What is the Agreement?
Any business activity is dynamic and it is difficult to foresee every condition that may arise, especially when entering into uncharted territory. Although at the Johnson Group we make every effort in our Export Sales Management Agreement to address and define all relevant points, the primary basis has to be the jointly held principle that we are working together toward common goals and that effort requires a certain amount of flexibility and trust for success.
We make every effort to structure our sales programs to minimize risk and our agreements to distribute it fairly. Given a market-ready product, we undertake the responsibility to perform and produce sales. Our aim is to assure our partner’s satisfaction by achieving our defined performance goals and in return secure the rights to continue the agreement indefinitely for our long-term mutual benefit.
Benefits of Agreement
- No fees or charges, we cover all our own expenses
- Based on performance and results
- Changeable and modifiable as situation dictates with mutual agreement
- Renewable long-term subject to meeting predefined goals
Aside from the defined procedures and terms we establish together with our partner companies, there are three main points to our agreement that we feel are both requirements for a successful program and necessary to justify our financial investment in taking a company’s products to market.
Key Points of Contract
- Exclusive rights to sell in defined territories
- Long-term commitment, renewable subject to meeting performance goals
- Export Pricing structure for products
The first requirement is an Exclusive Geographic Territory. The reason we ask for exclusivity is that once we start promoting your products and create a demand, you will be contacted directly by various interested resellers and customers. Selling to numerous nonexclusive exporters or importers would be like having multiple sales departments within your company, each pursuing a different marketing, sales, pricing and distribution strategy and competing against each other for the same customers, to the detriment of overall results. In order to properly manage distribution in our markets, structure pricing, coordinate promotions and realize a return on our invested marketing dollars, our partner company must identify us as their exclusive representative. This ensures a response that is consistent with the sales and marketing plan.
The second requirement is a Long-Term Commitment to the program, with an automatic renewal clause subject to satisfactory performance. This is important for us not only to be able to plan sales campaigns and promotional efforts well in advance, but because the investment and expense required to open a new market is weighted up front and it takes time to achieve market penetration, break even and start to earn a return on investment. Our goal is to structure a winning formula that both parties want to continue indefinitely.
The third requirement is a Competitive Export Price. Since we normally do not charge a fee for services or expenses, we earn our profit by reselling your product. In order to achieve a volume of sales that will benefit us both we need an export pricing structure. Without this pricing the result will be a product that is not priced competitively as it could be, which will at best limit sales and at worst exclude the possibility of sales.
