Granting international distributors exclusive rights.
Lining up good stateside distributors is challenge enough, but finding committed distributors overseas is even more daunting. Most foreign distributors will want exclusivity. Should you grant it?
Yes -- and no, says Roy Kessler, president of PC Globe Inc., a $6-million Tempe, Ariz., company that put the atlas onto software.
At first Kessler cut a deal offering exclusivity without any performance clause and with no insistence on a front-end order. Overseas product sales languished.
Now if distributors want exclusivity, Kessler offers 20% of what they think they can sell in a year as their first order, which must be prepaid. "They don't get an exclusive so much as the opportunity for an exclusive," says Kessler. As long as they keep ordering as much as their first order each quarter, they retain their monopolies. To date, PC Globe's German distributor has maintained its exclusive rights. The product sells in 15 foreign countries, accounting for 15% to 20% of overall sales.