Sunday, January 01, 2012

Audit 1: Optimizing International Agency and Distribution Agreements

Businesses large and small appoint international agents and distributors to get their products to market. We often see that these relationships may be based on a US form agreement, on agreements that may be out-of-date or – even riskier – relationships based on a handshake. This is dangerous territory in Europe, parts of Latin America, the Mideast and parts of Asia that protect local dealers and can make termination very expensive.

Far better to keep your company out of local courts and help limit the impact of local dealer protections, such as by creating a best-practice cross-border distribution and agency agreement templates with adjustments for key international markets. Laws may also limit your ability to set prices and designate territories, as well as require unexpected taxation on revenues. The small amounts invested in agreement optimization can be repaid many times over in improving your dealer relationships, avoiding disputes and allowing early termination if necessary.

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