Mechanism of economic business at lohn
According to the specialist’s definition, the processing in lohn system consists of an international economic business carried out on a contractual basis between two companies of different countries where one performs, for a retribution in cash or in kind, a custom-made product according to the designs, drawings, usually with raw materials and materials of the other companies, which keep their right to trade that product under its own trademark.
At present, the annual production achieved in lohn at the worldwide level exceeds 10,000 B $.
Lohn, the custom-made production, is a simple form that can contribute to the advantageous mutual settlement of some international asymmetries related to the available workforce and the cost of workmanship, raw material demand or production capacities.
The custom-made product indicates two aspects:
a) the finite product is performed with the raw materials and the materials of company that performs the order;
b) the finite product is manufactured by processing of raw materials and the materials of company that requires the order.
Being about the finite products performed according to the client’s indications and drawings and in the quantity required by him, the dispatch is 100% ensured.
The company that launches the order is called buyer, importer or beneficiary. The company that performs the product is called exporter or producer.
The buyers at lohn are companies that hold prestige marks. We may assert that the main goal for the buyer, followed by lohn operation, is the valuation of capacities of some prestigious marks they benefit of, as well as the managerial and marketing ability.