Why Alliance experts does not work on a commission basis

Why Alliance experts does not work on a commission basis

commission basis

Some clients ask us to work on a commission basis: this would then mean that we will get a percentage of the sales that a client will make in a specific country, in stead of a fixed fee for our efforts. We have chosen not to do that. And we believe you as a client should not want to do that either. Here are the reasons why:

Our costs are only part of the investments for your market entry

We can help you find the right agent, distributor or bigger end customers. But this is only part of the steps you need to take to become active successfully in a new country. Is your product suitable for the market? What are the local regulations? Do you have to make product adjustments or translations? Do your contracts need adjustments to local law? How to arrange shipping and customs? How to handle service requests, complaints and returns?

To arrange all this will take a lot of work and costs. You will have to visit the country and have to involve lawyers. If you don't have the budget to pay us directly, will you have budget to arrange all of this? See our article on market entry costs. Doing business abroad is investing first. We can help you with making the business case to see whether your investments will pay off.

Eventually you will pay more

Alliance experts is not a distributor, we don't take ownership of your goods. We are specialised in helping you with the first steps in a new country, we don't have a sales force that is specifically experienced in your product or service. If we provide you with a lead, you will eventually have to close the sales or convince the distributor yourself.

This is something we can't influence, as we don't know what price you will ask or how the quality of your product is perceived. So we will incorporate this risk in our fees. Paying us our (moderate) fees in advance may be a better deal for you, at least if you believe in your product and think the pricing is competitive.

It can lead to sub-optimal results

Eventually you want to be active in the countries where you can make the best margins. You want to have strong agents or distributors there with a dense sales network. This way your export plans will pay off. But approaching these stronger agents or distributors takes more time than approaching the smaller ones. And there we have a discrepancy: since you will limit the commission probably to a certain period, any service provider like us may aim for the short-term successes.

You are the entrepreneur, you know what is good for your business in the long term. If you choose to pay a service provider on commission basis, you easily give away control.

How to make sure you get the desired results?

Of course you want to make sure that you get the right market insights and that the appointments we make for you are fruitful. Therefore Alliance experts works in a structured way:

  • We always provide you with a clear proposal, stating clearly what we will do.
  • In case of finding an agent or distributor, we work in steps: from a long list to a short list, and keep you involved in the selection proces.
  • We will join you in the first visit to a potential agent, distributor or client. If we haven't done our homework properly, it will reflect on us, and we have the chance to correct.
  • Our payment is mostly in two or more parts: at commencing the assignment and when concluding it. And we mostly propose to start with some limited research or in just one country. This way we can build mutual trust.

Do you want to know more? Please contact the partner in your region and we are happy to answer your questions.

This entry in temporary was updated on March 22, 2018 by specialist.