Comparing Export Partnerships


Advantages Disadvantages
Sales Representatives
  • Local knowledge of customers
  • Local knowledge of laws and regulations
  • Payment to agent only on sales commissions
  • High cost of product promotion
  • Invoicing and credit control is in house; not with the agent
  • Inventory is not with agent
  • Unable to service product after sale
Distributors
  • Local knowledge of customers
  • Local knowledge of laws and regulations
  • Low market expansion and visibility costs
  • Can service product after sale
  • Reduced time to market
  • Possible brand image dilution
  • Low control over distribution vehicles
  • Low control of sales prices
  • Conflict of interests
Licensee
  • Spreading risks and costs
  • Very low manufacturing and distribution costs
  • Verification of licencing agreement
  • Low control over quality
Strategic Alliance
  • Low development costs
  • Greater information exchange
  • Conflict of interests

© 2016 John Michael Pierobon

Notes