How to Find a Reputable Overseas Rep

First, determine exactly what’s happening in your target market. Then reach out to distributors and sales reps and consider hiring local salespeople. Once your volume is high enough, you might even want to buy a small distributorship

by Karen E. Klein

I have a small product line that sells well domestically. I'm looking for companies that will represent my products in international markets. Do you have any suggestions or resources for finding trustworthy, effective overseas reps? — J.R., Elkhart, Ind.

Decide which overseas markets you'll be selling in first. Next, thoroughly investigate what products similar to yours are currently selling in those markets. Are there prominent distributors selling similar products who might take on your product line as a way to leverage their current offerings?

Identify your potential customers in these new markets and figure out who they are already buying from. If there are resellers or distributors who have already carved out a comfortable niche with your customers, that's where you want to position your products, as well (see BusinessWeek.com, 8/13/06, "Going Global, Part I"). If you can't find someone already on the job, or current distributors are selling your competitor's products and can't represent yours too, advertise for distributors or sales representatives in industry publications.

"Making initial contacts in a new market is always difficult," says Desmond Delandro, vice-president of strategic alliances for the Silicon Valley-based software firm Ilog. "I would never set up a direct sales force in a country where I didn't know exactly what was going on. But you could advertise for distributors who would market your products to companies in a particular region, then set up a fulfillment arm within your own organization that would ship product internationally."

NAVIGATING THE CULTURE.

Another possibility would be to hire an overseas tele-sales company to do initial customer qualifications for you and then hire a salesperson in the region who could follow up on sales leads, or designate a salesperson at home who would travel to the area periodically, he says. "A telemarketing campaign could give customers the appearance that you've got a local presence, and its operators could set up appointments for your sales staff, who would fly in and meet with several qualified leads over a short period of time," Delandro says. Eventually, as sales volume warranted, you could base a sales rep in the region permanently.

Having a local already on the ground working for you helps immensely, as he or she will understand market nuances that an American will not, Delandro says: "It's not only language that becomes a problem, it's the behavioral characteristics of the culture in terms of how you make a sale. Some companies think that if they're selling in France, they can go into other French-speaking countries and sell—but no! Things are very different in France than they are in, say, Belgium or Switzerland. The same holds true for Asia (see BusinessWeek.com, 1/4/06, "Before You Set Up Shop in China…") and Latin America. So, you can't easily carve the world up into dialects and language."

If you choose to work through a local distributor, give their salespeople as much training as you can, so they will be able to effectively sell and support your products. "Even though you have to make quite a large investment in training and support, you won't have the infrastructure costs you'd have if you were to set up a direct sales force, which would involve overhead," Delandro says.

PARTNER POWER.

Because distributors are providing that infrastructure for you, expect their commissions to be high—around 40% to 60%, Delandro says. A technique his firm has often used is to start selling in a new region via a small distributorship. Once sales volume is high enough, his firm will buy that agency so that it becomes their direct sales force in the region. "When our foothold gets to a certain size and the distributor is generating, say, $2 million to $3 million annually, we'll acquire that company," he says.

Establishing a strong network of domestic and international partners also can help your company expand sales internationally. Partners often act as advisers or even distributors in areas where they are already established but your firm is not. Eventually, you may be able to return the favor as part of a strategic alliance. "What's important is for you to be able to go back, after a year or two or three in a certain area, and show that you have customers in the region. However you can manage it, you want success stories and you want to be able to point to revenue generated in that sector," Delandro says. Good luck!

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Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.