Good business partner relationships are key for success when entering a new market. Depending on the industry, a partnership in your target market may be quite different than your existing partnerships.   For every partner search, the first step is to determine the type of partnership or distribution channel that is most appropriate for your company. DEinternational, the consulting arm of GACCoM, can help you identify and contact suitable potential business partners. 

These can include:

The best option for your company depends on a variety of factors, not just the type of product or service you offer.  The size of the company and the resources you have available for market entry, as well as the existing and desired market share all play a role. Regardless of the best avenue for you, DEinternational can help you identify, contact, and evaluate potential partners, as well as advise on which distribution channel is most suitable for your company. The following overview of the most common types of partnerships is a good starting point. Please contact us to discuss how we can help with your particular situation.

Sales representatives Sales representatives, or reps as they are commonly called, generate sales leads on a commission basis. The contract for sale is directly between the customer and the manufacturer, and the manufacturer is responsible for the delivery and after-sales service  and assumes full product liability. Sales reps offer the significant advantages of immediate contact to customers in your target market and low initial investment and risk.  Disadvantages to the manufacturer include limited control over the reps' activities and the difficulty of maintaining customer relationships if the relationship with the rep ends.  The manufacturer also needs to dedicate a significant amount of resources to filling orders and giving the reps the information they need.    

Distributors As opposed to a sales rep who generates a sales lead and then gives it to the company, distributors buy the products from the manufacturer and sell them in their own name and at their own expense. They often offer after-sales service. The manufacturer remains responsible for the product liability as well as any patent protection and trademarks.   Key advantages of distributors include their existing contacts with a network of customers, limited risk, and a higher level of commitment of the distributor due to their own investment. Disadvantages include lower profit margins for the manufacturer and the possibility that the distributor would also sell competitive products, in some cases at higher margins.  The distributor is under no obligation to release customer names or data to the manufacturer, and customer loyalty often remains with the distributor even if the partnership between distributor and manufacturer is dissolved.

Licensing In a licensing agreement, protected intellectual property is offered to another company for use. A one-time usage fee and/or annual licensing fee is the norm. The licensee then has the right to use the intellectual property, while the rights to the property itself remain with the licensor. Key advantages of licensing agreements can include fast, competitive entry into the target market, shared and offset development costs, and possible synergistic effects in technology or marketing.  However, it can be difficult to find suitable and trustworthy licensees. There is always a risk of the licensee using the technology for their own purposes, and it can be difficult or impossible to transfer the intellectual property back to the licensor at the end of the partnership.

Joint ventures A joint venture is a business relationship where two or more companies work together in order to consolidate activities and conserve resources, and ideally create synergies between them.  These are most common in the areas of research and development (R&D), development of new products, consolidation of marketing activities, and expansion of sales capacity. Joint ventures can be single, binding agreements defining the scope of the cooperation and roles of each participant, or can be new companies founded for the purposes of the joint ventures.  Key advantages include the ability to take advantage of an existing market presence, sales structure, and customer contacts; lower financial investment and risk for both parties; and the compounding of earning power and profitability.  However, a common stumbling block is the difficulty of assigning responsibility for unexpected expenses, and many joint ventures are dissolved because the parties find they have differing goals and expectations.  

Acquisition An acquisition occurs when one company takes ownership of some or all shares of another company. Advantages of an acquisition include assumption of the company name, management, infrastructure, and customer network; sole control of the activities of the company; and the immediate existence of an established company.  Disadvantages include long and complex negotiations and large initial investment with a high financial risk. In addition there is the possibility that valuable employees will leave the company.