Finding Partners Abroad

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Finding Partners Abroad
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Distribution Plan

• Distribution options include
• Sell through agents or distributors in the market
  (most common)
• Sell directly to end users in the market
• Hire overseas sales staff to cover the market
• Establish overseas sales offices in the market
• Establish overseas joint ventures or subsidiaries
  

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Sell Through Agents or Distributors in the Market

• Overseas agents typically act as your
  representative in the market.
• develop and send sales orders,
• arrange payment in dollars,
• prepare all required import documents,
• clear the goods through customs.
• work on a commission basis and don't take title
  to the goods.
• Overseas distributors, I
• Perform all the functions above,
• Plus generally purchase the goods and resell them
  at a markup. Many are equipped to stock, install
  and service the goods.
• In large, developed markets, agents and
  distributors often specialize by industry. In
  smaller, less developed markets, they're more
  likely to carry many different lines.

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Sell Direct to Foreign End Users

• Direct selling avoids intermediary costs and
  offers more control over price, service and level
  of effort.
• Viable option in markets with only a few
  potential buyers, or when you or the end users
  can easily find each other.
• Direct selling is particularly used for mail
  order sales and now increasingly for Web-based
  Business-to-Consumer (B2C) and Business-to-Busines
  s (B2B) trade.
• Direct sales are less effective where seller and
  buyer are not easily matched. Without a local
  representative, you must find the prospects and
  handle the transactions.

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Distribution Plan

• Determine which selling approach is best.
• a. Consult Country Commercial Guides (CCGs)
  "Marketing U.S. Products and Services in
  (country) chapter
• b. Industry Subsector Analyses (ISAs).)
• Find distributors.
• Find end foreign buyers (trade leads).

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1a. Distribution and Sales Channels - CG

• It is estimated that over 80 percent of Greece's
  import trade is handled through sales agents or
  distributors.  Agency agreements are not required
  to be exclusive and can be signed for any period
  of time.  Distributors operate on wholesale (and
  in some cases, retail) basis with exclusive sales
  rights for certain districts or for the entire
  country.
• The key to success in the Greek market is to
  have an experienced agent or joint venture
  partner with suitable experience and an extensive
  sales network.  The ability to offer full
  after-sales support to the end-user, along with
  spare parts is also crucial.
• Commercial Guide, 2004

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1b.   MARKET ACCESS Industry Sector Analysis

• U.S. companies interested in expanding their
  presence in the Greek market are strongly advised
  to collaborate with established importers and
  distributors of auto-parts in Greece.  This
  collaboration can help assure Greek auto dealers
  and auto repair shops that the U.S. products do
  conform with the exact specifications of the
  automobile manufactures for replacement parts.
  ISA, 3/15/01

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2. Find Distributors

• For more information about the Greek market for
  the automotive sector, or assistance in
  identifying qualified potential Greek agents,
  distributors, or partners, please contact U.S.
  Commercial Service U.S. EmbassyPCS 108 - Box
  30APO AE 09842 Tel [phone],
  720-2333Fax [phone] Mr. George
  BonanosEmail   George.Bonanos_at_mail.doc.gov
• Source Country Commercial Guide

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Steps For Finding Potential Agents/Distributors

• Identify and contact prospects in each market
• Screen and select the best prospects
• Contractually appoint the selected reps
• Support the reps over time.

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1. Contact and Screen Prospective Reps

• First impressions count, so what you say first
  is very important. The initial message should
  convey basic facts about your company and
  products and your market objectives, the
  qualifications you seek in a potential rep, and
  what the rep could expect from you (pricing,
  payment terms, delivery, promotional support,
  etc.). For guidance in communicating with
  agent/distributor prospects, see sample
• Introductory Letter to Potential Overseas
  Representatives and Responses to Inquiries from
  Agent/Distributor Prospects. http//www.citd.org/s
  tartup/eb/page.cfm?chapter2sec12
• You should respond promptly to all serious
  responses, try to answer all questions as fully
  as possible, and provide standard product
  literature. Do use discretion in sending costly
  product samples, especially if they could be
  easily copied. Product samples should be reserved
  for the top prospects.

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Screening Requirements for Reps

• Experience - a rep with a solid track record as
  an agent or distributor expertise in the product
  area and strong connections in the user
  community.
• Capability - a rep who can market and support the
  products in the way required (e.g., promote the
  product, train users, install and service
  equipment)
• Motivation - a rep who is enthusiastic about the
  product and able and willing to give it priority
• Loyalty - a rep who would not desert you for a
  competitor or represent a firm with a competing
  product
• Honesty - a rep with a good reputation in the
  industry and good bank and trade references

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Specific Assessment Criteria

• Current status and history, including background
  on principal officers
• Personnel and other resources (sales people,
  warehouse and service facilities, etc.)
• Sales territory covered
• Current sales volume
• Typical customer profiles
• Names and addresses of foreign firms currently
  represented
• Trade and bank references
• Capability to meet your special requirements
• Opinion on the market potential for your products

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Sources for Checking Reps

• Dun Bradstreet can provide commercial profiles
  on foreign firms for a fee.
• The U.S. Department of Commerce's International
  Company Profiles cover the foreign firm's trade
  experience, size, the companies and products it
  already represents, principal officers, bank and
  trade references, financial stability,
  reputability and its suitability as a possible
  trading partner for U.S. exporters.

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3. Find Foreign End Users (Buyers)

• Two basic sources of "buy" leads
• The ones you or your reps develop first-hand
• Second hand leads -- the ones you hear or read
  about
• Good trade lead sources include
• U.S. Governments Trade Opportunity Program found
  on the NTDB,
• FAS Agricultural Trade Leads,
• Commercial News USA trade leads,
• Global Technology Network.
• World Trade Center (WTC) network, and many
  states have their own overseas trade offices.