Industrial and commercial South America

by Annie S. Peck

During the War period when at times our goods alone were available, even poor methods and service brought results. That the continuance of such a course will be successful in the face of the severe competition now arising is too much to expect. A friendly Englishman long engaged in business in South America, in 1916 remarked that he was afraid the Americans would lose 60 per cent of their business after the War. A Peruvian the same year declared that they would lose it all; so much had he been disgusted by the arbitrary manner of some salesmen of the type who said practically, “There is the stuff. Take it or leave it as you like.” With a correct atmosphere in the home office and a more careful choice of salesmen such crudeness would be avoided.

If the heads of the office are unable to visit the countries, there is greater reason for wide reading. The “Movies,” which seem to entertain many, present pictures of a few phases of life; but it is not by such means that one acquires the intimate knowledge of a country and people essential for a proper conduct of trade. For agreeable and profitable relationship of any sort with those of other nationalities we must realize that they also have their point of view; we need to consider how they regard us. While we may believe our country to be the greatest and best, and our ways and manner of living superior, we must bear in mind that others are equally loyal to their own; though their country may be smaller and in some respects less advanced, its people are equally patriotic, they prefer their own way of living and methods of business where these are different. Many South Americans have a wider knowledge of the world, greater culture and taste, and these in general are more punctilious in manners and dress than the majority of Americans. We must therefore, while preserving our own tastes and ideals, have equal respect for theirs, cultivating a catholicity, a breadth of view, quite different from the spirit common among us, that everything different is thereby inferior, that we can teach the world everything, and that we have nothing to learn. Such an attitude is merely a mark of ignorance and provincialism.

Aside from visiting the countries there are many sources of information in regard to sales possibilities for any class of goods. The lists of imports of the countries and of some cities are available in commerce reports, with figures showing the approximate quantity and ratio of these. While the list of our exports seems to embrace almost everything, all of the goods are not sold everywhere; a knowledge of the various markets, of the prices at which goods are sold, and of trade conditions is necessary, to ascertain whether competition is possible and if there is a prospective increase of present business. Detailed information as to many lines of manufactures and markets may be obtained from consular reports, from the branches of the Department of Commerce located in a few cities, or by writing directly to the Bureau of Foreign and Domestic Commerce in Washington. Many persons have written to our Consuls in Latin America, often to their great disgust, for information, not merely such as might be procured in Washington, but what might be gained by looking in a geography or reading one of many available books. The Consuls are continually making reports with suitable information on matters which are within their province. Membership in certain commercial organizations gives the privilege of receiving trade information; the Philadelphia Commercial Museum, the National Association of Manufacturers, and the American Manufacturers Export Association, chambers of commerce, commercial clubs, trade associations, such as one of jewelers and silversmiths, all may be useful in this direction. The Pan American Union through its Bulletin and otherwise furnishes much information about Latin America. Export Trade Journals, other magazines and newspapers, are serviceable.

If from investigation it appears that there is a market for one’s goods in any section or universally, that quality and prices can be such as to make competition favorable, that the market can be enlarged, or should there be none that one can be created, and a determination is therefore formed to enter export trade, the next question is how the goods shall be sold. The methods are various, but of only two kinds: the direct and the indirect.

Direct methods include the establishing of branch houses; the appointing of a general agent for one or more countries or of a local agent for a limited territory; the employment of traveling salesmen; and advertising in circulars, newspapers, or magazines, for mail orders to be filled by freight or parcel post. The choice of methods, and the appointing of agents or salesmen demand the greatest care. Exclusive rights of sale have been given for the whole continent to a South American, incompetent even to take care of a small district. Salesmen have been appointed from the home office who perhaps had done well here but were utterly unfit for work in South America.

It is desirable to have representatives of our own nationality. Others if employed solely by an American Company may do their best for it, but we now know that many Germans, possibly others, have taken agencies for the sole purpose of keeping the goods out of the market. A good salesman or agent of any sort should have as his first qualification ability to speak Spanish fluently, unless his work is confined to Brazil, in which case of course he must speak Portuguese. Next he should be a gentleman and simpático. The spirit which led some youths in the early days in Panamá to call the residents niggers, monkeys, and savages is one which, though not indulged in outwardly to such a degree, is sufficient to prevent the harmonious relations necessary to make permanent, satisfactory business dealings. Unquestioned integrity, unfailing courtesy, patience, tact, straightforward action, are all highly important qualities, as well as those essential from a strictly business point of view, such as critical knowledge of the goods, etc. Confidence and friendliness count more in South America than at home. Social qualifications are desirable. It has been said of the British that they were too cold and exclusive, that the Germans were more friendly. On the other hand, some Americans have felt that the South Americans did not care for more than a business acquaintance. This is doubtless true in many cases, but one who is cultured, sympathetic, and well mannered is likely to have social opportunities which he may accept to advantage.

Branch houses will best serve the large manufacturer, giving a standing not otherwise attained, and best promoting permanent relations. From these houses salesmen go to neighboring territory. The manager must be a man of wide experience, familiar not only with the product and home matters, but with the language, customs, and business methods of the country in which he is located. Some corporations engage business houses in different sections as local representatives or distributors, with exclusive rights in restricted territory. Such arrangements, supplemented by advice and literature from the home office may prove effective in securing sales.

Those who cannot afford branch houses or the risk which may attend the cost of a traveling salesman’s exclusive service are now able through the Webb-Pomerene law to coöperate with other houses in the same or in associated lines of industry. Both investigation and sales may thus be profitably conducted. Advertising only, without the employment of other agencies, has been highly profitable to many. It is said that advertising in South America brings better results than in the United States. To avoid utter waste of money careful investigation as to sales possibilities and media should be made before planning a campaign. One large mail order house has carried on an enormous foreign business. Other firms have accomplished much in a similar way. Advertising is done in journals and magazines published here and circulated there, in local publications of various kinds, in moving-picture houses; also by means of mailed circulars, and to some extent by electric signs.

The importance of correct technical and idiomatic translation in advertising in Spanish and Portuguese cannot be over-estimated. Gross and ridiculous errors have been made in the past. A book knowledge of languages seldom prepares one adequately for such work. Foreign translators are more numerous than formerly, but they, also, too often make egregious blunders; not of the same character, but caused by their not comprehending exactly the English which they translate.

If indirect methods of trade are preferred as involving less risk, trouble, and preliminary expense, and if the medium is carefully chosen, it may be more profitable. Export commission houses or export agents will relieve the manufacturer of almost all care. One large commission house not only acts as selling agent for manufacturers through its branches in many parts of South America; it also operates steamship lines, carries on banking and exchange, and handles important financial transactions for South American Republics. Certain firms of national or worldwide reputation and large capital have for many years been satisfied to conduct their foreign trade through such a house. The opportunity for commission houses of this sort was not overlooked by foreigners and one company of these in New York did an annual business of $30,000,000 before the War.