The establishment of your own agency in a country indicates to the public your intention to become a portion of the native business community and gives you a solid standing with the trade besides bringing you in closer and more intimate touch with the consumer. It has many other advantageous features which must be apparent.
Should your business not warrant such an outlay, the next best method of approaching the situation is the appointing of some high-grade, resident merchant, either foreign or native, in each country, as your exclusive representative. It is obviously unnecessary to state that in making such a selection the greatest care should be taken to investigate most thoroughly the business reputation and financial standing of the one appointed. Very often it is wisest to give your agency to some small, young aggressive firm, with limited capital, rather than to a staid old house with much money and prestige. These suggestions are given for what they are worth. Common sense will indicate the concern which in your good judgment is best adapted to represent you properly. Old established houses generally have the capital and means to introduce goods through the country and will often guarantee to place a certain amount of business within the year upon conditions to be specified. Once you have placed your agency, be sure to turn over all inquiries or orders received from within their territory to them for their attention. This I regret to state has not been typical of American houses and has done much to make responsible firms hesitate about accepting exclusive agencies. A strict adherence to this suggestion will tend to establish your honesty of purpose and will be deeply gratifying to your local representatives.
The house accepting your agency will have its own salesmen to travel the country and to introduce your line to the trade in addition to other appropriate means toward this end. They will be only too glad to have your representative accompany their local man from time to time and are highly appreciative of such an interest, because it stimulates both the customer and their representative and at the same time gives you the opportunity of knowing just what they are doing and what they have to overcome in the way of prejudice and competition. It is always well to aid the local agency with a small advertising allowance, to be spent as your combined judgments may dictate. This gives a further evidence to them of your desire to go after the trade and keeps their interest more intense on your line. Unfortunately too many American houses think that it is unnecessary to spend any money in advertising their goods in these lands. The sooner they take advantage of the advertising possibilities afforded by these virgin fields the larger and quicker will come the returns. Very often it is advisable to make specific allowances to the firm holding your local agency with a view to having their representatives make special trips in your behalf. These are, however, all details to be worked out advantageously between the contracting parties and will suggest themselves as conditions develop.
In the event of your organization having an export department, properly equipped to conduct correspondence in the native tongue and give direct attention to the banking problems arising as well as to shipping and forwarding it is advisable to have your own traveller, or travellers, to cover one or more of the countries or all of the territory involved. This keeps the home office in closer touch with all the details of the business and is to be commended in certain lines of trade but is only advisable when one’s foreign department is thoroughly perfected and in the hands of a competent manager.
Orders sent in by your traveller will contain such complete and specific instructions as to forwarding and banking that they can be intelligently handled at a minimum of expense with your own force. It should be observed however that your representatives for the first few years should make the entire territory once every twelve months at least, and oftener if conditions warrant, in order to keep your goods continually before the dealers and to engrave upon their memories that you are in the field to stay and wish to cater to them and their wants.
If conditions are such that you cannot afford a personal representative the commission export house offers opportunities for bringing your goods to the attention of the native dealer. There are many of these concerns situated in all of the larger cities of the United States; New York, New Orleans and San Francisco being especially well provided with them, owing to the fact that they are the largest ports in the East, South and West respectively and have excellent forwarding facilities. As a rule these firms are well supplied with capital and capable of rendering effective and efficient services. They are open, however, to the one objection that most naturally they will give the greatest attention to the line yielding them the largest profit, and just how to induce them to handle your goods to the exclusion of other competitors is a problem to be solved by you with the concern you decide to use for your purposes. Furthermore, it should be your express duty to see positively that your customer is thoroughly protected against the commission house making any additional charges or increasing the original price quoted by you to your client. This has been a common practice, and has had the effect of tending to retard business and prejudice trade in these lands.
As a rule these agents pay cash for goods when delivered, a feature which has its attractions to the manufacturer or merchant working on a limited capital and requiring his money promptly. Their financial connections are of a kind that enable them to do this, allowing a very small commission for their trouble. In addition to all these features they have a corps of experts familiar with shipping procedures, insurance problems, the routing of freight, packing, banking, as well as the details of foreign correspondence so that much of the complications and annoyances of the export trade is taken from your shoulders and borne by men familiar with the entire subject. Every few months it is the custom of many of these organizations to send their representatives through the entire Latin American territory with the idea of developing trade and receiving orders. There can be no question as to their place in this field or as to their general efficiency, and it is always well to discuss with some high class commission export house what they can offer your particular line when contemplating the possibilities of doing business in these lands.
A few American merchants have found it expedient to sell goods through their own representatives, turning the accounts over for delivery to some local concern for the purpose of forwarding the goods and making the collections thereon. While this may be advisable under some conditions, still it is not a practice to be commended and is only warranted when the local or native commission agent is of a high grade and financially responsible and where the purchaser is likely to impose upon the buyer through some of the many methods in vogue among a certain type of small native business men.
Rather than entrust the future of one’s business in the export field with an inferior representative, it would be better to co-operate with several manufacturers in allied lines, and send one man to represent the entire group. It is questionable if one traveller could do justice to more than five or six lines and they for obvious reasons should be related to each other, the principal idea being to economize the time and expenses of the one handling them. For example, a representative might carry neckties, shirts, collars, socks, and men’s underwear and hats, or such lines as corsets, stockings, ladies’ underwear and shirt waists might be effectively presented by one salesman.
The strictest care should be taken in the selection of the person to represent each group of merchants and under no circumstances should lines which might sooner or later develop into competing ones be allowed to be carried.