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on the ground of his keeping the exporter in question in the dark. On the other hand, one has the right to question the particular exporter's business acumen in permitting his "exclusive agent" to use his position for the purpose of depressing prices, instead of helping the exporter to take advantage of the market. This system has been brought about by American exporters themselves. For some inexplicable reason, certain exporters jealously guard the names of their agents, and, as a result of this needless secrecy, it is possible for one agent to "load up" with "exclusive" American connections in the same line-which in turn has had an unfavorable effect on the American export business.
LISTING OF FOREIGN AGENTS
American exporters might follow the example of exporters in other countries who sometimes list their foreign agents in a published trade directory. There can be no objection to one agent having more than one American export contact in some lines, of which lumber is one, so long as he plays the game fairly and can take care of the trade, but he should not use his position to depress the market. Each case must be judged on its merit, and no exporter should enter into an agreement with "exclusive" agents unless full particulars in regard to the agents' arrangements with competing concerns are made clear.
CHOICE OF DISTRIBUTORS
What type of distributor a manufacturer or exporter should choose depends primarily upon the commodity he manufactures or produces. It also depends, however, upon the extent to which he wishes to assume the credit or financial risk. If he is a large and well-established manufacturer of a product that requires highly specialized representation, he may choose a resident agent to represent him-not because he can afford to take the financial responsibility, but because his product requires specialized selling effort. On the other hand, a smaller manufacturer may choose an export merchant through whom to sellnot because this is the best means of distributing his product, which needs intensive selling, but because he cannot afford to assume the risk of selling to a number of wholesalers, jobbers, and retailers abroad through a manufacturers' agent or of spending the money to advertise his product abroad which such type of distribution usually entails. Not infrequently manufacturers and exporters are not logical in their choice of distributors, however, but grant long-term sole agencies for a valuable territory on the receipt of a good-sized order from a single wholesaler, when they should spend time and effort in searching out a competent resident agent who would sell equally large orders eventually to a large number of wholesalers, jobbers, or retailers.
TRADE LISTS, BUREAU OF FOREIGN AND DOMESTIC COMMERCE The Bureau of Foreign and Domestic Commerce, through its Commercial Intelligence Division, prepares and maintains some 5,000 separate lists of distributors of the leading American export products in the principal markets of the world. These lists are so symbolized as to indicate what type or types of distributor each foreign merchant may be. Thus, for the small fee of 10 cents each, lists of distributors may be obtained either from the Bureau direct, or preferably from
any of its district or cooperative offices, whose addresses are given in the appendix. These lists are periodically revised with the assistance of the American Consular Service. The Bureau, through its district and foreign offices, is also equipped, where these lists proved inadequate, to survey the market possibilities abroad for a given product, requesting the field officers to present catalogs and other advertising material to prospective agents, with suggestions that they communicate directly with the American firm regarding an agency. (See fig. 1.)
DEPARTMENT OF COMMERCE
Bureau of Foreign and Domestic Commerce
This trade list has been compiled in the Commercial Intelligence Division from data prepared and submitted by American consular officers abroad under the direction of the Secretary of State. While every effort has been made to include in trade lists only firms of good repute no responsibility can be assumed in connection with any of the persons or firms listed herein nor for any transactions with such persons.
This list is NOT FOR PUBLICATION.
HARDWARE IMPORTERS, DEALERS AND AGENTS UNION OF SOUTH AFRICA
**J. S. Welcass, Dragon Street. Wholesaler, retailer, handling hardware and
welcomes, Ltd. Head Office: Durban, which see,
***Gladsome and Prickett, Round table Street. Wholesaler handling hardware and various other lines.. Branches at Capetown and Port Elizabeth. cover the Union of South Africa and Mozambique. Dutch.
***Mulride and Frecke, Ltd., Commissioner and Glose Streets. Wholesaler handling household hardware and hand tools. Head office at Durban, but Johannesburg branch operates as separate company. Twenty travellers cover the Transvaal, Orange Free State, Rhodesia and Upper Cape Province. Representative in the United States: Jones and Smith, 9 State Street, New York, N.Y. British. **Major and Massie, Ltd., P.0.Box 6974. Wholesaler, retailer and commission merchant handling builders' hardware, heating and cooking appliances and sandpaper. Branch in Ndola. Three salesmen cover Union of South Africa and Belgian Congo. British.
Covel and Dillbert, Ltd., 37 Marker Arcade. Wholesaler and retailer handling
Camel Dealing Co., Ltd., P.0.Box 5985.
**Ledame and Braile, Arcadia Building. Wholesaler and retailer, handling
SELECTION OF A DISTRIBUTOR
The evaluation of prospective distributors is from two principal points of view. The manufacturer or exporter wants a distributor in a given market who will get the business for him. He also wants one who will either be financially responsible himself, if he assumes the risk, or who will sell only to others who are good risks. Usually only approximate satisfaction can be achieved on both counts. Sometimes, if business is done on a letter of credit or documentary payment basis, the credit factor is of lesser importance. In all cases, however, what the manufacturer or exporter desires is the best sales representative he can find who is also financially and morally sound.
EVALUATION FOR SALES ABILITY-UNITED STATES SALES
The Sales Information Reports supplied, for a fee of 25 cents each, by the Commercial Intelligence Division of the Bureau of Foreign and Domestic Commerce, are designed to give the manufacturer or exporter a sufficient idea as to the past performances of foreign distributors along both financial and moral lines, inasmuch as, while they do not recommend a definite credit limit, as do some credit reports from banks, nor state in detail the financial resources of the distributor, as do the reports of credit agencies, they do furnish a guide to the places where such information may be found. In addition, they indicate the nationality of the firm or individual; the number of sales outlets a distributor has; the number of salesmen employed; how the distributor functions; how long he has been in business; what foreign and United States firms he now represents; his capital and annual sales volume, which, taken together with the type of goods he handles, indicates his energy. The reports give opinions on the general moraĺ and financial responsibility (from a number of foreign credit sources) of the foreign firm or individual. There are 600,000 of these reports on file in Washington, and they are being brought up to date on request at the rate of 60,000 a year. The American Consular Service cooperates with the Bureau in this important work. (See fig. 2.)
SOURCES OF FOREIGN CREDIT INFORMATION
In addition to this service, valuable information on the sales ability and paying habits of foreign distributors is supplied by a number of private agencies and banks at home and abroad. The Commercial Intelligence Division has published a list of these in Sources of Foreign Credit Information (Trade Information Bulletin No. 292, revised), which may be obtained for 10 cents from the Division or from any of the Bureau's district or cooperative offices. The manufacturer or exporter, before coming to a decision as to whom to appoint as his foreign agent or distributor, would do well to get as much information as possible on relative sales ability, from as many different sources as he can consult.
EVALUATION FOR CREDIT
Where a credit risk is involved, an equally careful investigation is necessary on this score. Generally, credit risk includes two cate
gories-financial risk and moral risk. One indicates whether the customer can pay and the other whether he will pay. Both are essential to know before credit is extended. The credit agencies that maintain
This report, compiled by the American Consular Service, is furnished at your request in confidence and without guaranty or responsibility on the part of this Bureau or the Consular Service.
The report is designed to present a true picture of the business organization of a prospective buyer of American goods and to indicate reliable and available sources of credit information.
General reputation Excellent. This is an old established house, acting as importer and jobber in automotive lines. It has excellent qualifications for service and is..well regarded--in-the-trade
July 1, 1935.
G.S.GOVERNMENT PRINTING OFFICE: 1934
Date of this report Figure 2.-World Trade Directory Report (Sales Information Report). foreign branches 2 or correspondents can supply a late balance sheet or financial statement on many foreign firms. Other organizations, such as the larger banks, doing a foreign business, seldom give definite advice on what line of credit a firm should be allowed. The exporter must get as full information as possible and then make up his own mind.
2 See Sources of Foreign Credit Information.
The foreigner's record for paying can be carefully checked by an interchange of ledger experience carried on through several private agencies. Others publish rating books and undertake to indicate moral responsibility in definitive terms. Many exporters write to the United States references given by the foreign firm and noted in the Sales Information Reports put out by the Commercial Intelligence Division. Investigating true moral responsibility of foreigners is no more difficult a procedure than investigating domestic credits. In this day of uncertainties, a hundred extraneous circumstances such as exchange restrictions and fluctuations, price variations due to currency devaluation and other causes, newly negotiated treaties changing duties, and other causes not at all connected with the individual responsibility of the distributor, however, may prevent the transfer of his payments. These have nothing to do with his individual willingness or ability to meet payments. Irrespective of these difficulties in the path of world trade, the old standards of evaluating individual moral worth remain, based on the human element, having little or nothing to do with financial standing. The fact that a man has financial responsibility is not necessarily an indication or a guaranty of personal integrity. A careful investigation is necessary to determine whether he has the latter as well as the former, and it is on personal integrity that satisfactory business relationships rest.
2 See Sources of Foreign Credit Information.