INTERNATIONAL TRADE
A good agent can
open up the market Simon Bedford, Managing Director of SGB Associates (UK), discusses the important role of agents and distributors when trading overseas.
The appointment of an overseas agent or distributor can be a quick and low cost way to open up a new international market. However, there are many questions about the timing, how to find the right person, their role and responsibilities and how to motivate them to perform consistently well over the medium and longer term.
OUR WAY IN... Companies can start exporting directly without using a ‘middleman’. However, a local person on the ground in the form of an agent or distributor can bring results more quickly and is a continuous point of contact for you and your customers. Exporters, particularly those selling a service, can appoint a purely commission agent – companies selling a product ideally need a distributor who can stock items locally.
ENSURING GOOD RELATIONSHIPS If an agent is performing well, there should be a good relationship and communication between the customer, agent and exporter. The agent is simply identifying and ‘warming’ up the customer in return for an agreed commission. The alternative is for an exporter of products to supply and invoice the distributor who will hold stock, add their mark-up and sell to the end customer. The distributor may regard the customer as their client and not be keen to allow the exporter to build any relationship.
£56m of goods from Mexico in 2016, creating a trading relationship worth over £105m annually. Forty-three per cent of imports were transport and machinery equipment, and 19% from the food and beverage sectors. Speaking on the opportunities
that Mexico offers East Midlands companies, Laura Atkinson, Manager at the British Chamber of Commerce in Mexico, said: “Currently, more than a quarter of Mexico’s trade with the UK consists of manufactured goods. Unlike other countries in Latin America, Mexico’s manufacturing sector has had solid growth over the past years. This is not only due to NAFTA, but also because of low average labour costs, a skilled and
youthful workforce and various fiscal incentives. “Mexico is an extremely open
country, and has advanced dramatically over the past few decades into a highly skilled and stable economy, worthy of British investment. Many new sectors are still opening up, thanks to an ambitious reform agenda, and an increasingly global outlook. Instead of reacting to protectionism with greater protectionism, Mexico continues to expand its horizons in search of likeminded economies, as a source for its own growth. This makes now the ideal time for companies from the East Midlands to explore the many opportunities Mexico has.”
To learn more about export opportunities in Mexico, or to be referred to a British Chamber of Commerce in Mexico market expert, please contact Giles Jones, International Trade Networks Adviser at the Chamber, on 0115 957 8757 or email
giles.jones@
emc-dnl.co.uk
FINDING THE RIGHT AGENT AND DISTRIBUTOR There are many ways to identify good agents and distributors. This can be via referrals from other companies operating in the sector, exhibitions, trade associations, the internet and social media. Also useful in identifying a suitable partner is the Chamber network in the UK and overseas.
WHAT TO LOOK OUT FOR Agent and distributors usually immediately ask for exclusivity. Be cautious, consider a trial period, and do not offer too large a territory.
WHAT MOTIVATES THEM? If we put ourselves in the shoes of an agent or distributor we can understand that sales and profit are important. Equally important is support in the first year to establish the product or service in the market.
Simon Bedford (right) runs a range of export workshops and is author of “Exporting Made Easy”.
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business network April 2017 23
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