Includes typical use of agents and distributors and how to find a good partner, e.g., whether use of an agent or distributor is legally required.

The Czech Republic has a developed, European-style distribution system and a strong and growing cadre of professional sales agents and distributors in most market segments. A good market entry strategy would be to find and support a strong Czech partner, agent, or distributor. The Czech Republic is geographically small with over ten percent of the population, and most decision-makers, concentrated in the capital city of Prague. Good personal relationships are crucial. An agent or distributor based in Prague can offer good coverage for the entire country, although firms located outside the capital should not be discounted due to their location. Moreover, some industry sectors are concentrated in the regions outside of Prague and better suited partners may be found there. Some firms may offer to represent a U.S. company throughout Central Europe. It is often better to limit a distributor to the Czech Republic and possibly Slovakia since many distributors do not have the ability to cover multiple markets. Potential regional distributors should have experience and contacts in the countries where they will be representing a U.S. company.

Representative offices or industrial sales agents generally handle industrial sales. This cadre of agents has expanded rapidly over the last decade. While U.S. firms will find agents to be very strong technically, many need help with developing marketing and customer service strategies. Margins for distributors are similar to those prevalent in Western European countries. Using a local partner’s facilities and staff will bring costs down to competitive levels and the local partner’s contacts will be crucial to developing business. Meetings with potential distributors can also help with determining pricing, market obstacles, and opportunities.

In general, agents and distributors will expect exclusivity. We recommend negotiating an agreement that ties exclusivity to performance with either a sunset clause or a provision that allows termination for non-performance. Good support and management of the agent-distributor relationship is crucial. Many distributors are thinly capitalized and understaffed, yet represent a wide variety of foreign companies. They often focus efforts on the bestselling product of the day to the neglect of others. As with any legal agreement, we recommend that a lawyer experienced in Czech law review any contract before signing.

Many U.S. firms use the Commercial Service’s Gold Key program and trade missions to meet and interview potential partners. For more information on these and other services, please visit the Commercial Service website.

For information on EU regulations pertaining to data privacy in business, please refer to Doing Business in the European Union: 2018 Country Commercial Guide for U.S. Companies report at www.export.gov/ccg/.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.