Export Marketing

Risk analysis

The most important for our company is to be able to produce the fertilizer, deliver it to our end customers and receive the money for it.

The most likely risk is the risk if our products would get damaged during a shipment or be lost or be stolen on the way. The insurance is a necessary part if the production is transported especially on long distances. We could use the property insurance which would cover the value of the shipment. The same insurance can be applied to the risks such as truck transportation and warehousing. The risk appears when we will store our fertilizers in the warehouse so we will be responsible for the quality of our product. The risk of fire on the ship is also high.

We want our customers (agents) pay us in time. This might cause a problem for us if we do not: we need money to be able to pay for raw materials and etc. and the later our customers pay us-the later we will be able to pay to our suppliers. This can cause the increase of spending. To cover this risk, we can ask our customers for advance payment- which does not have to be a full price of total order- it can be some percentage. This will make Gubretas confident about getting the money in time- the risk will be less and the other party will be more committed to pay the rest of payments. Or we can ask them for a letter of credit-is when our customer makes an arrangement with the local bank in which bank essentially is promising that they will pay for their order.

We can also get a liability insurance to cover the risk of delivering late-if there will be any delays during the shipment or delays of getting the raw materials-this insurance would cover these situations.

Fertilizers are chemicals and when exporting them through the sea, the environmental issue must be considered as well. What if by some reason our fertilizers will end up in the sea- that could lead to a disaster. This will also be covered with a liability insurance.

Insurances are costly...