A random sighting of unique Italian sandals poolside in Miami Beach, Florida, turned into a successful exclusive distributorship for Joseph Reina, co-owner with wife Laurie and son Mike of Sensi Inc., a footwear distributor in Tempe, Arizona.
A friend of Reina's first noticed the sandals on the feet of a sunbathing American Airlines pilot in the summer of 1983. Upon further inquiry, Reina discovered the distinctive plastic sandals were produced by Sensi & Co., a footwear manufacturer in Italy. Convinced the sandals could take the U.S. market by storm, he flew to Italy to meet Lorenzo Sensi, owner and creator. There he formed the foundation for a healthy partnership and obtained the exclusive distribution rights for North America. In March 1984, the first shipment reached American shores.
Although the process went smoothly for Reina's company, it's not always easy for U.S. businesses to obtain exclusive distribution rights for a foreign product. The methods used to achieve that status vary greatly among companies and across industries. But according to Joseph Zodl, trade consultant and author of Export-Import: Everything You and Your Company Need to Know to Compete in World Markets (Betterway Books), the fundamentals are the same. "[The foreign company] needs an incentive to work with you on an exclusive basis," explains Zodl, whose experience spans 20 years. "The question then becomes, Why should [they] choose you over someone else?"
In Reina's case, that was accomplished in face-to-face meetings with Sensi; for many American companies, however, faxes and phone calls will suffice. To cover the bases, Zodl recommends you show the potential vendor the extent of your distribution channels and outline which stores you'll market the product to. Also, assure the vendor you have a capable sales force; prove your abilities by showing a track record. Determine your marketing strategy, and let the vendor know how much time and money you're willing to invest in promoting the product.
Most companies on the prowl for U.S. distributors will respond to inquiries within a day or two by fax, usually with pricing information. "Most people interested in exporting to the U.S. are very enthusiastic," says Zodl. If you need help finding leads, attend a trade show. Even if the event is held here in the States, you're bound to meet a handful of foreign companies seeking U.S. distributors. The U.S. Department of Commerce is another helpful resource for international trade information; contact the Trade Information Center at (800) USA-TRADE, or visit its Web site at http://www.ita.doc.gov .
More than a decade ago, Reina brought Sensi sandals to a receptive American market, selling 85,000 pairs that first year alone. For 1997, that number should exceed 250,000. Such phenomenal success, however, could never have been achieved without the strong bond Reina built with Sensi.
Says Sensi Inc. vice president Mike Reina, "You can have the best product in the world, but if you can't get cooperation from your [vendor] in a foreign land, you're not going to make it."
Forming a strong relationship with your foreign partner is essential. Trade consultant Joseph Zodl offers these tips to help you put your best foot forward:
- consent to a commitment you can't keep. If you won't be able to sell $1 million worth of widgets, don't promise it in the contract.
- expect the seller to know what you want. Never assume the foreign company understands your expectations.
- overemphasize the contract. Think business, not legal. Use the contract to lay the groundwork for the relationship.
- retain a customs broker. An experienced professional will help your foreign shipment meet the applicable regulations.
- conduct research. If you learn how business is done in a certain country, you can minimize problems.
- prepare to pay upfront. Most international shipments must be prepaid with a letter of credit.
Sensi Inc., 1769 W. University Dr., #175, Tempe, AZ 85281, (800) 537-5238
Joseph Zodl, (602) 906-0678, http://www.idt.net/~eximport .