Exporters have four options for placing their products on the Brazilian market, depending on their business interests and local demand.
Under this approach, exporters negotiate directly with importers in Brazil, whether individuals or companies. This modality tends to require more time and greater financial resources from exporters.
Direct export involves detailed market research to identify potential buyers and continuous telephone contacts and email correspondence. Often, exporters must travel to Brazil to negotiate directly with buyers.
Similarly, Brazilian importers prefer direct contact with suppliers, to the extent the exchanges foster trust and allow for immediate and direct decision making. The modality also makes it easier to clarify technical questions regarding a given product.
The primary benefit involves the opportunity to negotiate more favorable financial terms and conditions through the elimination of intermediaries.
Under this modality, rather than dealing directly with the companies to which the respective products are to be supplied, exporters work through brokers. In Brazil, brokerage services are divided into two types of organizations: trading companies and commercial importers.
For small-scale enterprises, introducing their products through brokers is often the best strategy, given the extensive knowledge brokerage firms have of the domestic market and their close ties with potential buyers. Both of these advantages serve to facilitate product advertising in target markets. As a consequence, market research and transaction costs are reduced, as brokers handle the related business and customs procedures to ensure the entry of the imported goods into Brazil.
Trading companies are centered more on large import orders. As such, in general exporters must work with large product volumes for immediate or scheduled shipment.
Further, these companies usually maintain nationwide operations. Brazil law mandates that trading companies obtain special licenses and that they be constituted as publicly traded companies with a minimum capital requirement – as established by the National Monetary Council (Conselho Monetário Nacional).
Commercial importers are prevalent in Brazil, as they are governed by less stringent rules of incorporation. These firms have a greater tendency to work with small import volumes and operate, by and large, at the regional level.
IMPORTANT: In the event of substantial import volumes, execution of an exclusive import agreement may be advisable, through which the trading company or commercial importer acts as the sole supplier of the foreign good in Brazil. Exporters are urged to take into account the company’s commercial and financial capacity prior to concluding the exclusivity agreement.