as it allows them to develop expertise and establish a network. This method is similar to a drop shipping business.
Advantages of indirect exporting
Here are the key benefits of indirect exporting:
● Low entry barriers: No need to develop in-depth knowledge of foreign regulations or build export infrastructure.
● Reduced financial risk: Intermediaries handle much of the risk associated with logistics, payments, and documentation.
● Focus on domestic operations: Businesses can concentrate on production while the intermediary manages export logistics.4
Disadvantages of indirect exporting
However, there are limitations to indirect exporting:
● Limited market control: Businesses cannot directly influence pricing, branding, or customer engagement.
● Lower profit margins: Intermediaries take a share of revenue, reducing overall profits.
● Dependency on third parties: Export success relies heavily on the intermediary’s performance and reliability.
When should you choose indirect exporting?
Indirect export can be a practical choice for many Indian enterprises looking to initiate their global sales journey under certain conditions:
● Limited resources: If your company has constrained financial, human, or managerial resources to dedicate to direct exporting efforts.
● New to exporting: Businesses with little to no prior experience in international trade can use indirect exporting as a low-risk way to enter foreign markets.
● Small volume of exports: If the expected export sales volume is relatively small, the cost and effort of direct exporting may not be justifiable.
● Small volume of exports: If the expected export sales volume is relatively small, the cost and effort of direct exporting may not be justifiable.
● High-risk markets: When venturing into markets perceived as high-risk due to political instability, economic uncertainty, or complex regulations, using an experienced intermediary can mitigate potential losses.
● Need for quick market access: If speed to market is critical and the company lacks an established international network, an intermediary can provide faster access.6
Direct exporting vs indirect exporting: Know the difference
Criteria
Direct exporting
Indirect exporting
Control over process
Full control over sales, branding, pricing
Limited control; intermediary decides key elements
Initial investment
High (infrastructure, compliance)
Low (managed by third-party)
Market knowledge
Required
Not mandatory
Customer interaction
Direct
No direct interaction
Profit margin
Higher (no intermediary fees)
Lower (commission paid)
Risk exposure
High
Low7
Amazon Global Selling: Easy e-commerce exports and hassle-free shipping
If you are a business owner and you want to sell your products to the world, Amazon Global Selling enables you to list and sell ‘Made in India’ products on 18 Amazon global marketplaces. As an e-commerce export program, Amazon Global Selling provides support and guidance at every step of your export journey, connecting you to Amazon’s Service Provider Network for tailored compliance, payments, and logistics support.
Registered sellers can choose to ship their products by themselves through Merchant Fulfilled Network (MFN) or they can opt for Fulfillment by Amazon (FBA) and outsource order fulfillment to Amazon including packing, storage, delivery, and returns. Amazon Global Selling simplifies the process of international shipping to the world, helping businesses navigate customs and reach a vast audience.
Registered sellers can choose to ship their products by themselves through Merchant Fulfilled Network (MFN) or they can opt for Fulfillment by Amazon (FBA) and outsource order fulfillment to Amazon including packing, storage, delivery, and returns. Amazon Global Selling simplifies the process of international shipping to the world, helping businesses navigate customs and reach a vast audience.
Frequently Asked Questions
1. Is indirect exporting cheap?
Indirect exporting can often be less expensive than direct exporting as it eliminates the need for a business to set up its sales and distribution infrastructure in foreign markets. The domestic intermediary typically handles these tasks and takes a commission or fee for its services.
2. Is direct exporting low risk?
Direct exporting can be a low-risk option for businesses that are experienced in international trade and have the necessary expertise and resources to handle the complexities of the export process. In these cases, direct exporting allows a business to control sales and earn more profits.
3. Which method is the best for an exporter: direct or indirect?
There is no one-size-fits-all answer to this as the best method for an exporter depends on several factors. Some of the key considerations are:
● Nature of the product
● Company’s experience and resources
● Company’s goals
● Market conditions
● Nature of the product
● Company’s experience and resources
● Company’s goals
● Market conditions
Published on December 30, 2022.
Updated on August 05, 2025
Sources:
1. https://www.shiprocket.in/blog/direct-vs-indirect-export/
2. https://axolt.com/direct-exporting-advantages-and-disadvantages/
3. https://www.shiprocket.in/blog/direct-vs-indirect-export/#When_to_choose_direct_exporting
4. https://www.dgftguru.com/direct-vs-indirect-exporting-which-option-is-perfect-for-your-business/
5. https://www.shiprocket.in/blog/direct-vs-indirect-export/#Disadvantages_of_Indirect_Exporting
6. https://www.eximity.in/blog/direct-and-indirect-export/
7. https://www.dgftguru.com/direct-vs-indirect-exporting-which-option-is-perfect-for-your-business/
Updated on August 05, 2025
Sources:
1. https://www.shiprocket.in/blog/direct-vs-indirect-export/
2. https://axolt.com/direct-exporting-advantages-and-disadvantages/
3. https://www.shiprocket.in/blog/direct-vs-indirect-export/#When_to_choose_direct_exporting
4. https://www.dgftguru.com/direct-vs-indirect-exporting-which-option-is-perfect-for-your-business/
5. https://www.shiprocket.in/blog/direct-vs-indirect-export/#Disadvantages_of_Indirect_Exporting
6. https://www.eximity.in/blog/direct-and-indirect-export/
7. https://www.dgftguru.com/direct-vs-indirect-exporting-which-option-is-perfect-for-your-business/
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