Choosing a local agent or distributor in a new state: three checks before you sign

The agent who wants your line in a new state arrives with a visiting card full of brands and a list of buyers they say they know. Before you give them anything, check three things. What do they sell today? Whose customers do they actually hold, and would those buyers follow the agent or the brand? And will they give you the name, number and outcome of every enquiry you pass them? Test the third in a short trial before any agreement. An agent who fails it will cost you a year before you notice.

What the agent sells today tells you how they will sell you

An agent's current lines decide where they go every morning. Say they already sell pouch film, cartons or labels to the packers you want to reach. Then they walk into those units every few days and can introduce your machine on the way. That is the agent you want.

If the agent carries a rival's product, be careful. They may still sell yours, but they may also use your quotation to push the other company's price down, or offer yours only to buyers the rival has already lost. If the agent carries nothing at all, ask what pays the rent. An agent with no running income will chase whatever commission is quickest that week.

Ask to see the brands on the letterhead and the visiting card. Then ask which principal pays most of the commission. The answer tells you whose calls get taken first.

Whose customers do they really hold?

Ask the agent to name five buyers sold to in the past year, with the person dealt with at each. Then call two of them yourself, as a supplier asking for a reference.

Listen for how they talk about the agent. "Call Mehulbhai, he sorts it out" means the buyer follows the agent. That is good for sales and risky for you, because if the agent leaves, the buyer goes along. "We buy that brand, the agent brings the quotation" means the relationship sits with the brand, and the agent holds less than claimed. Neither answer rules anyone out. Both tell you what you are paying for.

Will they share the enquiry details?

Once you enter a state, enquiries reach you directly: from your website, from IndiaMART, from a trade fair stall. You will pass them to your agent. What you need back is the buyer's name and number, whether there was a visit, what was quoted and what happened.

Many agents resist this, fearing you will go direct once you have the names. Meet the fear head on. Put in writing that the agent earns commission on any order from the agreed districts, even one placed with you directly, apart from accounts you had before the agreement. Then ask for the details. An agent who still refuses has told you whose buyers they think these are.

The first meeting: seven questions and what to listen for

1. Which companies do you represent today, and which pays you the most? Worry if a direct rival appears near the top.
2. Name five buyers from the past year and the person you deal with at each. Listen for names and designations given without hesitation.
3. Can I call two of them? A refusal here ends the exclusivity conversation.
4. If I send you an enquiry from Rajkot tomorrow, what happens next? You want a sequence: call, visit, demo, quote. "I will handle it" is not an answer.
5. Will you send me the buyer's name, number, quote and outcome for every enquiry I pass you? This is the one you test, not just ask.
6. Which towns did you visit last month? The answer is the real territory, whatever the agreement says.
7. Who covers your buyers when you are travelling or unwell? A one-person agency is fine if you know it is one person.

The rule: if the agent refuses question 3 or question 5, sign nothing exclusive. You can still give a non-exclusive trial with three real enquiries and see what comes back.

For example: a Hosur machine maker and a Gujarat agent

This is an invented case. A Hosur unit makes pouch packing machines for snack and spice packers. An Ahmedabad agent with a smart office and a long list of names asks for Gujarat. The owner signs exclusivity after one meeting, without calling a single buyer on the list.

Months later, the picture is clear. Enquiries from Rajkot and Surat that the unit passed on went nowhere, because the agent only travels around Ahmedabad and Gandhinagar. The agent also represents a Rajkot machine maker whose machine is cheaper, and offers it to every price-led packer. The Hosur unit hears this from a buyer who asked why two quotations arrived on the same afternoon. Eleven months of exclusivity have produced one order, worth about ₹7 lakh.

At renewal the owner runs the checks that were skipped. Two of the agent's five named buyers get a call. One bought the Rajkot machine through the agent; the other barely remembers the name. Then the owner passes three fresh Saurashtra enquiries to the agent and asks for name, visit date, quote and outcome on each by an agreed date. One comes back.

The same offer, non-exclusive, goes to the pouch film supplier's best field salesperson in Saurashtra, someone the packers there already buy from. All three come back. One has a demonstration booked, and it is too early to call it an order. The first agent keeps Ahmedabad without exclusivity; how to draw district lines is covered in dealer first or direct first. Every enquiry now sits in one shared register, and each agent sees only their own lines.

When to skip the agent altogether

If your product needs installation and service in the state, a commission agent with no technicians cannot carry it. You need a distributor with a service bench, or your own engineer living there.

If your buyers are a handful of large plants, sell to them directly. An agent between you and three big accounts adds a layer and a commission without adding reach.

And if you cannot yet answer an enquiry from that state within a day yourself, fix that first. An agent cannot cover for a principal who replies slowly.

Before the first meeting

Write the seven questions on one page and take it with you. Then read the state's page in the locations section, so you know which districts and trades matter there. Channel partner recruitment is the service for finding and checking partners, and our note on preventing channel conflict covers what to settle before the paperwork. If an agent is already waiting for your answer, tell us what you need.