Choosing a distribution channel Once you have committed to exporting and have selected the market(s) to enter, it is time to determine who will sell your product, how they will sell it and how it will be distributed. Selection of Agents and Distributors Agency selection is a critical area of your export effort. You need an agent who knows the export market , has influence with the key buying personnel in the appropriate sectors and knows and is committed to your business. You should draw up a preliminary list with the assistance of exporters, embassy or export promotion agency offices abroad, or through friends or local Chambers of Commerce and banks. You may also decide to advertise in foreign local press and/or trade journals. Then write to the organisations and industrialists on this list, giving your firm's background and export objectives. Check if they are interested in handling your products and services, whether they act for competitors in the market, and their terms of commission. Their replies should form the basis of a shortlist to be used for interviews when you next visit the market. Trade and bank references should also be sought. The more usual distribution channels are: 1. Commission agent The commission agent represents you in the overseas market. He or she sells your product and feeds orders back to Ireland. You ship the goods and invoice the customer directly. When the customer pays for the goods, you pay the agent commission on the sale. This varies from 2% to 15% depending on the type of goods being handled. Commission should be included in the price quoted to the customer. 2. Importer/distributor Here, the importer/distributor actually buys the goods from you, stores them in a warehouse and sells them on to a third party. The mark-up is usually around 33%. With a commission agent you may have to collect payment from a variety of customers. Importers/distributors on the other hand actually buy goods, so debt collection is considerably simplified. Supporting Your Agent or Distributor Agents will only take your product line if they think it will make money for them. They must be convinced that it is a good selling proposition, that your company is efficient and committed and that you can supply sufficient quantities to make handling your account worthwhile. Support your agent to make the selling job as easy as possible. This may involve supplying selling aids, providing product and application training and enlisting the agent's advice and co-operation on market strategy, promotions etc. Above all, keep in close contact and remember that a neglected agent will neglect your product. Take Care! Do not rush to sign up with the first distributor or agent who seems interested or has the right contacts and resources. Make sure to build a very clearly defined trial period into the agreement and if possible, incorporate the minimum level of sales you expect from them over a specified period. Direct Sales Direct Sales involves supplying overseas customers direct from your factory, with all contact looked after by you/your company or by your own resident sales personnel based in the market. You must ensure that your overseas sales personnel have the support of an office and possibly an administrative assistant. Combining Alternatives In some cases you can use several of the above methods in conjunction with each other or consecutively. For instance, an agent to promote sales, and a distributor to handle physical distribution. Or the exporter might start out selling direct and subsequently appoint an agent or distributor. Choosing the Right Method Very few companies will be able to set up their own office immediately with resident personnel. However, this will often be the long-term objective in your main overseas markets. But do not get carried away! You are probably going to be thinking in terms of a distributor or agent, unless your product is such that you can identify a small number of large potential users whom you can serve directly from home. Even then, the customer abroad is likely to want the reassurance of having a local point of contact. enterprise-ireland.com . application training and enlisting the agent's advice and co-operation on market strategy, promotions etc. Above all, keep in close contact and remember. and possibly an administrative assistant. Combining Alternatives In some cases you can use several of the above methods in conjunction with each other or