Webinar : Working with agents and distributors

Webinar posted by William Barns-Graham, on behalf of Open to Export

In May 2015 Open to Export hosted the ‘Working with agents and distributors’ webinar with John Reed (Export Aid) and Richard Mullett (The Legal Partners) speaking and answering questions.

The major talking points

The key takeaways from the webinar were the following:

  • Differentiate yourself from your competitors in order to win the attention of the major sellers and distributors – there are only a few key players per market.
  • Have a 5 year plan for how you go about exporting your product in the medium to long term – this will give greater focus and structure to your initial movements.
  • Have a clear regional strategy whereby you might target a country like Colombia or Canada first in order to test the waters before trying to break into a bigger market like America or Brazil.
  • Find the people who are busy and be sceptical about the people who approach you first – the best sales reps are the ones who make you wait for a deal.
  • Exclusivity has to be earned so don’t rush making an agent or distributor your exclusive representative for selling your product.
  • Test the waters with a new sales rep by hiring them on a trial period with clear targets and a clear time-frame for them.
  • Be specific with your terms and regions in your contract to avoid any confusion or legal complications.

You can read articles with further information and guidance relating to these questions about distribution channels and sales reps in our Reaching Customers section.

You can watch the video of the webinar below, and check out our Recent Webinars page to access all the Open to Export webinars giving practical guidance and answers to all your exporting concerns.

Questions and Answers

As usual, attendees gave some excellent questions to which the two experts gave informative answers. Here are the questions and the answers given to them (with the time they are addressed in brackets):

Q: What can you do to mitigate against the potential risks and consequences of an agreement collapsing? (42:50)

A: Ensure that there is a termination notice period written into any arrangement – this should cover most bases, provided it isn’t an agent relationship in the EU.

Q: What’s the best way of going about finding the appropriate distributor for the product you are exporting? (43:50)

A: The first place to go is the trade associations and publications of your selected market. Within these, see who advertises the most and check on their sites to see who else they represent.

Q: How should you go about using representatives in the Chinese market? (46:05)

A: There are subtle but significant differences between the Hong Kong and Chinese markets, so be wary of using one for the other. Mainland Chinese sellers prefer to sell to mainland buyers, while Hong Kong Chinese prefer to sell to Hong Kongese.

Q: What is the difference between using an agent or distributor in terms of the affect on your cashflow? (47:50)

A: The sale should be quicker with a distributor because they are already within the market and can sell your product into it straight away; with an agent, there is the extra step of you selling to the customer the agent has delivered you.

Q: What’s the best way of protecting your product in a location where you do not have a local presence? (50:45)

A: IP should cover a broad enough range of areas to cover you to a large extent (read this article on intellectual property abroad if you need more info).

Q: How can you ensure that your representative is charging the right price for your product? (53:20)

A: Distributors will continue to have their own motivation to make margins on their sales anyway, but in weaker economies like India, higher end products will be more of a struggle to make margins on. Constant communication with your representative is key for getting the pricing right (read Richard’s article on managing your representative for more information).

Q: How would you approach keeping your product towards the top of your representative’s priorities? (56:40)

A: The pragmatic answer is that the representative will generally prioritise whatever will make them the most profit, but communication is again key. It’s important not just to ask the representative for their support in selling your product, but it is also important to ask them how you can help them to sell it.

Open to Export hold monthly webinars about the different opportunities and challenges involved in exporting. Check out our upcoming webinars page for more details.