which is the more intense will usually produce the greater results. For example in the case of the automatic method of distribution so popular in the United States in connection with foreign trade, the risk will be small, but the returns from such a course will naturally be small. This method consists in sending abroad some catalogues, in placing advertisements in a few export publications, and awaiting results. On the other hand, if the manufacturer utilizes a larger number of methods of distribution-if in addition to local advertising and the issue of catalogues he will also send out salesmen, advertise in foreign newspapers, and use the other recognized means of promotion-he will obtain quicker, better, and more certain results. It will, however, require a far larger expenditure and involve a greater risk. Maximum efforts produce maximum results, always provided of course that the efforts carry with them the greatest efficiency both in conception and in execution, in direction as well as in dynamic energy. Ordinarily if there is no risk, there is little or no profit. Interest on investment is usually highest when the risk is the greatest, while the perfectly safe investment usually commands a low rate of interest. It is one of the maxims of political economy that a product when sent into a market must encounter the chances of the market, and the capital invested in the distribution of the product must likewise encounter the hazards incident to every commercial effort. In international commerce the hazards relating to distribution are greater than those in home trade, but the rewards are commensurate. Mistaken Methods of Distribution Much provincialism is still apparent among the manufacturers in America who attempt to enter foreign markets. Some of them imagine that once a concern has established itself firmly in the United States, foreign trade will come as a matter of course with little or no effort towards securing it. There are producers who go to the other extreme and assume that to secure one's share of international trade, they must overcome difficulties more imaginary than real. There are also those who think of foreign trade as a costly plaything, which only the richest can afford. Such notions result from failure to understand the principles of distribution. Sooner or later there comes a time in the life of every progressive nation when its commercial activities become focused on foreign trade. Only now has America reached that stage in its development. For us as for every nation foreign trade is beset with difficulties, but they are relatively no greater than those of any other commercial enterprise when the opportunities for profit are considered. Perhaps the most futile course is that of the man who sits behind his desk and waits for trade to come to him from across the seas without any appreciable effort on his part. While much of our early export trade came to us in this way, that day of easy profits is over for the time. At the present moment the foreign buyer does not need to solicit his source of supply. The pendulum may swing back to its former place but today it is the producer who must needs employ aggressive methods to satisfactorily market his goods. Acquaintance an Element in Distribution Acquaintance will always be a most important factor in determining the extent of distribution in foreign trade. Unfortunately the United States is still misunderstood in many countries. We have been the subject of much propaganda of which many of our own citizens, travelers abroad, and writers at home have been the unconscious agents. The attempts of foreign competitors in overseas markets to misrepresent us, our political policies, and our goods have been ably seconded by irresponsible newspaper and magazine correspondents; and also the careless talk of our own citizens has been quoted and misapplied for the benefit of our competitors' interests. The establishment of American banks abroad, especially in the newer markets, should go far to offset the handicap. The increasing tendency of the exporters to establish branch offices in foreign lands will be of great assistance in this direction. Only when American traders begin to settle in trade centers will the influence of their high regard for commercial honesty and business efficiency begin to be fully recognized. Doubtless the attitude of America in the great war and in the peace deliberations will do much toward clearing the air and defining our aims and aspirations so clearly that every man can read them. Practical idealism has its place in business as well as in politics and everything indicates that the American trader will be accepted at a higher value in the future than in the past. May he prove worthy of the increased confidence! CHAPTER IX THE BEST MARKETS FOR THE AMERICAN EXPORTER Trade Centers The exporter will frequently find himself confronted with a choice of several markets, each of which appears to offer equal advantages and possibilities but only one of which can be selected. The nature of his product will usually determine the field of his initial activities. Other things being equal, however, it will be well for him first to establish his connections with the world trade centers before he launches his campaign in any one country or locality. London London is pre-eminently the place where a world trader should locate first of all, if only for the purpose of using it as a laboratory in which to study international trade. Trade connections should be sought there before any other steps for obtaining foreign business are undertaken. The reason for this is that London has been and may soon again become the center of all international trade. From that center emanates a vast network of commercial activities which reaches every important trading port in the wide world. In London you may meet a merchant from Siberia and a banker from Australasia. You may sell goods there to the man in Calcutta or buy from a house located in Madagascar. That is why no exporter thinks himself of much distinction as an international trader until he can put on his stationery the significant words "London Office." Paris Of course, Paris is also a great world trading center, but it has more charm for the buyer than for the seller. Nevertheless, Paris ought always to be considered in connection with the idea of establishing headquarters or a branch house on the Continent. It is easy enough to decide upon the advantages of trade with most of the old European countries, and upon the nature and extent of one's connections in the effort to secure a share of European trade. This can be done in many cases even before a personal investigation on the ground is undertaken, because information concerning the opportunities and possibilities of the "old" markets of Europe as they were before the war, is pretty well known. This knowledge has been well systematized and is easily obtainable from sources which are generally reliable. "New" Markets The difficulty of choice becomes serious only when one contemplates entering directly upon trade with what may be called the "new" markets. By this phrase is meant either a market which has not yet begun to be exploited to its capacity, or one of those markets which are becoming important owing to their increased commercial activity. Of course, in years of actual age many of the so-called new markets are much older than even the ancient trade centers of London and Paris. The new markets which are particularly interesting the world today are in China, Russia, Latin America, and the newly formed European states. China China with its enormous population is as yet in a very unsettled condition. Moreover, the commercial demands of the population are few and limited. The giant is still asleep |