Find Overseas Buyers and Distributors

Finding the agents or distributors for each market is crucial. You need good overseas business partners to generate sales. Agent/distributor selection is especially important. A poor sales rep. could seriously hamper you in good markets. Therefore, you want to choose carefully.

Here are techniques for finding "interested buyers" and "qualified agents and distributors".

Find Potential Buyers

You can't assume that the buyers will find you. You need to search for your own leads.

The best leads are the “first-hand leads” you uncover on foreign business trips or that your overseas reps. find for you. These leads are also more costly to develop.

If you don't have overseas reps. or can't afford overseas sales trips, give the "second-hand" leads a try. Second hand leads, are those you find out about by reading on the internet, though magazines etc. They're often very good leads too. However, since your competitors can learn about them too, you MUST follow up quickly on these leads.

Some of the best leads are for “development projects” still in the planning stage. These future projects offer opportunities for equipment, supplies and services of all kinds. They often have government support and financing.

Find Potential Agents/Distributors

Finding and keeping good overseas reps. is a four-step process:

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

Step 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
Your market objectives
The qualifications you seek in a potential rep
What the rep could expect from you (pricing, payment terms, delivery, promotional support, etc.)

You should respond promptly to all serious responses, try to answer all questions as fully as possible, and provide product information etc. Do use discretion in sending costly product samples, especially if they could be easily copied. Product samples should be reserved for the top prospects.

Once you've located some prospects, how can you tell who's best?

The key is to know what you want in a rep. You should identify the qualifications needed for effective representation. The requirements may vary by product, but five basic qualities are fundamental:

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

When finding your rep. make sure you know the following background information on each prospect:

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

Don't hesitate to ask prospects for this information. They'll respond if they want your business. Of course, don't go by what they say alone. A face-to-face meeting with top prospects is also wise at some point, preferably at their premises for a first-hand evaluation.

Select and Appoint the Best Reps

Once you've identified the best prospects, you should formalize the appointment with an “agent/distributor agreement”. These agreements clearly specify the terms of the relationship and the responsibilities of each party.

The “agent/distributor agreement” should cover the following:

Products covered
Territory covered (e.g., country)
Degree of exclusivity
Minimum sales/purchase obligations
Responsibilities for marketing, promotion, shipping
Responsibilities for technical support, training, after-sales service
On-hand inventory requirement
Allocation of expenses
Terms of commission/payment
Handling of complaints and disputes (e.g., arbitration)
Conditions of termination

These points are negotiable. Aim for a mutually beneficial agreement that motivates the rep and protects your interests.

The rep will also ask you to respond promptly to orders, deliver the product on time, pay the agreed commission, provide training or other specified support, and pay a fair share of any joint marketing and promotion expenses.

These are reasonable conditions. In turn, you should seek the following commitments from the rep:

To apply the utmost skill and ability to the sale of your products
To effectively perform the marketing, promotion and support tasks you specify
To meet any performance goals you specify (e.g., sales volume and growth)
Not to handle competing lines
Not to disclose confidential information about your company and products
Not to bind you to agreements without your prior approval

Please Note: It's also very important to have an “escape clause” in the agreement. You need the flexibility to change your rep. if the rep doesn't perform as agreed.

Most agreements specify a specified duration (usually one year), with automatic annual renewal, unless either party opts to terminate. Typically, advance notice is required for termination (e.g., 30, 60 or 90 days).

However, some countries limit termination rights in order to protect local businesses. Without an enforceable termination clause, you might have to retain a poor performer longer than you want, or pay a high fee to end your relationship with your rep.

You should consult an internationally experienced attorney before signing any agent/distributor agreement.

Support Your Overseas Reps

Good reps need your co-operation and support as much as you need theirs. Treat them as you would your domestic sales force. Prices, terms and commissions should be reasonable. At the least, you should:

Alert your reps to planned changes to the product line, pricing and delivery
Respond promptly to their calls and correspondence
Provide product training and customer support as needed
Consider help with promotions, including cost sharing for trade shows and media ads.
Deliver the goods when and as promised

Next - Responding to inquires >>

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