by Joe Robinson

The challenges facing exporters today have been around since the dawn of foreign trade. In contrast to domestic business, international commerce involves greater distances; different cultures, time, currency, and language; and regulations from more than one government. These factors require more effort and place more demands on your staff. A good overseas partner can help offset these challenges and could provide you with a valuable asset as you pursue new business growth.

 

Choosing a good overseas rep or partner to help with these issues has proven in numerous instances to be a successful strategy for many large and small exporters. This also creates a lot less demand on your expenses, time and travel to overseas markets.

 

If your company has a comparative advantage or competitive advantage in your product or service, you may want to consider the overseas partner arrangement to enhance your revenue generating opportunities. The question is: What constitutes a suitable partner, and how do I find a good overseas partner with limited staff, time and resources?

 

First be sure to find a representative or partner with the largest possible already established customer base covering your product or service in the target market. Find a rep or agent you can trust, and one who is looking to add a company like yours to their business line. A key benefit of using an overseas sales partner is that you get the advantage of their extensive knowledge of your target market.

 

Make sure you are comfortable with your agent on a communication level as they will represent your business overseas, so you will need to have a good working relationship with them.

 

Check the agent's portfolio and follow up references. You need to ensure the agent is capable of doing what they say and will be comfortable selling your product alongside others that they represent.

 

Research potential partners carefully before you enter into a sales agreement. Get professional assistance and counseling in order to prepare a good partner agreement. Formalize the agreement. At the very least you need to have agreed commission rates, length of agreement, and mutual responsibilities established in writing.

 

To ensure a conscientious sales effort from the foreign representative, the agreement you work out should include a requirement that the representative apply the utmost skill and ability to the sale of the product for the compensation named in the contract. It may be appropriate to include performance requirements such as a minimum sales volume and an expected rate of increase on an annual basis.

 

Ask the prospective rep for their assessment of in-country market potential for your firm's products. Such information is useful in gauging how much the rep knows about your industry, and it provides valuable market research intelligence as well.

 

Foreign reps often request exclusivity for marketing in a country or region. It is recommended that you not grant exclusivity until the foreign rep has proven their capabilities or that it be granted for a limited, defined period of time with the possibility of renewal. The territory covered by exclusivity must be clearly defined.

 

Do not hesitate to ask potential partners detailed and specific questions. You have the right to explore the qualifications of those who represent you overseas. Well-qualified reps expect you to ask questions, and they gladly provide answers that help distinguish them from less-qualified competitors.

 

Obtain two supporting business and credit reports to ensure that the potential partner is reputable. A second credit report from a different source may provide information the first report overlooked.

 

A technique I use to find a good overseas partner is the International Partner Search (IPS) service of the U. S. Department of Commerce. This service is carried out by experienced trade professionals who contact key players in your overseas market. The IPS will deliver a pre-qualified list of potential trading partners in less than 30 business days. The cost of this service is based on the size of your company, but it is a bargain because you get high-quality market information on the marketability and sales potential for your products and services.

 

IPS also provides complete contact information on key officers at each potential partner that is interested in your company, along with information on their size, sales, years in business, and number of employees. You even obtain a statement from each potential partner about the marketability of your product or service. Go to the Export.gov website for more details and to register for this helpful service. Incidentally, many other countries offer their companies (your competitors) similar services to help them find good overseas business reps and partners.

 

More than 90% of the world's consumers are located beyond U.S. borders. Pursuing new export markets is a logical approach for generating new business and more revenues for your company. Now may be an opportune time for a calculated decision supported by a well-planned strategy to forge ahead with a good overseas partner.