Once the firm has identified markets in which to use agents and distributors, it can locate these intermediaries by using various sources: government trade offices (the Department of Commerce in the United States), chambers of commerce, trade shows, international banks and other firms, trade and professional associations, and advertisements in foreign trade publications. After identifying potential agents and distributors in each desired market, the firm should write directly to each, indicating its interest in appointing a representative and including a brochure describing the firm’s history, resources, product line, personnel, and other pertinent information (Table 5.2).
Evaluation and selection of potential representatives (agents or distributors) is often based on some of the following factors: local reputation and overall background; experience with a similar product or industry and adequate knowledge of the market; commitment not to represent competing brands; and genuine interest and ability to devote sufficient time and effort to the product line. In the case of distributors, it is also important to evaluate sales organization; financial, marketing, and promotion capability; installation and after-sales service; timeliness of payments; and similar characteristics. Once the firm has selected an agent or distributor based on these criteria, the next step is to negotiate a formal agreement. Foreign representatives are also interested in firms that are committed to the market and willing to provide the necessary product support and training. They also want to protect their territory from sales by third parties or the firm itself.
Source: Seyoum Belay (2014), Export-import theory, practices, and procedures, Routledge; 3rd edition.