We often get asked which model to chose when going international. There are several forms, all with their own advantages and disadvantages.
Also be aware that in Europe there are differces in cultures, market sizes and other local characteristics. France and Germany may need a different approach then smaller markets like The Netherlands, Belgium and Denmark.
A few possibilities:
- Direct international sales from head office
This is often a low risk solution to see if a product can be sold outside the home market, useful when technical product knowlegde is scarce and needed, but may not be a good solution when there is lot of competition and local competitors have a better story and communicate in the local language.
- Agents and resellers
You give the right for a specific territory to an agent to develop a market in your name. The agent is not part of the commecial deal and often takes no responsibility for after-sales and strategic market development. This is often a good approach if the market is not strategic, difficult to approach and you want to generate revenue. Important is that in return for requested exclusivity the partner commits to targets.
- Distributors
Distributors take more responsibility than agents and should commit to good service, aftersales, minimum stocks, etc. To be succesful the distributor should have good product knowledge, be connected and should show commitment and financial strength to develop the market.
- Licencees
Not always posible, but the idea is that the licencee takes the right to produce the product in and for a local market. Interesting model, but you have to be sure the legal issues are very well covered and the partner will not walk away with a lot of product knowledge and develops your or a similar product without you benefitting.
- Subsidiary
A subsidiary means a large investment in administration, staff, legal issues and management time and risk. If the product or service has a large market potential, then it is absolutely worthwile and in the long run the best possibility.
Please get in touch to learn more about what form for which market would be the best start to international success. Of course, different markets may need different approaches and if you have the contracts right you can move from one model to the other and even combine models within markets.
