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Date: 2016-08-12

Four Things to Know About Terms and Conditions

You may have read that headline and said to yourself,  "When it comes to e-commerce, all I want do us make sales to everyone everywhere."  But too much of a good thing can not be so good."

WPG has heard from a number of different companies that people they sell to are then selling those products online for less than their distributors are selling the products. Undercutting one set of customers just to generate marginal additional sales is not good business.

Let's do this right and in an orderly way.  First, make sure you understand how the buyer intends to sell your product and in which country or countries.  Do they have a license, if needed, to conduct business in that country?  You may want to limit the number of countries in order to keep your options open in them later.

Second, if the buyer wants to resell the item, you may want to have your trademarks registered in that country. If you don't file first, the buyer might steal everything, and suddenly you receive a letter saying that you're infringing someone else's property rights.  Whose?  Your buyer who snatched your IP turned the tables on you.

One way to thwart this activity is to have your government's commercial representative, in the case of the U.S. it's the U.S. Commercial Service, perform due diligence on the distributor-reseller wannabe.  Consider that one day you might want to have a distributor and that one-offs now could affect other, bigger sales later.

Third, if you have a distributor in a specific country and you're contacted by another business entity in that country who wants to buy then sell your product there, refer them to the distributor you have.  If you're happy with your distributor, then there's ample reason for her to screen and evaluate someone you don't know.  What new channel or customer base do they bring to the table?

Buyers in your lap

A good distributor can also help get your product registered in the market if registration or certification is needed.  Ideally you know what's needed and perhaps done what's required in markets that you've preselected based on some research.  But that's not always possible.  Buyers may fall into your lap and perhaps they already have, through WPG, for example.  What will your pricing and competition policy be and how will you attempt to enforce it?

Fourth, you need to think about your company website in relation to distributors or resellers.  Will your site sell mainly to buyers in your home market, while serving as a way to attract foreign distributors or resellers who you will not directly compete with in their markets?

These questions are worth thinking about.  They comprise what you might call a "good problem," because they herald broader interest to come in your product and company. But they have the ability to become just a problem if not managed smartly.

Buyers are out there, and they do their homework.  They look at what people are saying online about your product.  They can sense a buzz coming.

When they call, will you be ready?


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