Routes to market
Using an agent or distributor when exporting
What you’ll learn
- the difference between an agent and distributor
- the pros and cons for agents, distributors and fulfilment houses
- which option is the best for your business
How agents or distributors can help you
Using an agent or distributor is a relatively low-risk and cost-effective way of entering a new market. Experienced agents and distributors should have a wealth of local market knowledge and know the best way to get the maximum sales in the shortest possible time.
There are advantages and disadvantages with both, and the direction you take will depend on the market, your product and your overall objectives.
However, the foundation of success for either is a solid relationship between you and your chosen partner and a good quality agent or distributor agreement – where all parties are very clear on targets and business goals.
When to use an agent
Agents are individuals or organisations that sell your product on your behalf. They don’t hold any of your stock and transactions are made between your business and the end user.
With an agent relationship all promotions, after-sales service and fulfilment is usually handled by your business. Their main role is to generate sales, earning a commission as they do.
When to use a distributor
Distributors buy your products from you, usually in bulk and at a discounted price, and sell them on in the marketplace. They typically operate at a regional or national level and will hold stock locally, taking care of all logistics.
When to use a fulfilment house
The role of a fulfilment house is simply to hold your stock and despatch orders to your customers. All sales, marketing and after-sales care are still the responsibility of your business.
Fulfilment houses are particularly useful if you are selling overseas through your own website or through an online marketplace directly to the end customer.
Where to find agents or distributors
There is a huge amount of information available on agents, distributors and fulfilment houses on the internet. Dedicated sites will list agents and distributors by sector and country, or go directly to the trade association site in your market, where you should find lots of helpful information for exporters.