International Export Distribution

Export success depends on many factors. As a grower or processor, you will need an effective way of getting your goods into and distributed in the export market. Options available include doing it yourself (direct exporting), using third-party intermediaries, and partnering with other firms already in the market.

Frequently, new exporters will consider undertaking the export process themselves. In most cases this decision is prompted by a concern to save money or avoid sharing any profits. Firms contemplating direct exporting
should know that, to be successful, they will need to devote the necessary resources to accomplish the following basic tasks:

• Choosing the foreign market
• Performing all market research
• Developing pricing and promotion strategies
• Choosing representatives in target markets
• Arranging for physical distribution and export documentation
• Handling billing and collection, including taking foreign exchange risk

To implement the right strategy, you need reliable information. By talking to the XL Group, an export management company with over 20 years of experience in export, you will obtain important information to make a decision on which markets to approach, even before implementing any strategy. This introductory counseling is an effective way of gathering precious basic information to allow you to take informed decisions.

We can provide information about:

• Potential partners, agents, distributors
• Cultural aspects, which are relevant to sales and marketing of your products in the target market
• Government and regulatory contacts, among other important decision makers

Foreign distributors actually purchase the exporter’s product and resell it to local customers. A distributor frequently sets the selling price, provides buyer financing, and looks after warranty and service needs. A significant advantage of using foreign distributors is that they are often able to provide after-sales service in the foreign market. A downside of using a distributor is that the exporter usually will experience less control over product and price.

Selecting a Distributor: Many avenues are available to help you select a foreign agent or distributor.
Some of the services we offer are:

• Business Development, Marketing and Sales
• Trade shows in foreign markets
• Trade missions, geared to a specific sector, and often combined with a trade show participation
• Market research services, such as the Specific Market Survey or the Customized Market Profile

Once you have developed a list of candidates to sell or distribute your product, you should visit the market to meet with potential agents or distributors. Again, XL Group can assist you in setting all these appointments and doing the necessary arrangements for you. The following checklist will help you determine if the agent or distributor meets your needs. Talk to several firms and check their references to ensure that you find a reputable agent or distributor. You can also protect yourself by entering into a limited-term trial agreement. If the foreign intermediary does not meet your expectations, you can find another firm after the trial period is over.

Checklist for Evaluating an Agent or Distributor

• How many companies/products have they successfully represented or marketed?
• What is their financial condition?
• What kind of local business representation can they provide?
• What possible competing exporters they currently represent?
• What marketing and promotional programs do they have in place?
• Who are their current customers/clients?
• Do they provide after-sales service?
• What are the terms and conditions of sale and payment?
• What are their terms of payment?
• What is their geographical coverage?
• Are they centrally located?  Easily accessible to you?
• How many salespeople do they employ?
• Do they use sub-distributors?