Volume 35, Number 3, March 2000
To Partner or Not to Partner ...
That is the Question
exploring the export partner relationship
by Rene Bergero
Have you ever thought about how your company can
develop an export partner relationship? Although this article is by no means an exhaustive
analysis on the subject, it will help you as you consider this option. (Although direct
selling plays a large role, I will discuss this topic in another column). First,
lets review some basic types of export partnerships and their potential suitability
for your type of
1. Export Management Firms
Export management firms typically are U.S. based companies who will buy your products and resell them to their customers. Export management firms usually carry many different product lines, although they do tend to be industry specific. These companies offer a set and forget approach to exporting. You dont have to do anything except ship the goods where they tell you to (usually a freight forwarder provided by the management firm takes care of this), and invoice the management firm. In terms of ease of use, export management firms cant be beat. However, there are some key factors that will determine the suitability of this kind of partnership for your export objectives. First and foremost, ask yourself if you are willing to put all your eggs in one basket. Most management firms require that you work exclusively through them. Also keep in mind that these firms typically require its customers to buy large quantities of product, which could limit the number of potential customers. Export management firms are good choices for companies that sell high usage products, like adhesives, sealants, paints and similar materials.
2. Sales Representatives
Sales representatives are your commissioned sales agents. Management time is required to properly administer a sales agent network. Keep in mind that agents live and die by what commissions they earn and so your products must have the potential to generate a superior return on their investment in time for them to push your line. A significant advantage that sales agents bring is their ability to provide detailed market information, including credit risk assessment. Many a sale was closed by an agent who persuaded a principal to extend credit to the customer. Remember, unless youre paid, neither is the agent. Sales agents typically do a good job with big-ticket items like machinery and high turnover items such as aluminum air spacers and desiccants. Float glass manufacturers also use sales agents extensively.
Distributors come in many sizes and shapes and finding the right one can be quite a challenge. An ideal distributor for your products would be a company that is already actively selling complementary products and does not carry any of your competitions products. There are also two key attributes that all good distributors will possess. First, they should have adequate resources to inventory your product and service its customers. Second, they need to be solvent enough for you to sell them on credit, as this is how they make money. These may seem like obvious points, but they cannot be stressed enough, as this will determine to a large extent your success. A good distributor will also look out for your best interests and may even suggest new products. Distributors are good options for companies that sell stand-alone products, like power tools.
How to Choose
Deciding which option is best really depends on your particular situation. The more control you have over the relationship, the greater the potential rewardsbut you must be willing and able to allocate the necessary resources. Let the nature of your product determine the best marketing channel and dont exclude the simultaneous use of more than one kind of relationship.
Rene Bergero serves as export sales manager for Sommer & Maca Industries in Cicero, IL. His column appears bimonthly.
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