When you take the plunge into exporting, no decision is more important than who you select to represent your company in another country. "The agent or distributor you contract with in a foreign country becomes your presence there. If they don't have a good reputation, you won't either," says Frank G. Long, an attorney with Gust Rosenfeld PLC in Phoenix.
Knowing the person before you get involved is key to hiring a good agent. Start by getting referrals and talking to some of the agent's other clients, particularly international ones. Also find out what kind of business entity you're dealing with. If it's a corporation or a partnership, who are the other members? What other lines of business do they represent? Where do they do business? This can affect which laws apply to your relationship. It's also important to make sure your contact has the authority to make binding agreements. "Sometimes the person you're meeting with may not be the person who's calling the shots," says Long.
To be extra safe, consider hiring a private investigator. "You're not trying to dig up dirt," says Long. "You just want to know who you're dealing with." Be sure to inform the agent you're doing an investigation; if he or she hears it from the investigator first, says Long, "that could abort a potentially useful relationship."
Investigating an agent doesn't have to be expensive. Start by contacting the U.S. Department of Commerce; according to Long, that's a good place to start to get general information. Then move on to a private investigator for more detailed data. When selecting a distributor, it's always better to be safe than sorry. Says Long, "Not doing any investigation is just flying blind."
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