International resale

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1. Definition of resale

The resale serves as an intermediary for delivering goods from the manufacturer to the buyer and charges part of the product's price for the sales services it offers. Resellers' responsibilities include, in general, providing a wide range of products, keeping stock and providing services such as customer service, advice and return services, installation, maintenance and repair of products.

Resellers usually buy products for their own account, bear the risk of selling them and receiving payments from customers. They also price their products themselves and thus make their sales profit. They can also represent the competitor's product. This creates challenges for manufacturers, which encourages them to build a partnership rather than a supplier-customer relationship.

2. Benefits, challenges and requirements of international resale

Acting through independent international resellers brings benefits, but also challenges:

•   Little need for capital
•   customer contacts
•   market expertise
•   short supply chain.

•   Customs and export restrictions
•   need for education
•   cultural and language differences
•   lack of control and commitment
•   reseller's status.

To ensure good performance certain requirements are required, eg:

•   An international market oriented company needs at least one reseller responsible who has at least a fluent English, sales skills and who manages the product range very well. It is also desirable that the responsible is experienced in working with different cultures
•   export knowledge is essential
•   new markets often also require changes in packaging, products and other materials
•   resellers want to consider their own time and rushng does not help (part of them goes really fast and others can need more than a year to start the co-operation, this also depends a lot on the product)
•   product catalogs and other materials to be provided to customers must be translated into the host country language.

3. Aquisition of international resellers

It is a complicated process that may take a few weeks up to a year. Reseller acquisition process steps are:

•   Internationalization, resale and export strategy
•   market selection
•   determining the reseller's features
•   reseller search
•   agreeing on negotiation and cooperation.

3.1   Internationalization, resale and export strategy

To create internationalization, resale and export strategies you need to:

•   Look for answers to questions: why, from which starting points, which products, where, how, when and who are the target customers
•   analyze markets, products and competitors
•   think about the reasons why resellers are selected, the conditions under which they are involved, how many markets are needed.

3.2   Market selection

The market selection addresses markets where demand for the company's products exists and market research is explored.

The lack of competitors in certain markets can already tell that there is no demand. Influencing factors are physical distance, product range, culture and language skills.

3. Aquisition of international resellers

3.3   Determining the reseller's features

To ensure full quality of cooperation and efficient resale, it is important to focus on defining thefeatures of resellers, where key issues are:

•   A good seller, for example, is fluent in English, has a good coverage of the resale area, a reasonable capital, ability to hold inventory, technical knowledge
•   what are the required and recommended reseller features?
          -   demographics: location, industry, product and service offering
          -   sociographic: customer base, value proposition, focus on business
          -   psychographics: experience, goals, one culture and values
•   markets development to be monitored regularly
•   end customers may not initially see the added value of the product and may therefore require a reseller to provide a thorough demonstration of the product
•   focus on the candidates who make results
•   potential reseller candidates are profiled to meet the needs of end customers and their purchasing behavior, such as support and advice per product / service, value for a business, reseller targets for a particular market segment
•   exact definition of profile criteria to be examined i.e.:
          -   for strategic compatibility: how the strengths and weaknesses of companies complement each other
          -   operational compatibility: ability of companies to harmonize processes, practices and systems
          -   cultural compatibility: to reveal whether companies share common values ​​and practices.

3. Aquisition of international resellers

3.4   Search of resellers

It is good to use contacts and creative thinking. Here are some ways to find reseller candidates:

•   Trade fairs and customer contacts
•   old customers who can recommend potential reseller candidates to their home country
•   international trade fair (expensive and no guarantee for outcomes)
•   advertising and private service providers:
          -   advertising in the sector-specific media (printed publications, TV, radio, internet)
          -   recruitment of resellers can also be outsourced to consultants, organizations (eg chambers of commerce). NB! Knowledge about products and industry may be weak and service expensive!
          -   internet and various industry-specific discussion entities such as forums. Do they exist? Are they popular?
•   direct contact:
          -   by telephone or by e-mail
          -   requires sales skills
          -   relatively inexpensive
          -   may filter unsuitable reseller candidates out of their website, for example
          -   online could be eg.

3. Aquisition of international resellers

3.5    Agreeing on negotiation and cooperation

The issues to be taken into consideration during the negotiation phase are:

•   The objective of the negotiating phase is to initiate cooperation and filter out unsuitable resellers
•   it is mainly a discussion between the manufacturer's reseller responsible and the reseller candidate
•   the main objective is to assure a reseller that the manufacturer's products sale increases his/her business and also to learn more about the reseller's abilities and suitability for selling the manufacturer's products
•   the most important thing is to negotiate with the right people in the reseller company to sell the manufacturer's product idea
•   it is essential that there is a personal relationship between the manufacturer and the reseller (commitment, reachability, trust)
•   face-to-face meeting at either reseller or manufacturer's office
•   generally requires sensitive information such as price information sharing.

Cooperation agreement and resale contract:

•   The goal is to get commitment between the reseller and the manufacturer as well as to protect business secrecy
•   the agreement prohibits a reseller from selling competing products while the manufacturer commits itself to grant the reseller an exclusive right to a particular market. It is also forbidden to share important information of both parties with a third party without the consent of the party concerned
•   warranty and return conditions for the reseller.

Do your business need more information on international resale and/or the related services we provide? Please contact me:

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Oulu Know-how Cooperative
P.O.Box 17
FIN-90101 Oulu

+358 40 159 3490