Choosing the right route to market is critical for success in any market and can easily mean the difference between success and failure. Getting it right can spell increased sales and profits, while getting it wrong can lead to headaches and frustrations and ultimately, wasted time and money.

You may decide to control your destiny and sell direct. But the most common routes to market, especially in Europe, are through commercial agents or distributors.

In using either you need to look at three key factors: the risk you are prepared to take; the control you need and the flexibility offered.
Of course, having the right product in the first place is essential. It needs to be fit for market, meet market regulations and have some kind of competitive advantage.

The next step is to choose your market and acquire a good understanding of the dynamics of that market from supply chain to final customer.
Many companies opt for a commercial agent to help sell their goods. The right agent helps a company save on overheads and gain key information through the agent's local knowledge and contacts. This route also allows the company to be in control of the sale and to pay on results.

These are all valuable benefits. But the use of agents isn't without pitfalls. Agents need to be properly managed with good communication, clear guidance and a robust, legally enforceable agreement specifying, for example, if the agent is to be the sole agent for your product. If things go wrong, a bad agreement can be costly. It's worth remembering that as the seller (commonly known as 'The Principal') you retain the 'Title of Goods' and therefore carry all the risk associated with any transactions.

To help you with drawing up a template for an agreement, have a read of 'The EU Commercial Agents (Council Directive) Regulations 1993'. It sets out the duties and obligations for both you and the agent, and provides some guidance on remuneration, terminations, compensations and restraint of trade.

An alternative to an agent is a distributor. This route can meet a need to achieve sales volume and economies of scale from productivity and financial accounting while also having the advantage of offering a local facility for stockholding and infrastructure to handle delivery and after sales service to a multitude of consumers.

However, in a distributor agreement, the 'Title of Goods' normally passes to the distributor. This can lead to a loss of your own deeper knowledge and understanding of the market, a reduction of margin income and less control in product pricing. This means you need to be more diligent in understanding pricing models and marketing and to provide good marketing and advertising support.

Whatever the route to market, clear and robust agreements are key. It's essential to take professional advice and have your agreements prepared, checked and approved by professional legal advisers.

You then need to manage those agreements by keeping close records and having regular review meetings with your agents/distributors.

Other key routes that can be considered are licensing, joint venture, incorporation, acquisition overseas or even greenfield investment overseas - but that is for another time.

At UK Trade & Investment we provide free, expert advice on how to get started and which routes to market may be best for you. If you'd like to find out more, contact my colleague Hari Rai at h.rai@cad.coventry.ac.uk