DISTRIBUTOR SYSTEMS-KEY TO NEW MARKETS

TRADE IS TRUST, SAID PAUL STABLER, PRESIDENT OF THE EXPORT GROUP,  INC., A GLOBAL CONSULTING FIRM FOR COMPANIES ENTERING WORLD MARKETS, AT THE RUSSIAN IMPORT/EXPORT SEMINAR HELD LAST WEEK AT THE COCA-COLA COMPANY’S WORLD HEADQUARTERS.

 THIS MAXIM REFERS TO THE OFTEN FRAGILE RELATIONSHIPS ON WHICH BUSINESS DEPENDS.  HAVING HANDLED EXPORT SALES AND FOREIGN DISTRIBUTION FOR AN ARRAY OF COMPANIES INCLUDING FORD MOTOR AND 3M, MR. STABLER HAS EXPERIENCED FIRST HAND THE NEED FOR COMPANIES TO DEVELOP CLOSE RELATIONSHIPS WITH DISTRIBUTORS.

KNOWING YOUR DISTRIBUTOR IS THE KEY TO ENTERING THE U.S. MARKET, HE TOLD THE 100 RUSSIAN BUSINESSPEOPLE.  AND KNOW THE DISTRIBUTION SYSTEM.

HIS ADVICE FOR THE RUSSIANS APPARENTLY IS UNIVERSALLY APPLICABLE, ACCORDING TO SEVERAL OF THE SPEAKERS AT THE SEMINAR. CONTROL, CONTROL, CONTROL OVER PRODUCT, PEOPLE AND THE MARKET IS TO TRADE WHAT LOCATION, LOCATION, LOCATION IS TO REAL ESTATE, SAID JOHN DICKINSON, PRESIDENT OF INTERNATIONAL MARKETING IND., WHO STRESSED THE NEED TO MAINTAIN CONTROL OVER A PRODUCT IN THE MARKETPLACE AFTER IT LEAVES A COMPANY’S WAREHOUSE.

BUT WHETHER OR NOT EXCLUSIVITY IS THE BEST WAY TO INITIATE CONTRACTUAL RELATIONSHIPS WAS A POINT OF CONTROVERSY AMONG THE SPEAKERS.

I’VE BEEN CAUGHT ON BOTH SIDES OF THE FENCE, SAID FRANK CHILLEMI, DIRECTOR OF CENTRAL EUROPE FOR LANIER WORLDWIDE.  MR. CHILLEMI EXPLAINED THAT HE CONTRACTED WITH A COUPLE WHOM HE THOUGHT WERE REPUTABLE DISTRIBUTORS, ONLY TO FIND OUT THAT THEY WORKED FOR HIS COMPETITION AND WERE ABLE TO KEEP LANIER PRODUCTS – COPIERS, FACSIMILE AND DICTATION MACHINES, ETC.,  – OUT OF  THE MARKET FOR 12 MONTHS.

ON THE OTHER HAND, IN THE CZECH REPUBLIC HE HAD A NON-EXCLUSIVE CONTRACT WHICH HAS BEEN VERY SUCCESSFUL AND NATURALLY EVOLVED INTO AN EXCLUSIVE CONTRACT.  DON’T ASK FOR AN EXCLUSIVE, BUT LET YOUR RELATIONSHIP WITH A SUPPLIER GROW INTO THAT.  OTHERWISE YOU MIGHT NEVER GET THE ORIGINAL SALES AGREEMENT TO REPRESENT OR DISTRIBUTE  AMERICAN PRODUCTS, HE TOLD THE RUSSIANS.

WILLIAM POOLE, AN ATTORNEY  WITH THE ATLANTA LAW FIRM OF BRANCH, PIKE & GANZ, EMPHASIZED THE LEGAL IMPORTANCE OF DISTRIBUTION AGREEMENTS IN WHICH BOTH PARTIES BENEFIT.  KEY PROVISIONS OF AN INTERNATIONAL SALES REPRESENTATIVE AGREEMENT IS A DOCUMENT PROVIDING A CLEAR UNDERSTANDING OF RESPONSIBILITIES AND WILL BE A ROAD MAP FOR YOUR RELATIONSHIP, HE SAID.  DEFINE YOUR RELATIONSHIP AND DOCUMENT IT.