international agents and distributors examples

In two European markets, France and Germany, Sylvac collaborated with Trimos SA and owned part of the distribution operations. Our export developers can prepare these steps with you, map the decision makers, reach out to them and introduce you. The next section will explore how this was accomplished by some of the firms in the research sample. grovara INC 2023 | BuyersTermsofService| BrandsTermsofService| PrivacyPolicy| Our Partners. In less familiar markets, intermediaries such as agents and distributors can help fill the knowledge gaps, overcome cultural and language barriers, and make the right connections. The development of some of the older firms was often impeded by wars and considerable fluctuations in currency values. "You have to know people in the industry who can steer you to the right place. . 2 Retaining an Agent or Distributor Before signing a contract with an inter-mediary, a due diligence investigation should be undertaken to determine whether the individual (or . Global sales at Plumettaz were made through four international sales subsidiaries in the Netherlands, Singapore, China and, most recently, in the US. Medartis needed access to orthopedic surgeons and was not well served by the Straumann Dental distribution network which was geared toward dental surgeons. Export growth International distribution strategy is the process of selecting the right export countries, finding the right distribution channels and positioning your product or service in such a way that your sales starts to grow. Answer five questions and receive a first proposal directly. But what exactly are these differences and what are the tricks? Alliance experts has the knowledge of the local circumstances and can create a better rapport with your distributors or agents. International Agents and Distributors - Grovara The same was true for other companies in this research, for example, Komax, maxon, and Oetiker. If material is not included in the chapters Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. You connect directly with potential buyers, which shortens the sales process and helps you develop business relationships with buyers that eventually become long-term partners. Marketing and sales responsibility for Europe, India, and the Near East remained in the companys head office location in Switzerland. The Seattle-based company's platform serves businesses of all sizes and across all industries. An equally helpful tool on the TSNN site is a searchable database of shows worldwide, enabling you to filter upcoming events based on criteria such as industry focus and country. Whichever option best suits your international business, remember that time and dedication are needed for expansion. In those countries, and in Switzerland, Ricola became the market leader in its category. The strategies pursued by two electronic component companies, LEM and u-blox, who started to build their networks over the past 20 or 30 years, show that companies continue to employ a mix of distribution forms, combining company-owned distribution with agents or catalog businesses. Connections may also be found by engaging with the US or the international markets trade associations. With global trade data and some desk research you may already make a first country selection. Please enter a valid email address. The agents are only responsible for selling the products. Eventually, LNS switched its sales strategy to go directly to dealers, eliminating OEMs. Setting the sales price is also your responsibility, but the agent will most likely advise you on local market conditions that could affect your pricing. These tool distributors, or agents, were all resellers of a full range of tools, including those of other manufacturers. Acutronic, one of the smaller companies in the research sample, needed to find a way to enter the US market, a must-win market for its product lines of simulators. At Caran dAche distribution in international markets was made through a few selective subsidiaries in Japan, Germany and France. This way you can move faster towards closing a deal. Subsidiary networks were the preferred choice of larger companies which had greater volumes per country markets. will pay off. With sales ranging between CHF 300 million and CHF 400 million, both LEM and u-blox were in a much better position to field their own distribution and sales forces. Grovara can help your brand simplify the selling process, EMEA (Europe, the Middle East, and Africa). Throughout its expansion, Bachem made several acquisitions that added to its global footprint. IMD, International Institute for Management, Lausanne, Vaud, Switzerland, Department General Management, ZHAW School of Management and Law, Winterthur, Zrich, Switzerland, KMU-HSG, University of St. Gallen, St. Gallen, Switzerland, University of Lucerne, Lucerne, Switzerland, You can also search for this author in After lack of success, Peninsula was prepared to sell and Bachem acted on this opportunity. In the 1960s, the major export markets were France and Germany. One approach that may be useful to finding buyers in-country is engaging with a partner, foreign distributor, or agent to represent your company in an overseas market. This field is for validation purposes and should be left unchanged. Grovara has established trusted relationships with global buyers, creating a perfect fit for the exported products of American brands, ensuring prime placements in the markets and on shelves best suited for them. The advantages and disadvantages of using agents or distributors are further discussed in the following video excerpt from the FITTskills International Market Entry Strategies Course . This model gives manufacturers total control over the distribution channel. Should the involved documents be translated into the local language(s)? However, the same company does not have a presence in Asia. One set of companies used China as a workbench to source products or materials. Dealer. While control over distribution channels allowed for close management of the messaging targeted at the customer, as the case for Jura, smaller companies (e.g., DC Swiss) were not in a position to do this because their sales per country, or market, were too low and did not cross the threshold to make such a control economically viable. Our templates include simple commission agreements and forms of appointment of agents and distributors both at home and overseas plus retail and telesales consultants. A number of sales subsidiaries followed in the UK (2003), the US (2004), Mexico and Poland (2008), as well as in Australia and Spain (2010). How do I find and add Amex Offers to my Card? Basic terms which should be specified in any agreement and discussed with a lawyer are: The typical problems that can arise after an initial period of working with an agent or distributor are insufficient support from the exporter and a lack of information about the market and customers from the partner. Brokers are similar to agents but represent a person or entity on a limited, per-transaction basis. What comparable data do you have from other markets? The key criteria will vary based on specific industry sectors and regions of the world, but some basic considerations include the size of your potential partner's sales force, its sales history, its geographic reach, its experience with different products, its infrastructure and its overall experience. Patience, consistent communication, and clear expectations are pinnacles when finding a representative, agent, or distributor overseas. The experiences of four smaller companies (Reger, DC Swiss, Sylvac, Plumettaz), all in the CHF 25 to CHF 40 million sales range, were selected to illustrate this type of distribution strategies. Ricola, the herbal candy producer, began to export in the early 1940s to Germany and France. Moreover, both U.S.-based and non-U.S. industry associations can often provide detailed information and introductions related to specific industry verticals in a given market. Jobber. The first major acquisition came in 1996 when Bachem AG was able to acquire Bachem, Inc., located in Torrance, California. Before engaging with a foreign representative, its good practice to do market research to identify where your product will fit and how you want to move forward. Then, at the beginning of the new century, the market for cutting tools had changed fundamentally compared to the 1990s. Provides more services than agents thus their fees are mostly higher than an agent's is. Perhaps the most well known online marketplace for B2B e-commerce is Alibaba. Extends credit to customers. Agent or independent distributor networks were not only the choice for smaller companies, but also common among companies starting out and, in some cases, remained the main sales network even after the company had grown. : How to Find and Hire a Perfect Sale Rep for Your Business. Department for Business and Trade on GOV.UK, Go to the page for international business, select distributors dont let them select you, carry out an assessment before committing to an agreement, draw up an agreement which clearly defines responsibilities, carefully consider the size of the territory, clarify the payment and reward arrangements, research the experience and reputation of the agency, understand the geographical coverage they can realistically offer, check if they understand your sector and what other companies they represent, ask for a reference, and contact one of these existing suppliers, ideally by phoning them, to discuss their experience with the agent, the territory (be specific if it covers more than one country), termination (conditions under which you can exit the agreement), intellectual property (ownership and situation in the event of termination), use of name and logo (and situation in the event of termination), maintaining frequent contact. They may also sell to other wholesalers who then sell to local retailers or end-users. Get a proposal Play Video Everything explained in one minute conquer a new market faster and more effectively with our help You can of course enter a new market by setting up your own sales force, but often the most effective way is by finding agents, distributors, brokers, resellers or even franchisees to sell for you. A good way to expand your business can be to take on sales agents or distributors. "Attending international trade shows is one of the best places to find agents and distributors, and is often a good starting place for relatively new exporters," says Roger S. Cohen, an international trade consultant in Nyack, NY. Can they demonstrate that they will be proactive, and someone you can build a relationship with leading to a long-term partnership? For Jura, the company did not want to be placed as one among 20 other coffee machine brands, just anywhere on a retailers shelf. For example, lets say your brand hires an agent to move a line of your Better-for-You product in Europe. 5 things to do before approaching local partners. With general country data, which is for example available in the World Bank database or websites like Trademap, you can find information to make a first selection of a few countries that may look promising. Therefore please check the legal requirements for your contract, and especially in the case of agents, the way they are protected. They are responsible for importing the product into their country of operation and the warehousing, storage, and transport arrangements. In 1979, the relationship with Cannon resulted in a major order over CHF 8 mio for motors to be used in a tachometer instrument. South Africa - Distribution and Sales Channels Are they professional, well-connected, knowledgeable about. The selling prices and terms of sale are determined by the distributor in the defined territory. The best way to find good partners is always word of mouth. Companies with higher sales per country were able to articulate their owndistribution and sales strategies, indicatingthat clear thresholdsexist when a company-owned salesunit could be implemented(LEM). Then, in 1979, the company made the courageous decision to open its own factory in Rural Hall, North Carolina, which produced mainly for the American market. We are short-term available and productive from day 1. For help developing a strategy for finding overseas distributors, the Basic Guide to Exporting provides a useful checklist. With direct distribution, the producer of a product directly sells to a consumer. An interesting twist on this idea is to approach the potential end user of your product for introductions to their suppliers. 1. Does processing payments take up too much of your time? The Filtrox experience and development demonstrates how each acquisition, in the UK, the Czech Republic, Spain, and Mexico, providedmarket entry to specific regions or market segments andwere the primary reasons to acquire these international firms. We use our personal networks, very focused local advertising, or may even visit events where they speak. No search agency fees and training costs. Given his talent for writing, he authored articles in the Neue Zrcher Zeitung (NZZ) about Japanese food and nutrition. Those distributors were important to Ricola because in the early growth phase of the firm production was a constant constraint. Our proprietary eCommerce platform acts as a virtual trade show that connects your organic food brand with buyers located all over the world. However, they have standard recipes and follow the same techniques across all the branches. Agents and Distributors. As seen from the experience of companies starting out with either independent distributors or agent networks, or having relied on OEMs, the preferred channel in the end is a fully controlled network consisting of sales subsidiaries. Abstract. This requires local knowledge of the market and a well-structured plan. PDF Working With International Agents, Distributors and Consolidators In each of the ten steps below, we will be at your side. All rights reserved. In addition, Sylvac engaged in extensive OEM arrangements for about half of its sales. The distributor then sells the goods on to the final customers having added their profit to the price. What Does An Import-Export Agent Do - Zippia We hope you find this information useful. Major changes also took place in the Chinese markets where the company changed its initial long-running export relationship with a Swiss-based trading company to deal directly with a Chinese partner. We offer American natural food brands the opportunity to discover new markets, streamline order processing, facilitate payments quickly, and ensure the fulfillment process sends the right organic food products to the right international markets. A system failure occurred while saving your consent to Opt-out. The next step is to sit with the distributor to find out where the problem is. As international sales developed, a need for company branches arose, starting in 1984 in Los Angeles (US), followed by France and Italy in 1990, the UK (1992), Malaysia (1994) and Korea (1999).Footnote 12. The task of finding and appointing suitable distributors or agents takes time. This applies to a number of aspects: Customers: the customers the agent finds and nurtures still belong to you. Please note that we will not use, disclose, or retain the information you provide for any purpose other than to process your request. The agents are not involved in the delivery or after sales services. 1. Everybody knows that negotiating in Germany is different than in Japan. With its reseller-model in danger, the company was looking to defend its business in ways that could not be easily copied by, or sourced from, Asian products. Bakery fillings,Felchlins main product for decades, were hard to export as moisture problems posed packaging challenges. Here are a few ways your business can find international distributors. For example,a person who is treated as a distributor under foreign law may be con-sidered an agent for purposes of the U.S. Foreign Corrupt Practices Act ("FCPA"). The subsidiary in the US was an independent operation but was still strongly embedded in the corporate strategy. International expansion began in 2002 with the opening of sales offices in Germany, Austria and France. Examples of intermediaries include the following: Wholesalers are intermediaries between manufacturers and retailers. This allows the company to build a relationship and ensure products are well represented. The need to be close to customers led to the establishment of more than 20 sales offices across the world.Footnote 17. We have noticed, looking at the ads posted by our users on the Globartis business platform, that these terms are sometimes used confusingly. All rights reserved. Turnkey Contracts Sorry, our system is temporarily unavailable. Sylvac, focusing on both manual and digital measurement devices, utilized a mix of distribution channels that includes not only independent agents but also collaborations with other companies in similar circumstances. Trust is crucial for these relationships because direct oversight is limited due to physical distance. At the end of the 19th Century, half of the production of Swiss silk gauze went to the US. However, instructing an agent is a relatively inexpensive and efficient way of having sales staff in a territory without necessarily investing heavily in infrastructure or people. LNS founded Nippon LNS in 1991 as a JV, but results still disappointed in relation to the potential of the Japanese market. This experience demonstrates that the best distribution network needs to reach the exact and specific sales targets. Once a company with manufacturing operations abroad was acquired, the SME usually obtained market access, base sales, and distribution outposts around the newly acquired operation. Alliance experts know how to distinguish a polite yes from a real yes. You have to know people in the industry who can steer you to the right place. It may be easier to compete in a market with many smaller players than with one big incumbent. The international expansion of Felchlin was partially affected by its traveling owner, although these developments did not always take the form of a deliberate strategy. Each piece of the puzzle was then integrated into the overall Bachem operation to expand its global sales footprint. Once initial contacts were established, formal distribution networks had to be built and maintained. Especially if you only have a few potential channels, then your pitch should be spot-on, and you should have the right cultural awareness in your approach. Plaston faced numerous challenges in dealing with government regulations, power outages and staffing requirements set by the state-owned business. Who are agents? Should they abandon this? In 1984, Toni Rusch became managing director of Filtrox. What is the Right Amount to Start Exporting? With this option, be sure to understand their motivations and comfort with the market, as there are more challenges when doing business in different cultures. Additionally, we ask for your email address in order to identify you and process your request to opt out. Trinidad and Tobago - Distribution & Sales Channels It's a global market," says Cohen, and everyone has competition wherever they go. We can have a more relaxed discussion and get to the real problem why sales is lagging behind. What Is Wholesale Distribution? Benefits, Examples & Tips Maintain regular communication and oversight. The hiring process for an overseas representative will require some research. Most of the acquisitions were initiated by the companies approaching Bachem and offering themselves for sale, reflecting more of an opportunistic rather than a planned approach. Last published date: 2022-11-28 Europe accounted for about 40 to 50 percent of sales, and Asia about 35 percent. Are you hiring this person on to your team as an employee, or will they be a contracted individual? on international business partners and agents is important to minimize risks. You can see us as the temporary and part-time extension of your team. Since agents operate on a commission basis, they are more motivated to sell your organic food products and promote your brand to new customers. As trade barriers started to be reduced and Fraisa European competitors started to enter Switzerland, expansion into European markets became a necessity. Register to unlock access to international insights, webinars, and resources that help you mitigate risk and grow your business. When results were disappointing, the Japanese agent suggested to form a JV. The world is your oyster when it comes to international trade. The experience of Plaston combines both challenges, China as a workbench and as a market. With limited knowledge of English, he went to the US and, in 1972, opened two sales offices there. Bachem, Inc. was originally established in 1971 by Bachems founder together with a local partner. EAO, who managed to establish its presence in the Japanese railroad market, gained an 80% market share for door opening push buttons as a result of custom solutions and an extremely high delivery responsiveness.Footnote 20. A good distributor/agent is the best way to solve a variety of problems including communication and providing after-sales service.
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