Working With An Intermediary For Your Export Strategy

November 26, 2021

Entering new markets can be challenging for small or medium sized businesses regardless of the country they are located in for a number of reasons.

Especially considering the diversity of markets in the world; in addition to choosing the right market, there’s one big question for SMEs to find an answer to: how to enter those markets.

That you are an SME with limited resources and know-how doesn’t mean you’re not eligible to grow abroad. With smart moves backed by a flexible strategy you can easily make your name known in your target country. To do this, it doesn’t necessarily take a big effort, time and money; It’s just about using your resources efficiently which brings us to the subject I’d like to share with you: choosing your intermediary as a part of expansion strategy.

Having done your research on defining your target markets, you end up with different countries in terms of proximity, market size, culture, business manner and economic situations. As a not giant company you still have an option entering those different markets: splitting the export modes. It can be a good plan exporting directly to the markets you can operate by yourself, and partnering with intermediaries for the countries you’re not familiar with and you don’t want to take risks.

How to choose the best intermediary?

While there are various intermediary types, it’s the desired way of work that counts. The first thing to do is choosing the intermediary that suits your policy well. Is it going to be a distributor, agent, broker, export house or another? In any case there are common crucial points that you have to take into consideration by choosing your intermediary.

  1. Who is the intermediary? Is it experienced in your sector or just a marketing pro?
  2. How well does it know the local market? Can it brief you about the competitors, prices and smart insights for the growth potential?
  3. Does it have network or a team around the country? Does it have any sector-related memberships?
  4. Is it financially eligible for promotion, pre/after sale service, travel or so?
  5. Does it have required permissions and certificates for export-import and running the business smoothly?
  6. Has it ever been sued or any case going on?
  7. Does it also sell the similar products of your competitor? If so, it can bound you with a contract that is in its favour and buy your product in minimum quantities and doesn’t promote it appropriately just to keep you out of the competition and sell the other brand. Be careful about that; make your research diligently and sign a fair contract.
  8. Request some kind of proof that it has succeeded in the business.
  9. Examine the chemistry between you and your prospective partner. Do you feel you will get along well or not?
  10. Explain yourself: what your expectations are, where you want to see yourself in 10, 20 years, what your vision is… And pay close attention how it answers in return, I’m not saying you read mind but listen to your intuition.
  11. Be very specific and clear on the working terms and conditions from commissions to promotional expenses, services, customer relations and so on.

In a nutshell,

Reaching target markets by your own means can be very costly and result in you losing control and failing even more. Therefore, working with intermediaries in appropriate situations can add value to your business. Never hesitate to ask all the questions and make sure there’s no hindrance for a partnership. If you don’t do it in the first place, the troubles, regrets and surprises may follow you forever.

When all the questions are answered in your favour, you have completed the first step of a promising business.

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