How Much does a Managed Export Program Cost?
At the Johnson Group, our experience gives us the confidence to trust in our ability to produce results. Once we have determined that there is a genuine opportunity to bring our partner company’s products to market, we invest in the program and assume the responsibility of generating sales.
Whether purchasing our partner’s products as an exclusive distributor, or selling them on a commission basis, we earn our profits from actual sales. Given a marketable product, we bear all of the expenses related to exporting and the international sales effort and effectively eliminate all of the risks associated with shipping, exchange rate fluctuations and foreign receivables collection for our partners. We don’t charge fees for services or require any payments in advance.
Features of Our Program Cost Structure
- No fees or charges
- We cover all of our own expenses including travel and sales expenses
- Compensation earned as a commission or by buying products as a distributor and reselling
- Agreement and terms based on performance and results
Since we tailor our program specifically for each partner company, the terms can vary, but we typically earn our compensation in one of two ways. We either collect a commission for what we sell or we buy the products from our partner based on an Export Price List and resell them to our customers.
The second formula is the most common and offers several advantages for our partner company. Since we buy just like a domestic distributor it eliminates our partner’s exposure to all foreign trade related risks: export regulation compliance, currency exchange rate changes, payment collection risk, etc.
For any collaboration and managed export program to be successful, it requires that both partners be fully committed to the process. Even though we don’t require advance fees for our services, it is necessary for our partners to invest in the effort and make certain contributions to the program.
Partner’s Contributions to Program
- Export Price List (see the Export Pricing section)
- Exclusive rights to sell in defined territories
- Long-term commitment to market and program subject to performance and results
- Product labeling and packaging modifications as necessary
- Adapting and translating marketing and Point of Sale materials
- Reasonable sample policy
- Participation in select promotions / exhibitions as agreed
A partner’s contribution includes both financial and non-financial obligations. The non-financial include providing ready access to management and tech support personnel, a commitment to the markets long-term, assurance of timely responsiveness and an emphasis on customer service.
Financial commitments can include modifying product labeling or packaging; obtaining product certifications; adapting, translating and printing marketing materials for specific markets; a reasonable sample policy and participation in planned promotions and trade shows as agreed.
When compared to the management time required, additional staffing and expense of creating an international sales department in-house, partnering with the Johnson Group offers the most cost-effective solution to achieving bottom line results in export sales.
