How to find the right overseas agent

Colin Crabbe, the International Trade Manager with BGIT, is a highly experienced exporter with over two decades of first-hand familiarity in diverse markets in Africa, the Middle East and the Far East.

Drawing on his own experiences, Colin is a regular contributor to this website with practical articles to assist the inexperienced exporter. Here he presents some thoughts on the problem of identifying the right overseas agent...

"Appointing an overseas agent or distributor is one of the greatest expressions of trust you can ever make in business. Hopefully, all goes well and your appointed agent proves in every sense a proactive and productive ambassador for your company.

Sadly, it doesn’t always work out as well as this. I have seen companies where, after a promising start, things go all wrong. A really good salesperson leaves, for example, and isn’t replaced; or their replacement isn’t as successful, and business falls away.

It’s a hugely traumatic and difficult process to exit a distribution agreement in local courts under such circumstances – so here are a few ways in which you can make sure you are picking a compatible long-term partner and continuing to get the best out of them.

I find it helps to approach the selection process on three different levels – the company, the general manager and the field sales people. There are different techniques that work with each level, and it greatly simplifies the whole process to segment it like this."

Vetting the company

"In the first place, don’t feel at all inhibited about really grilling a prospective agent or distributor. If they are sound, they will expect you to be thorough and they ought to have no problems about supplying you with all the information you are looking for.

So ask them for a business profile and some references - and then make sure you actually take up every reference. In my experience, overseas business referees take their responsibilities very seriously – the whole process is a staple of international trade, after all.

So pump the referees for their financial experiences with your prospective agent, and invite them to give you their considered overall view of the company.

A few calls like that and you will find you quickly have a good feel for the capability of your prospective agent. Study the technical quality, too, of the company profile which he gives you – does it give off the right image? And remember to ask about recent contract awards to see how active the company really is.

Then, when you come to make an in-market visit, continue your enquiries. It is vital that you get reassurance that they are financially sound and pay their suppliers on time. So check this out when you go out in the field with their salespeople – and check out that they get their salaries on time, too. When staff and suppliers are being paid bang on time, it’s always a good sign of financial stability.

While you are going through this process of vetting your agent, you should make it clear that you are not prepared to enter into any formal agreement until you are quite happy with the arrangement. Again, if your prospective agent is reputable and experienced, he will have no problem with that and ought to be quite willing to agree to a letter of intent for a reasonable trial period prior to entering a full-blown agreement.

One of the other important things to remember is that, although you will initially do a lot of these negotiations with the owners or directors of the agency, they quite often are not the people who will physically get things done for you once you are up and running.

That will be the province of the general manager – and, from my experience, he is well worth cultivating in his own right."

Look after your agent

"There is so much a good general manager can do for you if he is really onside with your products or services.
For a start, if he is to be your main contact, how accessible is he prepared to be? Can you contact him at short notice if there is a problem to be nipped in the bud? Can you call him out of office hours?

You should really view them as a sort of souped-up travel agent, someone you can contact pretty much whenever you have to.

And are they really keen and enthusiastic about your business, and willing to devote time to learning what your products or services are really all about? Not only do you need someone in the local market with that degree of expertise, but their capability will also rub off on the sales and distribution people, and they will all take your business more seriously.

General managers, I have found, usually have a travel budget – so you may well find that it is possible to invite the general manager across to Scotland for a works visit. A previous company I worked for used to do this regularly – we would fly up our agents from London to Edinburgh, keep them up-to-date with all our latest developments, have lunch in the boardroom with our directors and even lay on a little bit of training while they were there.

Most important of all, we would also show them all the sights of Edinburgh and, if we could, even take them to a Highland Games. The Scottish goodwill factor is one we should never hesitate to play – these trips were an unforgettable experience for our overseas agents."