Doing Business In (Insert Country Name Here) - Department of ...

Return to table of contentsChapter 3: Selling U.S. Products and Services• Using an Agent or Distributor• Establishing an Office• Franchising• Direct Marketing• Joint Ventures/Licensing• Selling to the Government• Distribution and Sales Channels• Selling Factors/Techniques• Electronic Commerce• Trade Promotion and Advertising• Pricing• Sales Service/Customer Support• Protecting Your Intellectual Property• Due Diligence• Local Professional Services• U.S./Mexico Border Trade Initiative• Web ResourcesUsing an Agent or DistributorReturn to topMany U.S. firms find it useful and/or necessary to use a distributor and/or retailer todistribute their products in Mexico. They can be used to distribute products in variousregions and to a variety of business. Using a distributor and/or retailer is also efficientwhen products are required to be in stock and readily available.Some U.S. firms sell their products through a sales agent. Usually, a sales agent is afreelancer. However, some Mexican firms are interested in serving as sales agents forU.S. firms. Sales agent’s can be effective in reaching smaller cities and remotelocations in Mexico.Selection of an appropriate agent or distributor requires time and effort. There may bemany qualified candidates and U.S. firms should be careful and use high standards inorder to select a qualified and appropriate agent/distributor. Since most Mexican firmssell in a limited area, U.S. companies should consider appointing representatives inmultiple cities to broaden distribution. It is usually not advisable to grant an exclusive,national agreement. It is important to develop a close working relationship with theappointed agent/distributor. Providing appropriate training, marketing support, samples,product support, and timely supply of spare parts is critical for success. There are noindemnity laws to prevent a company from canceling an agent or distributor agreement,but the cancellation clause should include specifics and be free of vague language.Sales performance clauses in agent/distributor agreements are permitted, and failure tomeet established standards can be a reasonable cause for contract cancellation.