Should you factor in future agent costs when selling directly online?
Question
We are a small company and want to test consumer acceptance of our product in India. We dont know of any agents etc. so we are thinking of using ´fufilled by Amazon India services´ so that we can sell directly to Indian consumers and test the market.
When pricing a product for direct online sales, would you advise still ´adding in´ potential future agent costs so that you dont end up with a dual priced product should we expand beyond direct internet sales?
Many thanks, Rob
Answer
Excellent question Rob.
This depends on your export strategy.
If your product needs local sales and marketing to be a mass market product then you need to think about a distributor.
So even if you are just growing your brand presence online in a country with amazon before true market entry then you should take the extra margin for the distributor, into account.
However if your strategy is only to target consumers direct then you don’t need to take the middle man into account.
Gilio Moscardini
http://www.exportadvisory.com/