Piggyback

Piggyback Exporting: Do you want what I have got?

Piggyback = Carrier + Rider

• Carrier = Larger company which operates in certain foreign markets
• Rider = export-inexperienced SME

Piggyback exporting is a foreign distribution operation where your products are sold along with those of another manufacturer. This form of exporting is used by companies that have related or complementary (পরিপূরক পণ্য) but noncompetitive products.

For Example:

• Let us say that you have a company that manufactures hairbrushes. You are not yet exporting, but you are interested in selling your hairbrushes in Italy. You just do not want to assume any risks or deal with major headaches.
• “Across town” is a company that makes shampoos. It is a well-established manufacturer and exporter of a line of shampoo products —and it is currently selling its entire product line to the Italian marketplace.
• In piggyback exporting, you approach the shampoo company and offer to allow that company to represent and sell your hairbrushes in Italy.

Why would the shampoo company be interested in such a deal?

• Because this enables the shampoo company to offer a more complete line of products to its distributors with little to no additional investment. The shampoo company will profit either by purchasing the hairbrushes and adding on a markup or by coordinating a commission arrangement with you.