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Merchandize Business

In: International Business Transactions and Taxation

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  • Manuel C. Solbach

Abstract

Merchandize business is the way of choice to operate “at arm’s length” between legal entities generally, but especially in an international environment. It requires legal entities of the vendor in both countries and therefore is by its concept a setup that demands more attention and thus resources than the direct business transactional model. In return for this investment, it opens the tight boundaries of direct business and offers more degrees of freedom to operate, especially when it comes to matters of customer proximity. This chapter starts with a definition showing the basic variances of the merchandize business transactional model, followed by more details regarding the implications for the activities and tasks of the functions of the vendor’s and customer’s enterprise in their respective legal entities. Role, advantages, and risks of crossborder agents in merchandize business are analyzed. It is shown that the flexibility gained through merchandize business has a price for both, the vendor, and the customer. The choice and design of the transactional model might in some cases even determine whether a business relationship can be established at all. The chapter closes with a summary of implications of the merchandize business model for the customer and for the vendor.

Suggested Citation

  • Manuel C. Solbach, 2023. "Merchandize Business," Management for Professionals, in: International Business Transactions and Taxation, chapter 5, pages 57-86, Springer.
    • Handle: RePEc:spr:mgmchp:978-3-031-39240-5_5
    DOI: 10.1007/978-3-031-39240-5_5
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