Brazil, the largest economy of South America

Brazil is the largest economy of South America . The country is undergoing rapid change from a production economy to a consumption economy. It is considered as one of the emerging economies with the strongest growth in the world today.

Brazil is a strongly industrialized country which imports and exports a lot. These past few years have seen an improvement of the Brazilian economy, inflation is under control, debt is reduced, and the general risk for foreign investments is greatly reduced.

Enter the market through sales representatives

Entering the Brazilian market can be interesting for a well prepared company. But there are numerous risks to take into account on this complex market. The easiest way is to rely on sales representatives or distributors.

Selling directly in Brazil is made difficult by the language and cultural barrier. It is easy to find salespeople that speak Spanish, but it is a lot more difficult to find salespeople that speak Portuguese.

Brazil is a huge country. Unless you only have a few potential customers in Brazil , choose as a sales representatives or distributor a mid-size company that has a global presence and offices in several cities. Smaller companies will often use other local sales representatives in other regions. This is often unwanted as it favors the loss of control over product sales.

Advantages of a sales representative in Brazil

Brazil is a country where administrative tasks can be cumbersome and complex. A local sales representative will help this process. Import regulations for instance can be difficult to understand.

Be patient and understanding, but also try to go to Brazil to work out the issues and to understand the various barriers and cultural aspects.

Draft the contract with your sales representative with care

Some common clauses are prohibited in Brazil . For example you cannot impose resale conditions to a Brazilian distributor, such as a maximum resale price. In practice, if the representative resells products (i.e. he acts as a distributor), he is free to set his price and his commission is the difference between his selling price and his purchasing cost of the product. However, if the sales representative is only an intermediary between his principal and a customer, the function of the sales representative will be to bring business to the principal, at the price set by the principal since the representative does not sell products in his name.

Other conditions are guaranteed by the Brazilian law, such as the right to a commission even if the contract is cancelled because of factors due to the sales representative himself.

In case of termination of the sales representation contract without cause, the Brazilian sales representative is entitled to compensation according to a calculation formula defined by law.

And for as long as the sales representation contract is not terminated by either party, it is considered renewed for an indefinite period by the Brazilian law.

Thus it is important to take into account these local specificities in your contract with your sales representative and to pay special attention to the exact terms of the contract. It seems essential to have your sales representation contract reviewed by a Brazilian lawyer, or by a lawyer specializing in Brazilian law.

The commercial details that matter

Note that Brazilians are very sensitive to product quality, technical assistance, training and after-sale service. These key points can make a difference between winning and losing a contract during negotiation.

Good luck! And to find sales representatives in Brazil , post a free ad on RepGlobal.net.