Once you are export
ready you can decide how you want to enter a new market. Let us evaluate
how an agent or distributor can help with exports.
Agents work as your business representative in the local
market and can use their local networks to obtain orders for your products.
They usually work on commission. They can support in various ways including:
- providing local market intelligence
- advising on local regulatory requirements
- providing advice on product adaptation and
- helping with end user feedback
- assisting in forming programs and policies for
the local market including warranties,
Many companies decide to work with distributors because of
their large networks.
- has more control over marketing, pricing etc
- is responsible for storing and transporting goods
in the foreign market
- can provide insights into the local market and
better customer satisfaction
- can be an important source of information
regarding business processes in the local market
Agents and Distributors:
Some of the differences are:
- An agent does not take title to the goods and
thus will not assume any risks. A distributor has control over goods and will
maintain an inventory to sell to clients.
- An agent can make suggestions about pricing but
does not have the final say in it. A
distributor decides on the price that allows him to make a profit. A
distributor may want to buy from you at wholesale price as he/she assumes all
- A distributor will accept payment from end
users. An agent usually does not accept payment directly.
It is important to do your research before you decide to enter
into an agreement with an agent or a distributor. Prepare a set of questions to
get more information. Below are a few suggestions:
- What is their experience in selling similar
- What networks dos they have in the local market?
Are they part of local chambers of commerce or similar organisations?
- What major accounts have they handled in the
past? What are the main marketing successes?
- Is there a conflict of interest if they decide
to enter into an agreement with the present exporter?
- What type of software do they use to track
inventory and customer feedback management?
- Do they create a marketing campaigning tailored
to products that they represent?
- Can they provide references?
Researching and interviewing prospects will help you make the
Questions? Email us at email@example.com