The process of finding a foreign sales rep is critical for your success in any global market and some may say it’s just as important as when you find a foreign manufacturer. Due diligence is KEY and every foreign sales partner must be vetted thoroughly. Some foreign sales reps have strengths in areas such as knowing how to distribute your product successfully and knowing who to pitch your product to; but the most important factors are choosing a partner that has experience selling your product or service with established contacts on their radar. And please note - if you’re selling to a region of the world, finding one regional distributor has been more successful than handling a sales rep in each country.
The U.S. Commercial Service has programs available to help you search for the perfect foreign sales rep or distributor abroad. But, there are other sources as well that can lead you to choosing the right partner:
- Local trade associations
- Companies in your area who export to the same countries
- Foreign embassies
- Freight Forwarders
- Trade publications
- State trade centers
- International Banks
- International Brokers
- Manufacturer’s Agents National Associations
The Interview Process
Once you a have a list of potential partners, it is critical that a vetting process takes place. This includes an extensive interview process that helps to screen and select your next foreign sales rep. The following three-part interview kit can be used: 1) a one-page fact sheet that describes who you are, what your company does, how you currently sell, your general commission structure, agreement policies, and an explanation that you are looking for international representation; 2) your company’s literature or catalog describing the product or service offered; and 3) a final questionnaire for them to fill out.
The questionnaire (the final piece of the interview process) is the most vital part because this will allow you to understand your potential partners’ success and/or failures. Questions include: company history, what import products do they handle, what export products do they handle, where do they make a majority of their sales, do they work with your competitors, how do they prefer to work, what territories they cover, what commission they feel comfortable with, how many salespeople they have, bank references, and client references.
Finally, it’s important to point out that you MUST visit your foreign sales rep in person before signing an agreement because you may be able to get a good sense of who you’re dealing with and the type of culture they represent. Plus, as you might have heard, consult an attorney familiar with international law experience as you might overlook something in the contract that can hurt you in the long run.
The Agreement
Agreements vary depending on your product or service or what country you’re exporting too, but below are the basic parts to an agreement that should not be left out:
- Responsibilities of the foreign sales rep and your responsibilities
- Term of contract
- Compensation
- Any bonus or incentive program
- Territory
- Pricing
- Warranty and Returns
- Does the rep have the right to use trademarks, patents, and copyrights in advertising?
- Marketing and Advertising
- Record-keeping
- Language
- Contract termination
- Arbitration
Note: the information above is credited to Start Your Own Import/Export Business by Entrepreneur Press and Krista Turner
