Doing business in Mexico: Need advice.

Discussion in 'Growing and Managing a Business' started by Wesblanding, Nov 6, 2012.

  1. Wesblanding

    Wesblanding
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    I am doing business in Mexico for the first time, and have won a high value piece of business which will be sold through another company that we've chosen as our partner in Mexico. We sell to the partner, then they sell to the final customer. We want this partner in the supply chain for their technical expertise, proximity to the end customer, and to be someone to pressure the final customer for collection. The problem is that the partner company is very small and does not have the cash flow to pay us prior to they, themselves, collecting from the final customer. Consequently, my Credit department is not willing to extend credit and terms to our partner. Not getting this business is not an option. Can people with expertise or experience in this area please offer advice?
    The ideas I've had so far include (1) Selling directly to the end customer and giving the partner an agent's fee for servicing the business, (2) Inserting a trading in between ourselves and the partner, who will get a cut in exchange for absorbing the credit risk (I don't like this, though, because it adds another margin into the value chain). What are some other options?
     
  2. Fergal

    Fergal
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    Would it be possible for you to get credit protection insurance on the Mexican partner company? That way your credit department can be sure that they will get paid and should be willing to extend them the credit.
     

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