[share] Selecting the right foreign partner in a new country is a critical marketing decision. The right partner can lead to new sales and profits. The wrong partner may mean significant lost sales, poor branding and ultimately withdrawal from the market. For most companies, their first foreign partner is their agent or distributor. As that partner will be doing most of the marketing activities in the country, getting the right partner is crucial.
A firm must begin by detailing what it wants from the foreign partner. How much of the sales and marketing burden will be pushed on to the partner? If the exporter is planning to open a distribution facility, then much of the logistics issues will be handled by the exporter rather than the partner. Similarly, if the exporter is planning to open an overseas sales/marketing office, there are considerably less expectations from the partner.
Following are some of the issues to consider when choosing a partner. These will help identify the potential strengths or weaknesses of each partner as well as the opportunities and threats they face in the country and industry in which they operate. These same strengths and weaknesses need to fit with the strengths and weaknesses of the exporter, and the opportunities and threats need to match with the international goals of the exporter. This may be difficult to achieve, which is why the selection of a foreign partner is most commonly selecting the ‘best’ partner among a list of considerations rather then finding the ‘ideal’ partner.
Product Lines Currently Represented: One of the best indicators will be the product lines (brands) the potential partner already represents. This reveals a great deal about their experience, strengths and focus. There may be some lines that would be competitive with the manufacturer’s product and preclude any potential for a representation agreement. This is particularly important for exclusive representation agreements. Manufacturers want to avoid ‘line collectors’ – companies that try to represent as many product lines as possible in hopes that ultimately one or two will be huge successes.
Industry Focus and Technical Knowledge: Most agents and distributors focus on particular industries. Though their focus may not be a perfect match, it can be used as a guide. If particular technical knowledge is required, such capabilities will need to be identified.
Years of Experience: Manufacturers are sometimes attracted to relatively new agents and distributors that may be more aggressive given their relative need to grow and succeed versus other competitors in the market. On the other hand, a mature, experienced partner may have the needed contacts to ensure greater success for the exporter.
Sales Structure: This is a critical indicator. It describes how the foreign company sells and to whom. For example, does the distributor only sell to retail locations, but never to the end-user? Does the distributor sell to large accounts?
Current Customers: If research has determined that particular customers are crucial, such as government agencies, some clarification by the company needs to be made to ensure they will be contacted.
Customer Support: If training, parts distribution or product repairs will be necessary, determine what customer support functions the company is able to provide.
Office Locations: The location of the main office and any other offices will indicate the geographical sales focus of the company. It will help determine what part of the territory it can effectively cover.
The Illinois SBDC International Trade Center can assist in finding suitable foreign partners. We subscribe to databases that list foreign companies by industry and sales activities. The State of Illinois Office of Trade and Investment offers direct assistance in finding and vetting foreign partners, as does the US DOC Peoria Export Assistance Center within the U.S. Commercial Service. Please don’t hesitate to contact us for your next partner search. For more information, call (309) 677-3075 or email firstname.lastname@example.org.
Tri-State Global Commerce Network
May 11, 2011
Networking Opportunity for Individuals & Organizations Interested in Global Commerce
[share] As a result of recent discussions with Dan Chevelier of Gardner Denver and John Macdonald of Broadcast Electronics there is currently an effort underway to gauge the level of interest in starting an informal professional organization to exchange ideas, host presentations, and address topics related to international sales, import and export compliance, international finance, and other aspects of global commerce, initially meeting in Quincy. The idea would be to meet in an informal atmosphere once a quarter to start. Speakers, mentors, and other educational resources are available.
Sample topics might include:
– Getting started in overseas markets.
– Finding and developing distributors overseas.
– International logistics and freight forwarders.
– Developing and documenting an Import and Export Compliance Program.
– Resources for developing international sales- public and private.
– International transaction payment method options.
– Benefits of using Foreign Trade Zones and Subzones
– Trade potential and characteristics of specific countries and regions.
Individuals or companies new to global commerce would be as welcome as seasoned international trade professionals. If you or someone in your organization would find this networking opportunity of value please email email@example.com with your contact information under the email subject line; Tri-State Global Commerce Network.
Once we have a database of interested individuals and organizations, we will propose a date and venue for a kick-off meeting. For more information, please contact Charles Bell at 217.223.4313 or firstname.lastname@example.org.