Growing Your International Business with a Local Presence

By Joe Robinson

While attending a recent social event, I spoke to the guest of honor who has spent 42 years of his career in international commerce. He successfully promoted and exported fine chemicals and plastics.

During the course of our conversation, I asked him to give me pointers on major techniques that he attributed to the growth of his overseas sales.

"Good reps and distributors," he said. "I found good ones and paid attention to maintaining an ongoing relationship.

"Local presence is a major key to growing any business," he added, "especially in the international arena. In addition to generating orders, our reps are our eyes and ears in their respective markets."

I asked him how he found good reps and how he keeps them performing as part of his business. "Trial and error," he replied, "but you don't have to do it this way. There is an easier way to do this that will most likely produce faster and better results."

Here's his formula:

First, you must understand the importance and impact of a presence. Then you need to implement a step-by-step approach that defines, finds, evaluates, appoints, trains, and motivates your local rep or distributor.

Each of these steps is an important part to the process. If any one of these steps is missing, then the quality of your reps will depend more on luck than skill.

Let's look at each step in detail:

1. Define what a successful rep must be and do to grow your business in his country. Listing both necessary and preferred attributes is helpful. This becomes a de facto job description that enables you to compare potentials reps when you enter a new overseas market.

2. Find several potential reps that meet your definition of a successful rep. Your search may include referrals from trade organizations, information from the U.S. Department of Commerce Partner Service, and advertisements in journals, newspapers and trade shows. A favorite technique this businessman used is to ask customers who they might recommend as an ideal rep for you.

3. Evaluate potential reps carefully. Obtain good references from their current customers as well as your own potential customers, if possible. Carefully weigh the attributes of the potential reps and review how their strengths and weaknesses fit in your organization.

4. Appoint your rep of choice in a professional and positive manner. Draft your own agreement and be positive in your cover letter. Remember, you are the principal. Be sure to clearly state your expectations in the letter and welcome the rep to your "family." Let your rep know that you anticipate that both of you will grow and prosper by working together.

5. Train your rep. Empower your rep's staff with knowledge of your company philosophy, your products, and a good understanding of how your customers use your product.

6. Motivate your rep. Keep her informed. Provide your rep with a generous supply of literature and sales aids to help her do her job for you.

Your success in international commerce depends on having good representation of your company and products in your target countries. By following the above six techniques in locating good reps and distributors, you have the potential of increasing your overseas markets and growing your company.

Mr. Robinson's bio

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Customs Focus:
“Operation Shield America”

By Hank Selby

As discussed in an earlier column, U.S. Customs has become increasingly focused on enforcement efforts related to the war on terrorism. Most of the articles featured in the national press, and even on the U.S. Customs website, have to do with Customs’ effort to stem the flow into the U.S. of illegal drugs and items that could be used in terrorist activity. Less noticed, but still a vital part of Customs’ mission, is their ongoing effort to control illegal exports.

Customs has actually been involved for many years in export enforcement initiatives. Most basic has been Customs’ involvement with the collection of data and the enforcement of export licensing requirements through the filing of U.S. Shipper’s Export Declarations (SED). This document is filed whenever any export (other than to Canada) with a value of $2,500.00 or more per product classification is made (Schedule “B” or Harmonized Tariff Schedule of the U.S. categories).

Whenever any product with a validated export license is exported, the number of that license is required to be entered in the correct block on the SED. (Goods are subject to licensing for many reasons, such as national security, foreign policy, anti-terrorism, etc.) This theoretically would enable Customs to keep track of all licensed product that has been exported. However, before January 1, 2000, exporters were allowed to file SEDs post-departure, which effectively meant that any possibility of stopping illegal exports based on SED data was non-existent.

To attempt to plug this gap, Customs initiated “Operation Exodus” in 1981. This initiative attempted to plug the information gap by, among other methods, investigating the exports of commodities that could possibly require an export license but which did not show a validated export license number on the SED. This effort, like many of other Customs’ initiatives, was undertaken in cooperation with other agencies like the U.S. Department of Commerce, who also held jurisdiction over U.S. exports. Customs also has placed agents in foreign countries to investigate illegal exports and diversion of U.S. products.

The information gap that existed between the departure of U.S. exports and their reporting was plugged, at least in theory, with the implementation of the Automated Export System (AES) in early 2000. With AES, information about what is being exported must be reported to both Customs and U.S. Census before departure. If all products are accurately classified and reported, then Customs should be able to stop any potentially illegal export for inspection before it is shipped. However, to date, Customs does not have the manpower or IT support to make this happen 100 percent of the time. Moreover, this does not address the situation of deliberate misclassification of exports to avoid controls.

To help address this hole in our export security, Customs announced “Operation Shield America” on December 10, 2001. This initiative seeks to keep terrorist organizations from obtaining U.S. technologies, weapons, precursor materials, and any other components of weapons of mass destruction by means of illegal exports from the United States.

A large part of this initiative includes a partnership with U.S. industry. Everyone can understand that weapons are not allowed to be exported without an export license. However, there are many other products that may appear innocuous and have normal civilian applications, but which still have enormous strategic importance. These types of products include components that are used in manufacturing of weapons or used to control weapons. Many companies currently manufacturing or distributing these products may not even be aware that their products could have strategic applications.

Customs has already compiled a list of these strategic products and technologies. Now they are identifying specific companies engaged in their production and distribution. As this article is being written, Special Agents of the Customs Service are visiting these companies and discussing these exports. When appropriate, they suggest strategies to avoid illegal exports and, most importantly, how to identify companies and individuals who are trying to acquire these products through what appears to be a domestic sale.

Every manufacturer and exporter in the U.S. needs to be aware that there are groups trying to acquire products and technologies to harm the U.S. Equally important, every manufacturer and exporter needs to know that the U.S. Government is aggressively moving to enforce existing laws on export control.

As I noted above, many companies are not aware that their products could, in certain circumstances, be subject to export control. They also may not be aware that they can be held responsible if they sell to those who export illegally. In short, the concept of “reasonable care” applies equally to exports as well as imports: all exporters are required to be fully aware of all regulations applying to their company and should have a compliance plan to ensure that these regulations are followed by every employee of their company.

Just as Customs enforces many import-related laws for other U.S. agencies, they are working together with other agencies on export enforcement. Here are some sites for more information on Operation Shield America and other U.S. Government export enforcement initiatives:

• Operation Shield America
• Bureau of Industry and Security
• Office of Defense Trade Controls
• Office of Foreign Assets Control

Take the time to visit these sites and learn more about your informed compliance responsibilities. It is not only patriotic (and it is the law); it is just good business practice.

Mr. Selby's bio