Selling to the Market
Deciding on exactly how you are going to sell your goods to your chosen markets can be a difficult decision. The right method of market entry will depend on the level of investment your business is prepared to make, your product, market conditions, the demands of your customers and the level of competitor activity. If you need any further information about Selling to the Market our trade advisers will be pleased to help.
Market Entry Options
- Direct Selling
Directly selling to the overseas market may be an option for some businesses who wish to employ a dedicated market sales person who visits customers regularly. This option may be not be the most time efficient unless you are clear where your customers are located and they are easily accessible. Direct selling is often a viable option for mail-order companies or businesses selling to ex-pat communities.
- Agents
An overseas agent can represent your business in your chosen market and negotiate sales on your behalf Agents have the advantage of being native speakers, with market, customer and competitor knowledge. The agent must operate within its authority and puts your business in contractual relations with new or existing customers, and is usually paid on a commission basis.
- Distributors
Distributors are also located in the overseas market and usually purchase a range of products from different suppliers which are resold to customers. Distributors usually buy minimum order quantities at discounted prices and are responsible for product marketing and after-sales. Distributors may operate exclusively within a specific geographic market or industry sector.
Useful Guides
- Selecting Agents or Distributors
This TradeYorkshire document looks at how to select an agent or distributor, the different types of agencies, the benefits and disadvantages of using either an agent or a distributor and some standard contract terms and conditions for agency agreements.
- Model Distributorship Contract: ICC Bookstore
This ICC book provides a uniform contractual framework for agreements under which the distributors act either as buyers and resellers, or as importers who organize distribution in the country in which they operate.
- Joint Ventures
Overseas joint ventures are an alternative to exporting and enable businesses to establish a presence in an overseas market. An overseas joint venture is usually established by companies seeking to share know-how, financial and organisational resources. There are different types of joint venture partnership which include a local distribution company, subsidiary of parent company, licensed manufacturing facility or franchise agreement. Read More
Useful Guides
- Overseas Joint Ventures
- Joint Ventures: identifying, establishing & managing
These UK Trade & Investment guides will help businesses considering a joint venture investment. Overseas Joint Ventures provides an introduction to joint ventures and examines how they can help your company to establish a presence overseas. Joint Ventures: identifying, establishing and managing provides an overview of the factors you need to consider and a guide to the advice, funding and support that UK Trade & Investment can offer to help your business become successful overseas.
- Licensing
A license agreement with an overseas company can offer a relatively low level of financial and management investment. A licensing agreement can enable a company to sells the right to use its ‘knowledge’, or intellectual property (patent, trademark or copy rights, or product or process know-how). Licensing is suitable for businesses that have developed new technologies or knowledge based products such as software and media industries.
- Franchising
Franchising can provide a business with wide market coverage. The franchiser provides the right to a company (franchisee) in an overseas market to set up a branded business operation. The brand, trademark, management and marketing of the franchised business are all contractually controlled by the franchiser who is paid a franchise fee. In return the franchiser can provide training and assistance with product and component sourcing.
- Mergers & Acquisitions
Acquisitions and mergers can be a very effective and expedient method of developing a global business. They can provide an opportunity to takeover a rival or competitor with an established workforce, infrastructure, brand and existing customers. However, identifying a suitable company and diligent management of the process, is essential to ensure that the investment is successful.
- Manufacturing abroad and Offshoring
Many businesses are setting up overseas manufacturing facilities in emerging and developing markets where there are lower costs in skills, and raw materials. R&D and sales functions may be retained in the home market enabling revenues to be returned to the parent business. Offshoring is the term used when a business relocates completely to a location in another country. These options are taken to enable businesses to trade more competitively and can offer access to wider markets.
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