Finding Partners Abroad

1. Finding Partners Abroad

2. 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

3. 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.

4. 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-Business (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.

5. 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).

6. 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

7. 1b.   MARKET ACCESSIndustry 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

8. 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 09842Tel: 30/210/720-2331, 720-2333Fax: 30/210/721-8660Mr. George BonanosEmail:   George.Bonanos@mail.doc.gov” • Source: Country Commercial Guide

9. 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.

10. 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/startup/eb/page.cfm?chapter=2&sec=12 • 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.

11. 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

12. 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

13. Sources for Checking Reps • Dun & Bradstreetcan 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.

14. 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. Government’s 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.