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Trade Routes: Navigating International Business
By: Michael Wynne
Posted: September 5, 2008, from the September 2008 issue of GCI Magazine.
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Jeri Ross: Working with an agent that knows the business provides a layer of expertise that is beneficial. You pay them a commission on sales, and they drum up the business on your behalf. No business, no commission ... so you don’t come out of pocket until you get some action.
GCI: What did you discover they were especially good at?
Jeri Ross: What they are good at is negotiating prices, contracts, making connections—which they usually already have with distributors—and representing your brand at trade shows internationally. My agent recently represented CelluliteRx at the Mondial Trade Show in Paris, and lined up a booth with some of his other brands at Cosmoprof Bologna 2008, where I traveled to assist and meet and greet distributors.
Lesson Learned: Your agent may offer information about legal issues, EU regulations or claims. But, even if they offer information regarding these areas, you cannot expect them to know all the details pertaining to your particular industry or product. Therefore, you should still check with the proper authorities.
GCI: What happens first when you have an interested distributor?
Jeri Ross: When you have an interested distributor, they will request full-size samples of your products, usually four to six of each, so that they can field test the brand with their retailers before they commit to distributing the products. The costs for providing the products and shipping are paid for by you.
Lesson Learned: Try to determine which distributors are serious or would be the best fit for your products. It is very easy to get caught up in the excitement of having an interested distributor, especially in places where you would love to do business. However, this is the time to maintain a sense of wanting more information from a position of having what they need, not needing what they have. I sent off multiple packages that cost me a few thousand dollars mostly in shipping. It’s an investment you make to try and get distribution, so it is money well spent, but you can get more information before you decide to incur the cost—such as asking them for their business profile and a projected plan for how they would distribute your product.
GCI: What else did you have to do?
Jeri Ross: I completely redesigned my packaging to be European Union (EU) compliant. In order to do this, I hired a consultant who worked with me on aspects of the packaging—including language, symbols, font size, weight, allowed ingredients, warnings, required addresses of the manufacturer, distributor and the address in the EU that would be the office of record for the dossier. ICMAD can provide you with the EU address to put on your packaging for an annual fee. It’s less expensive than paying a private law firm in Europe, which is still an option.
Lesson Learned: Even having a consultant, my recommendation is that you still do your homework. Through ICMAD, I ordered and read A Guide to European Cosmetic Regulations, as well as conducted research on the Internet to find articles about packaging compliancy. But regulations change, so it is wise to consult updates for EU cosmetic directives and amendments.