Role of Distributors & Agents in Exporting Business with Red Bottoms

by redbottoms2h on 2012-02-09 14:43:11

Also known as commission agents, they are responsible for selling your products in foreign markets. They are experienced campaigners and quite familiar with the market you are going to target. They know the customers and their needs. However, the thing to remember is that they are solely responsible for selling your products. They do not buy from you directly; neither do they involve themselves in delivery or after-sales services in most cases. Their source of earning is the fixed commission on every sale (or gross sales, they will make for you). Commission agents must be able to meet the following requirements before you hire their services: they should have loads of experience. Check to see if the agent also deals in some of your competitive products. Review the past record of sales and stats for the business they have provided to other exporters in the past. Determine how much of the market that agent can cover on his/her own and to what extent. Do they sell to end users or businesses?

Distributors: Unlike commission agents, distributors normally purchase the product from you (at low rates) and then sell it in the market while maintaining some inventory at all times. Given that they also provide after-sales services, they are more suited if your product needs some installation work or requires after-sales services. Distributors should be financially stable. They must be good in inventory stocking and warehouse management. They should have technical information about the product (train them if needed). They should be ready to work at the price margins you are willing to offer. Be careful when going into a contract and think over the clauses many times before signing. The distributor should be capable of running or managing the advertising campaign if needed.

Now, whether you should go for agents or distributors? The answer to this question will depend on your product and preferences.