Routes to market

Your checklist

Explore direct selling into EU markets

As with other markets worldwide, the principal routes into EU markets include:

  • Direct selling 
  • Using agents and distributors
  • Licensing

Direct selling remains the most traditional form of developing export sales in the EU. This means selling direct to the consumer via your website, or direct to retail outlets and at trade fairs or exhibitions. 

There's a growing trend for larger European retailers in particular to buy direct rather than use a third party. 

Selling direct will normally allow you to achieve a higher margin and profit. It will allow you to test the market and understand each export market and the opportunity for your company more fully. 

Online marketplaces can also help your company increase its visibility and credibility quickly in EU markets.

Find online marketplaces on the Exporting is GREAT website

Lists of targeted EU market visits and exhibitions can be found in our events section and on the Department for International Trade events website.

If you're considering exhibiting or attending targeted EU exhibitions for your sector, then get in touch with an export adviser to see how we can help.

Support may also be available if you're planning to visit EU markets to establish the best route to the market and make contact with potential buyers.

Using agents and distributors in EU markets

The use of agents and distributors is common in many European markets. not least to help address any language or cultural differences between EU markets, and if you're targeting more specialist stores or retail outlets. 

If agents or distributors are your preferred route to market, you should prepare a checklist of what you would require from any agent or distributor you intend to screen, select and appoint the best agent and distributor for you:

  • Establish what their sales contacts and networks in the EU are
  • Do they have a track record in selling your type of product?
  • Ensure you undertake credit checks of potential agents and distributors to assess financial standing and track record in the market
  • Arrange to meet with them in market before you appoint them, to get a better understanding of how they operate and if you could work well with them
  • Exclusivity in the EU – be particularly careful of entering into any exclusive agency or distribution contracts unless tied in to clear performance targets (with six to twelve month reviews)
  • Agency Law – remember in EU markets, Agency Law will apply often even when there is no written contract if someone has been acting in practice as an agent on your behalf, so ensure you have a robust contract in place

A good starting point to identify prospective agencies or distributors in EU markets is through our European support networks, including DIT and Enterprise Europe Network offices.

Evaluate licensing models for EU markets

This option can allow you to enter and develop a number of EU markets quickly and improve your export cashflow in terms of an upfront payment and on-going royalties from sales. 

It requires a comprehensive agreement in place:

  • To protect your company and your Intellectual Property (IP)
  • Share the export risk and ensure a good return
  • To ensure appropriate legal advice is sought

It will be critical to select trusted partners who will not potentially damage your company brand. Partners that can be trusted with the product and service knowledge you provide under any agreement.

Licensing is more commonly used by companies with new products or services who are looking to develop EU markets quickly.

Licensing allows them to take their product to market without the expense and risks involved in setting up locally, but there are likely to be relatively high initial set up costs.

Think about establishing a physical presence in EU markets

For some companies, this can be a logical progression from working with an agent or distributor as you grow your sales in specific EU markets, or identify a significant market opportunity.

Done correctly, and at the right time in your company’s development of the market, this route to market can:

  • Lower costs
  • Increase market penetration quickly 
  • Raise the profile of the company in the selected market

However, it also brings high initial costs and higher risk.

Options include setting up an in-market office, a joint venture with a local company or acquisition of a suitable company in the market, or setting up a formal subsidiary. 

Advice and support to understand any legalities or in market regulations to setting up an operation in an EU market is available from our export advisers.  

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Get the right support and advice

Discuss the best route to each targeted EU market with one of our export advisers or your Scottish Enterprise/SDI account manager (if you have one).

Contact us

Got any questions about EU opportunities or expanding in new markets? Our export advisers are here to help.

Disclaimer

All information provided on this web page is for general guidance only. The contents of this guide have been provided by our training partners, Upper Quartile. Upper Quartile is not affiliated with any of the third parties or listings represented on our website. Third party listings are drawn from public domain and industry body data sources. Due diligence on a given third party or listing remains the exclusive responsibility of the end user. Whilst every effort is made to ensure the accuracy of the details represented, Upper Quartile and Scottish Enterprise cannot endorse, recommend or accept responsibility for any transactions conducted between the user and a given third party or listing provided on this web page.