The factors that govern the choice of mode of entry into international business are as follows :
- Background of importer: Before entering into any
contract, the exporter must find out the previous record of the importer and if it is satisfactory, then only he enters into contract.
- Financial soundness of the importer: The exporter
must find out the credit worthiness of importer whether he will be able to make payment in time or not. He must find out this information from the banker of importer.
- The type of goods to be exported : The exporter
must find out complete information regarding the size of goods, quantity of goods, etc. very clearly and if he can supply goods according to the specification of the importer, then only he should accept the order, because if orders are not supplied according to specifications, the importer can reject the whole consignment.
- Mode and time of payment: Before accepting the
order, the exporter must find out within what time period the importer will make payment and whether he will pay through letter of credit, bill of exchange or cheque, etc.