Foreign agents are often hired by Canadian companies to represent them in overseas markets as the agent has a knowledge of the business practices, language, laws, and culture. Agents perform a number of functions such as:
There are different types of agents. The one you choose to hire is based upon how much you want the agent to do for you and how much you are willing to pay.
Distributors are very much like agents except that they purchase your product and then resell it in the local market at a price that they determine. Often, they will also provide after-sale service. However, you do lose a portion of your profit and have less control over your product and price.
Partnering, often referred to as a strategic alliance, is used by many companies in order to break into a foreign market. It is sometimes used to circumvent import restrictions and other trade barriers in foreign markets, or it can be used in a complimentary way when each company has expertise that the other can benefit from. There are various methods of partnering:
A trading house serves as a broker for foreign buyers looking for Canadian goods and helps Canadian companies get their products into foreign markets. Trading houses offer a number of services such as:
For a listing of trading houses in Canada as well as descriptions of the products and countries they deal with, visit the Canadian Federation of Trading House Associations website and click on Canadian Trading Houses on the left hand menu bar.
A company may elect to sell their goods directly, thereby cutting out the middleman and increasing their profit margin. This method could work in an area where the market is similar to the one you are familiar with and there is no language barrier. For example, if you were exporting to the northern US, you may choose to sell directly. However, if there are significant language and cultural differences, the money you spend researching the market may be better spent retaining an agent or other type of representative who is already familiar with the language and business practices in the country you have targetted.