Employees/Contractors, Reps or International Distributors

Ed Marsh | Feb 18, 2011

So you are going to sell into global markets.....congratulations.....how??

Simple but not easyas the saying goes.

You need representation, and it must be local. You will not understand the nuance, process, procedures or unwritten and assumed communications and issues in foreign markets. Remember that this business development effort will be a proactive one - not simply answering periodic web, email and telephone inquiries.

You must use a local presence to begin the hard work of building brand awareness, reassuring prospects that you have a long term intention (e.g. ongoing after sales support) and commitment to that market.

Overwhelming hardly describes the challenge of starting from scratch and identifying potential employees(proper skills and experience match, with appropriate language capabilities, high likelihood of corporate culture match and importantly trustworthy and honorable to work full time and respect company resources - thousands of miles away with essentially no direct supervision.) What local labor laws demand compliance; what is required for permitting; will you open an office; how do we add phone lines; what holidays should we anticipated; how do we manage FCPA concerns with such an autonomous employee, etc., etc., etc......

"Fine, I get it.  This is too big a minefield...but what are my alternatives?" you ask?  Naturally distribution is a standard solution.  Alternatively representatives can provide a different outsourced model.

Yet distribution is a challengefor most manufacturers in their home market.  Competing for mind share and finding channel partners that will invest financially and emotionally as equals in a relationship are difficult:  finding companies who will manage broad participation from their staff (rather than a small interested minority) and will proactively develop a market (rather than simply poach opportunistically) is nearly impossible.

Reps are often very narrowly (market and geography) focused - that can be a desirable attribute as you try to fill specific gaps in coverage, but creating a broad network can be unwieldy.

But what about taking the best of both worlds?As global trade develops and companies stretch to establish market presence in foreign markets there is an increasingly common hybrid solution which may be an option.  A company on the ground, in the foreign market, may have particular expertise in facilitating the start-up logistics using one of several models.  One of the most innovative models is contracting a full time employee - with local supervision and infrastructure.  In essence a company in the US which wants full time focused representation on the ground without the HR and operational considerations engages the services firm to recruit and hire an employee with the agreed skills.  That employee (of the foreign company) is committed fully to the US company and their full daily focus is according to the development activities established by the US company.  With IP telephony, CRM in the "cloud" and email, they function as an employee yet the burdens of supervision, internal controls, logistics and operations are all managed transparently by the real employer on behalf of the US company.

A great example can be found here.http://www.sellpackagingtoindia.com/theinvenioprogram.html

So, quite simply, there is no good answer. But there is a clear answer - you must decide on the least challenging model and proceed.  You can't manage from behind a desk in the US.

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