basic-guide-to-exporting_Latest_eg_main_086196

Once your company has prequalified some foreign representatives, you may wish totravel to the foreign country to observe the size, condition, and location of theiroffices and warehouses. In addition,your company should meet eachsales force and try to assess itsstrength in the marketplace. Iftraveling to each distributor orrepresentative is difficult, you maydecide to meet each of them at U.S.or worldwide trade shows. The U.S.Commercial Service can arrangethe meetings; it also offersvideoconferencing, which can, inmany instances, replace the needto travel.Once you’ve gotten to know potentialforeign representatives, it’s a good idea—and, in some cultures, expected—for youto visit the country to meet potentialbusiness partners, as well as observethe size, condition, and location of theiroffices and warehouses.Negotiating an Agreement with a Foreign RepresentativeWhen your company has found a prospective representative that meets itsrequirements, the next step is to negotiate a foreign sales agreement. U.S.Commercial Service offices provide advice to companies contemplating that step. TheInternational Chamber of Commerce (iccwbo.org) also provides useful guidelines.Most representatives are interested in your company’s pricing structure and productprofit potential. They are also concerned with the terms of payment; productregulation; competitors and their market shares; the amount of support provided byyour company, such as sales aids, promotional materials, and advertising; training forthe sales and service staff; and your company’s ability to deliver on schedule.The agreement may contain provisions that specify the actions of the foreignrepresentative, such as:• Not having business dealings with competing companies (because of antitrustlaws, this provision may cause problems in some European countries)• Not revealing any confidential information in a way that would prove injurious,detrimental, or competitive to your company• Not entering into agreements with other parties that would be binding toyour company• Referring all inquiries received from outside the designated sales territory to yourcompany for actionTo ensure a conscientious sales effort from the foreign representative, the agreementshould include a requirement that the representative apply the utmost skill andability to the sale of the product for the compensation named in the contract. Itmay be appropriate to include performance requirements, such as a minimum salesvolume and an expected rate of increase.68U.S. Commercial Service • A Basic Guide to Exporting