Utilize Sales Agencies for Market Entries

by Jochen Sautter - Market Development

Introducing a foreign company or product to new markets naturally goes along with significant time spent and capital commitment. Establishing a company (e.g. PT PMA) or representative offices for trading (e.g. KP3A) is not necessarily the swiftest market entry strategy. Instead and perhaps as an interim solution appointing a business partner as sales agent who can represent companies could be considered. However, there are four areas for careful consideration.

  1. Testing the market: Many lessons have shown that product launches can fail in Indonesia, even if proven successful in neighboring countries. Sales agents can be tasked to reduce that risk and answer the important question if your product has your expected demand. PRIME can help you identifying such competent agents.
  2. Leverage on local insights: The very polite and indirect culture is an invisible obstacle to receive a critical feedback on your products. Sales agents can consult good customers, business partners or friends to receive an honest feedback and suggestions. These insights are important to decide whether to stop or continue your business idea at an early stage. PRIME could also help making such initial assessments.
  3. Access to an existing network: The sales funnel for cold acquisitions in Indonesia is known to be tedious – it can take months from a cold call to closing the deal, even for simple products. Local agents help you to shorten that communication path and get in touch with decision makers swiftly. PRIME is experienced in testing funnels before assigning third parties as an agent.
  4. Reduce commitment: Gaining first experiences in a new market always means entering a risk and commitment. You can reduce the downsides drastically by utilizing sales agents, as well as designing the sales agent agreement diligently and with respect to local customs. PRIME developed an entry structure that helps avoiding making mistakes with agents when your own entity isn’t established yet.

If your headquarters back home also prefer the comfort to control a local office and its staff in a form of a subsidiary but you don’t want to wait any longer with the actual sales activities, then we should get together to make an assessment on what could be done. In fact, sales agents or company representations are valuable for doing first steps into Indonesia once control mechanism are properly setup. That way competent partners help you to gather first hand market insights, hard and soft facts, and become a basis for your decision making process.

With PRIME Consultancy, we bring the competence and network to identify, qualify and match sales agents tailored to your specific needs. Being experienced to represent companies and develop their business, we can also discuss the option to representing your business in Indonesia.

Please feel free sending me an email at Jochen.Sautter@Prime-Consultancy.com for further questions regarding finding suitable agents or company representations.