Exporting Alliances and Logistics: Entering a Foreign Market (Essay Sample)

Exporting Alliances and Logistics
Name:
Institution:
Exporting Alliances and Logistics
It is important to have foreign sales agents or distributors when exporting products. Foreign sales agents are companies or individuals who represent a company to a foreign market and are usually rewarded in terms of commission which is depended on the total sales made. On the other hand distributors are companies or individuals who buy the products of the exporting company, attach a higher price than that which they bought at and sell the products in their local market.
The use of distributors and agents is a prudent way of entering a foreign market. Distributors facilitate the access to foreign markets by reducing the risks associated with international trade. In most cases the distributors are responsible for the transportation of goods and also the associated paper work required for goods to enter a foreign country. At the same time using agents or distributors helps the company avoid the costs of hiring and training new workforce to enter the foreign market. By having a distributor or a sales agent a company avoids the challenges involved in the exportation of products. Therefore using distributors and sales agents saves the company a lot of logistical planning required in order to conduct international business.
The Process of Making a Decision to Hire a Sales Agent or Distributor
The process of hiring a sales agent or a distributor to facilitate international business is very vital for a company keen on excelling in foreign trade. Once the decision has been made that a company will use sales agents and distributors to enter a foreign market, the next consideration is usually the identification of a suitable sales agent or distributor who will support the trade. The following is the process which a company can go through before making the decision to hire a sales agent or distributor to manage the export of their products.
Product support services is the first consideration to make. The company should gauge whether the distributors and agents will be able to provide the necessary support associated with their product. It should measure whether the distributors or sale agents will be in a position to test their products, do necessary packaging and manage customer feedback.
The next step is whether the sales agents and distributors will provide competitive prices for their products. The company should therefore deliberate on the establishment of prices, the discounts which will be offered, the distribution of catalogue and price lists to potential customers. The company in this context should take into account the cost of training of sales agents, the distributors and customers on the use of their product.
The company should also consider whether the sales agents and distributors will be in a position to engage in product promotions. They should seek to know the mode of promotion which the distributors and agents may intent to use. The effectiveness of the methods proposed should then be evaluated.
The company intending to export their products should also take into consideration whether the sales agents and distributors are in a position to provide inventory support. Inventory management, warehousing and credit extension to customers should be taken into account. This will help gauge the cost of conducting business in the foreign country.
The ability to handle distribution logistics and distances should also be put into consideration. The ability of the distributor or the agent to forward products as per demand, process orders efficiently and offer associated insurance to risks involved should be assessed. This will help evaluate the feasibility of the business in the foreign market (Schaffer, Agusti & Dhooge, 2014, p.16)
The services which the distributor or agent can offer to both the company and end customer should also be evaluated. The...