How to grow export sales through an agent

Growing export sales
File 17-11-2015, 17 27 03

Posted by

Thierry Bayle

Over 75% of Young Brands will consider there is no need to have any special skills nor experience in order to recruit, manage and securely grow export sales through an agent or a distributor.

As you are looking to identify an agent or a distributor?Well… be ready for a little surprise (or worse, a disaster!).

Have you already interviewed 5 to 10 Brands and asked them to give you their HONEST feedback on the good, the bad and the ugly when dealing with an agent? Remember, you MUST include the mistakes that the Brand has made, as it will be too easy to simply blame the agent or distributor.

HAVE A PLAN

To make this story a real success story, it is best to start with a plan.

Make sure you honestly answer the following questions:

1. Why do I want an agent?

2. To get the same results, could I do something else?

Come up with at least 1 to 3 ideas and assess the pros and cons, the cost savings or money opportunities, the difficulty level and then rate the various projects.

If you ultimately choose the agent search, then great – you have a plan. But before we build a house, we need the blue print, the piece of land, the money, the right people… let’s call these the foundations.

THE FOUNDATIONS

The same applies to the agent search.

1. You need a contract or letter of engagement.

The contract can be quite different depending on several factors, for example, a contract with a European agent will be very different than one with a US agent. If you are not in the know, TYB can help you highlight the differences and walk you through the possible pitfalls to keep you safe.

2. You need to know how to recruit, train, motivate and manage people.

For that, you need to ask yourself: “have I already managed agents? Have I gone through all the incidents that can happen to my Brand? How can I anticipate what will happen (once again, the good, the bad and the ugly!)?”. Managing agents can be harder than managing your own staff, as they are independent, and they are away from your home country working with a different culture, language, system and type of buyers.

3. You need to have quality time and availability to react promptly.

When the agent shows interest in your brand, you will not have the luxury to say that you are on holiday or having to handle a production and rush to China (or worse, say that you first need to finalise the agency contract with your lawyer for the next 2 weeks!).

4. You will need to have the back office organised and working well.

Until the agent starts, you may only need to know the principles in relation to logistics, payment, customer service, finance… but when he starts, execution will kick in and any discrepancy between what you sold to the agent and what is happening on the ground will create loss of faith and interest for your Brand. You could destroy your Brand value.

If the agent keeps your Brand despite poor execution, it is only because sales are happening without him having to do much anyway, or because you are giving him a showroom fee or equivalent.

Surround yourself with the right executives to set up the back office, or take our workshop to learn how to get it set up, before the agent or distributor starts. Remember that the back office is about tools, processes and training staff and partners alike.

You will also need to think about the following areas, which we address in our Agent Workshop:

  • Availability of the collection – delivery time – delivery drops
  • Price point and acceptable margins
  • Commission rate or distributor discount
  • Number of agents per country
  • Marketing budget for brochures, lookbooks, trade shows, PR
  • What to say and how to respond to showroom fee request from agent
  • Differences between a European Agent and a USA Agent (= sales rep)

 

TOP TIP: Over 65% of Brands consider the agent as a country manager. Agents ARE NOT country managers. They are not (normally) your marketing team, your logistics team, your credit management team… or anything similar. Relying on them to become these roles and asking too many questions on such issues will prove that you do not know the country you are selling to. If you see them as Country Manager, be ready for disappointment in the very near future.

EXECUTION

The recruitment of the agent is, for me, the tip of the iceberg. The big issue is what can’t be seen.

It boils down to Brand training, agent motivation, and organizing a smooth back office. The Brand and the agent are building a partnership, and the Brand cannot depend 100% on the agent, nor can the Brand cannot refuse to understand the market, the buyers, and the needs for marketing and investment. The back office will handle shipping, customs clearance (especially if goods are heading to the USA ), distribution, payment, customer service, trade show organisation, marketing budgets for brochures, lookbooks, payment of agent’s commission, return procedure… the job lot.

So, we need to set up some targets (even if they are not indicated in the contract). These measurable goals will give focus and structure to both parties.

For each target, try to answer:

  • what needs to be done
  • when it needs to be done by
  • who needs to do it

SEARCH FOR AGENTS

You can search for agents yourself, or you can recruit somebody to do it for you.

If outsourcing, make sure to have a proper brief – how do you want the search to be conducted? Email only? Email and phone? Who? How many? For how long? What happens if an agent does not get recruited after a season? What makes you believe that an agent will want your Brand? 3rd party providers can be very particular with details like these! Of course, you also should create a similar brief to use internally if you’re conducting the search yourself.

So. Is your agent your worst enemy? Of course not.

The agent is a valuable piece of the fashion puzzle, creating this necessary bonding between the Brand and the buyers. The agent gives you the opportunity to expand domestically and internationally.

  • Make sure you are ready (you, the brand and the organization overall)
  • Make sure you apply a good level of due diligence to ensure the partnership is right, and conducive to progress
  • Make sure you monitor progress very regularly

Is that what you are doing, and can you keep doing so consistently? If so, well done!

For further help on your international strategy or execution, please contact us.

Photo credit: D.Pawlak

 

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File 17-11-2015, 17 27 03
Thierry Bayle

Thierry represents our Fashion & Retail Business Development Team. We develop bespoke market entry strategies for companies in the fashion industry who are aspiring to export, or who already trade internationally. We also support retail businesses to ensure they are on the right path to success.

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