Question

Which of the following is an example of indirect exporting?

1) A French company sells its products to a large retailer in France, who in turn sells the products all over Europe and Asia.
2) A French company sells its products directly to customers in France.
3) A French company sells its products to a large retailer in France, who in turn sells the products only in France.
4) A French company sells its products to a large retailer in France, who in turn sells the products only in Asia.

Answer 1

The correct example of indirect exporting is when a French company sells its products to a retailer in France, who then sells those products only in Asia.

Step-by-step explanation:

An example of indirect exporting is when a company sells its products to a middleman, who then sells them in a foreign country. The correct answer to the question of which situation represents indirect exporting is:

1. A French company sells its products to a large retailer in France, who in turn sells the products all over Europe and Asia.
2. A French company sells its products directly to customers in France.
3. A French company sells its products to a large retailer in France, who in turn sells the products only in France.
4. A French company sells its products to a large retailer in France, who in turn sells the products only in Asia.

The fourth option is the example of indirect exporting since the French company is relying on a retailer to sell its products overseas, specifically in Asia, thus not dealing with foreign markets directly.