What's better: Sales Agent or Distributor?

2/13/2006

Doing Business | Services and Solutions | Publications

MANY DESICIONS involving export business are made without proper understanding of the relationship between manufacturers and their principal intermediaries. This often leads to sales effort that is time-consuming, not effective, and sometimes even disastrous for your company.

After you have determined the target market you wish to expand your overseas business and have done an in-depth investigation, you should then think of the trade channel you are going to create in order to deliver the merchandise to the end user.

As most businessmen your will be looking for a local representative that will help you market your product abroad. But careful, a long-term trade contract may boost your turnover dramatically or reduce it to zero!

The two most frequent types of agreements between the export intermediaries and their trading partners are selling products through a distribution channel or a sales agency.

Both ways have their advantages and disadvantages and you may find it useful to consider the following criteria to make the final decision:

• Marker size. If the market is small, one distributor may be sufficient. If it's large and has a large scale of consumer trends a sales agent or a trade consultant will be useful to help you implement the right strategy in a particular region.

• Market experience. Each country (especially if we are talking about emerging markets) has its own legal, commercial and cultural peculiarities. If you are unaware of them it may be difficult for you to establish a solid business presence in this region.

• Export experience. If you have already sold your products to several countries on a regular basis, it will be easy for you to access new markets, but with small i-trade experience you will certainly need help to make your first steps abroad.

• Type of product. For industrial products' manufacturers it is always better to have one trusted and qualified representative they will work with in several regions. At the same time consumer goods like food stuff or electronics are better sold through several distribution channels.

• Country type. If you want to export to a neighbor country or you speak the language of your new trade partners, it will be a lot easier for you to start. An emerging market may be very attractive but it also has a lot hidden threats you may not even know about. Be sure to learn as much as possible about your clients, their culture, economic solvency, etc. and prepare yourself for unexpected situations.

If you need assistance along the way, we are here to help.

Contact us at +7 (499) 504 4119 or .