South Africa - Using an Agent to Sell US Products and ServicesSouth Africa - Using an Agent
One of the first steps an exporter may wish to take in locating an agent or distributor in South Africa is to contact the U.S. Commercial Service in South Africa and register for one of the services specifically designed to meet the needs of U.S. exporters. South Africa offers U.S. exporters and suppliers a wide variety of methods to distribute and sell their products, including using an agent (also known as a Commission Sales Representative, or CSR) or distributor.
In South Africa, the terms "agent" and "distributor" have a very specific meaning: agents work on a commission basis after obtaining orders from customers. Distributors buy, carry stock, and sell products directly to customers.
Agents often distribute durable and non-durable consumer goods, as well as some industrial raw materials and related commodities. This may be particularly appropriate when products are highly competitive and lack a large market. It is common to appoint a single agent capable of providing national coverage either through one office or through a network of branch offices. Recently, virtual/online distribution has been seen a significant increase in South Africa. The role as the local representatives of U.S. exporters, agents, with the help of their freight forwarder, should be able to handle the necessary customs clearances, port and rail charges, documentation, warehousing, and financing arrangements.
Local agents representing foreign exporters, manufacturers, shippers, or other principals who export goods to South Africa are fully liable, under South African import control law, for all regulations and controls that are imposed on the foreign exporters. Local agents are required to register with the Director of Import and Export Control of the Department of Trade and Industry. It is important for a U.S. exporter to maintain close contact with the local agent to track changes in importing procedures and to ensure that the agent is effectively representing the sales interest of the exporter.
Typical commission rates for agents (Commission Sales Representatives, or CSRs) in South Africa depend upon the contract concluded and upon the CSR's responsibility. These rates can range from 3%-25% commission per concluded transaction. Companies sometimes pay a retainer fee plus costs and an incentive scale on deals.
Distributors who buy for their own account and carry a wide range of spare parts often handle capital equipment and commodities such as chemicals, pharmaceuticals, and brand-new products on an exclusive basis. Leading distributors often have branches throughout South Africa and sell to both wholesalers and retailers.
When appointing a South African distributor, U.S. exporters should take care to find out if the distributor handles a competing product. In some instances, major South African corporations whose holding companies market products competing directly with American products have approached some U.S. exporters.
In South Africa's competitive marketplace, it is essential that the U.S. exporter provide adequate servicing, spare parts and components, as well as qualified personnel capable of handling service inquiries. In most cases, after-sales service should be available locally since potential delays often lead purchasers to seek alternative suppliers.
The U.S. Commercial Service has found that thorough market research preceded the most successful ventures entered into by U.S. companies. This is an important first step before engaging in a search for agents or distributors. Once contacts are established, U.S. companies should visit South Africa, as first-hand knowledge of the market is an advantage. Such a visit provides an opportunity for a personal appraisal of the prospective agent or distributor. U.S. exporters should carefully investigate the reputation and financial references of a potential agent or distributor and establish a clear agreement delineating the responsibilities of both the exporter and the agent.
The U.S. Commercial Service in South Africa offers a number of business facilitation services, including market research, appointment-setting, and background checks on potential business partners. For a full list of the services offered, please visit: https://2016.export.gov/southafrica
As part of the U.S. Government export promotion efforts, Commercial Service South Africa coordinates market research and business facilitation in several Sub-Saharan African countries. These include:
Botswana
Burkina Faso
The Gambia
Guinea
Lesotho
Liberia
Madagascar
Malawi
Mali
Mauritius
Namibia
Senegal
eSwatini
Zambia
In addition to offices in South Africa (Johannesburg, Cape Town, and Durban) the U.S. Commercial Service also has offices in the following Sub-Saharan countries: Angola, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, and Tanzania, as well as a dedicated representative within the African Development Bank in Cote d’Ivoire. Through its Partnership Post program with State Department posts in Sub-Saharan Africa, the Commercial Service can provide the same branded export services in almost all countries of the region, as detailed here:
https://2016.export.gov/southafrica/doingbusinessinsub-saharanafrica
For additional information, please e-mail the U.S. Commercial Service at:
https://www.export.gov/Contact-Us
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
In South Africa, the terms "agent" and "distributor" have a very specific meaning: agents work on a commission basis after obtaining orders from customers. Distributors buy, carry stock, and sell products directly to customers.
Agents often distribute durable and non-durable consumer goods, as well as some industrial raw materials and related commodities. This may be particularly appropriate when products are highly competitive and lack a large market. It is common to appoint a single agent capable of providing national coverage either through one office or through a network of branch offices. Recently, virtual/online distribution has been seen a significant increase in South Africa. The role as the local representatives of U.S. exporters, agents, with the help of their freight forwarder, should be able to handle the necessary customs clearances, port and rail charges, documentation, warehousing, and financing arrangements.
Local agents representing foreign exporters, manufacturers, shippers, or other principals who export goods to South Africa are fully liable, under South African import control law, for all regulations and controls that are imposed on the foreign exporters. Local agents are required to register with the Director of Import and Export Control of the Department of Trade and Industry. It is important for a U.S. exporter to maintain close contact with the local agent to track changes in importing procedures and to ensure that the agent is effectively representing the sales interest of the exporter.
Typical commission rates for agents (Commission Sales Representatives, or CSRs) in South Africa depend upon the contract concluded and upon the CSR's responsibility. These rates can range from 3%-25% commission per concluded transaction. Companies sometimes pay a retainer fee plus costs and an incentive scale on deals.
Distributors who buy for their own account and carry a wide range of spare parts often handle capital equipment and commodities such as chemicals, pharmaceuticals, and brand-new products on an exclusive basis. Leading distributors often have branches throughout South Africa and sell to both wholesalers and retailers.
When appointing a South African distributor, U.S. exporters should take care to find out if the distributor handles a competing product. In some instances, major South African corporations whose holding companies market products competing directly with American products have approached some U.S. exporters.
In South Africa's competitive marketplace, it is essential that the U.S. exporter provide adequate servicing, spare parts and components, as well as qualified personnel capable of handling service inquiries. In most cases, after-sales service should be available locally since potential delays often lead purchasers to seek alternative suppliers.
The U.S. Commercial Service has found that thorough market research preceded the most successful ventures entered into by U.S. companies. This is an important first step before engaging in a search for agents or distributors. Once contacts are established, U.S. companies should visit South Africa, as first-hand knowledge of the market is an advantage. Such a visit provides an opportunity for a personal appraisal of the prospective agent or distributor. U.S. exporters should carefully investigate the reputation and financial references of a potential agent or distributor and establish a clear agreement delineating the responsibilities of both the exporter and the agent.
The U.S. Commercial Service in South Africa offers a number of business facilitation services, including market research, appointment-setting, and background checks on potential business partners. For a full list of the services offered, please visit: https://2016.export.gov/southafrica
As part of the U.S. Government export promotion efforts, Commercial Service South Africa coordinates market research and business facilitation in several Sub-Saharan African countries. These include:
Botswana
Burkina Faso
The Gambia
Guinea
Lesotho
Liberia
Madagascar
Malawi
Mali
Mauritius
Namibia
Senegal
eSwatini
Zambia
In addition to offices in South Africa (Johannesburg, Cape Town, and Durban) the U.S. Commercial Service also has offices in the following Sub-Saharan countries: Angola, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, and Tanzania, as well as a dedicated representative within the African Development Bank in Cote d’Ivoire. Through its Partnership Post program with State Department posts in Sub-Saharan Africa, the Commercial Service can provide the same branded export services in almost all countries of the region, as detailed here:
https://2016.export.gov/southafrica/doingbusinessinsub-saharanafrica
For additional information, please e-mail the U.S. Commercial Service at:
https://www.export.gov/Contact-Us
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.