A foot in the door

In any market, finding a good inmarket partner is often item number one on the exporting to-do list. But beware: many New Zealand companies have found themselves in hot water from thinking they can simply walk into a market and appoint a partner. Here are

“ONE OF THE mistakes exporters talk about trying to later unwind is turning up with the wrong partners in market,” says Catherine Beard, executive director at Export New Zealand, a national exporter membership organisation.

“If you get a distributor who says all the right things but then doesn’t deliver, have you locked yourself into that agreement and how easy is it to get out of it?”

One pitfall, warns Anton Blijlevens – an intellectual property lawyer at AJ Park – is leaving IP protection to the distributor.

“In China, and many other countries, the ‘first to file’ rather than the ‘first to use’ a brand has the rights to own the registered trademark,” he says.

For that reason, allowing your Chinese partner to sort out your IP protection can make it very expensive to fire a distributor if and when needed.

“Don’t give away your IP as a loss leader just to be able to sign the distribution agreement or to be able to sell the first shipment of products.

“A company’s IP can have value well beyond the profits made from that first shipment.”

But working with a distributor isn’t all downside. The upside comes when you find a partner who acts as a true brand advocate who can help navigate some of the idiosyncrasies of the market and the flow of information.

The right distributor can also harness the value of their pre-existing relationships and the brand value they bring to the table, saving an exporter potentially large amounts of time and resources in developing those networks on their own.

“Growth and success is really in finding a distributor that’s passionate about your business,” says Andy Doherty, chief executive