Mexico - Using an Agent to Sell US Products and ServicesMexico - Using an Agent
Some U.S. firms sell their products through individual sales agents, and there are many Mexican firms interested in serving this role for U.S. firms. The use of sales agents can be an effective way to reach smaller cities and remote locations in Mexico.
Selecting an appropriate agent or distributor requires time and effort. There may be many qualified candidates, and U.S. firms should set high standards to select the best suited agent/distributor. Since most Mexican firms sell in limited areas, U.S. companies should consider appointing representatives in multiple cities to broaden the distribution network. It is usually not advisable to grant an exclusive, national agreement. It is essential to develop a close working relationship with the appointed agent/distributor and maintain continuous communication. Appropriate training, marketing support, samples, product support, and timely supply of spare parts (depending upon the industry) are critical for success. There are no indemnity laws to prevent a company from canceling an agent or distributor agreement, but cancellation clauses should be specific. Sales performance clauses in agent/distributor agreements are permitted, and failure to meet established standards can be a reasonable cause for contract cancellation. Before signing an agent/distributor agreement, all parties should fully understand the terms and conditions, and how the relationship is to be developed. Many international commercial relationships become strained because insufficient time is invested in developing a full understanding of what is expected.
The U.S. Commercial Service and other organizations—such as the American Chamber of Commerce in Mexico and U.S. state government trade representatives—maintain lists of Mexican agents/distributors, manufacturers, Mexican government offices, and private sector trade organizations. After identifying a suitable agent/distributor, we encourage the U.S. exporter to conduct a commercial background check on the Mexican firm. The U.S. Commercial Service offers an International Company Profile that provides background information on a potential business partner. Commercially available services, such as Dun & Bradstreet, may list larger Mexican firms.
If a product is new to the market, or if the market is extremely competitive, advertising and other promotional support should be negotiated in detail with your representative. Product and industry knowledge, track record, enthusiasm, and commitment should be weighed heavily. We suggest the U.S. exporter schedule annual visits of Mexican personnel to the U.S. company headquarters for training. (More information on the visa process is provided in the Business Travel section in Visa Requirements.) Another important factor to consider is financing, as credit from Mexican banks is limited, and, when available, is often expensive. Joint venture agreements may also be considered to strengthen market penetration. Direct marketing is another popular marketing strategy. Telemarketing is evolving and gaining in popularity and scope. While internet penetration has not yet reached U.S. levels (the Mexican Government estimates internet access by 71 percent of the population over the age of six), social media marketing is becoming increasingly important and should be factored into marketing plans when appropriate.
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.
Selecting an appropriate agent or distributor requires time and effort. There may be many qualified candidates, and U.S. firms should set high standards to select the best suited agent/distributor. Since most Mexican firms sell in limited areas, U.S. companies should consider appointing representatives in multiple cities to broaden the distribution network. It is usually not advisable to grant an exclusive, national agreement. It is essential to develop a close working relationship with the appointed agent/distributor and maintain continuous communication. Appropriate training, marketing support, samples, product support, and timely supply of spare parts (depending upon the industry) are critical for success. There are no indemnity laws to prevent a company from canceling an agent or distributor agreement, but cancellation clauses should be specific. Sales performance clauses in agent/distributor agreements are permitted, and failure to meet established standards can be a reasonable cause for contract cancellation. Before signing an agent/distributor agreement, all parties should fully understand the terms and conditions, and how the relationship is to be developed. Many international commercial relationships become strained because insufficient time is invested in developing a full understanding of what is expected.
The U.S. Commercial Service and other organizations—such as the American Chamber of Commerce in Mexico and U.S. state government trade representatives—maintain lists of Mexican agents/distributors, manufacturers, Mexican government offices, and private sector trade organizations. After identifying a suitable agent/distributor, we encourage the U.S. exporter to conduct a commercial background check on the Mexican firm. The U.S. Commercial Service offers an International Company Profile that provides background information on a potential business partner. Commercially available services, such as Dun & Bradstreet, may list larger Mexican firms.
If a product is new to the market, or if the market is extremely competitive, advertising and other promotional support should be negotiated in detail with your representative. Product and industry knowledge, track record, enthusiasm, and commitment should be weighed heavily. We suggest the U.S. exporter schedule annual visits of Mexican personnel to the U.S. company headquarters for training. (More information on the visa process is provided in the Business Travel section in Visa Requirements.) Another important factor to consider is financing, as credit from Mexican banks is limited, and, when available, is often expensive. Joint venture agreements may also be considered to strengthen market penetration. Direct marketing is another popular marketing strategy. Telemarketing is evolving and gaining in popularity and scope. While internet penetration has not yet reached U.S. levels (the Mexican Government estimates internet access by 71 percent of the population over the age of six), social media marketing is becoming increasingly important and should be factored into marketing plans when appropriate.
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.