Sales Representative in Egypt
Agents, Sales Rep (1) , Distribution Networks (6) , Government Procurement (2) , Imports/Exports (6) , Licensing (0) , Marketing (0) , Reaching the Consumer (2) , Sales Representative (1)
Overview by Globlatrade.net:
- Trading Companies
- Type of Organization
- There are different types of intermediaries. Companies with modern management are very few. The more widespread are "general sales" companies. Some of them are specialized (construction products, frozen products...), others are generalized and sell everything. At last, there are small companies specialized in only some products or foreign suppliers. It is possible for foreigners to sell on the Egyptian market if they are registered to make direct sales. However, most use intermediaries to make it easier.
- Main Actors
- Wholesalers are very dispersed. There aren't many large distributors. They can be contacted directly, however, their specialization, which is often very precise, makes it useful to go through an intermediary. Mansour Manufacturing & Distribution (MMD), Majed Al Futtaim Group, Raya Holding & Co. and Oriental Weavers & Co are amongst Egypt's major distributors.
Using a Commercial Agent
- The Advantages
- It is a good way to start trading activity in Egypt.
- Where to Be Vigilant
- The agent will have to be chosen according to his motivation, his interest in the product, his references and the range of products that he deals with.
- Elements of Motivation
- The amount of commission is an important motivating element.
- The Average Amount of Commission
- The commission rates vary according to the type of product or service, sales volume (the higher it is, the lower the commission) and the services provided by the agent. For everyday goods like rice, wheat, sugar and cotton, the commission is between 1 to 3%. For chemical and food products, it is between 3 to 5%. For medical, construction or office equipment, it is around 10%. For scientific and laboratory equipment, 15%. For big projects like civil engineering, it is between 1 to 3%. The commission rates have to be recorded in the signed documents.
- Breach of Contract
- The contract is free insofar as the law is neutral regarding its content. There is no obligation of exclusivity; there is no obligation of compensation in case of cancellation. The commission rates have to be recorded in the contract. It is the agent, and not the foreign company, who has to register the contract with the Ministry of Trade and Industry.
- Finding a Commercial Agent
Gateway for investment
US Commercial Service, Distributors, Sales Agents and Importers in Egypt
Setting Up a Commercial Unit
- The Advantages
- It is free to establish a company or an office in Egypt. One simply has to register at the Commercial Registry, a procedure that has to be renewed every 5 years. The rent, the rate of taxation and the cost of employement being relatively inexpensive, this procedure is advantageous. For more information, refer to the American Chamber of Commerce in Egypt website.
- Where to Be Vigilant
- Set up a commercial unit only if the foreign company has long-term business interests in the country.
- Different Possible Forms of Settlement
- A Representative Office
- A representation office can make it possible to get information on the market and give the necessary support (promotional and for service). It is not subject to any tax and does not need any specific authorization. It is not possible to trade, to make profits or to place orders through a representation office.
- A Branch Office
- A branch can take and place orders as well as lead a marketing campaign It has to pay taxes. Opening a branch is considered as a direct investment and has to be registered at the Ministry of Finance.
- A Company
- To get an independent company up and running requires time and investment, but this could offer a way of guaranteeing better protection for the owner, get loans and enter into markets that are subject to improt barriers.
- Evolution of the Sector
- Franchising has developed considerably in a very short space of time. Mostly in the fast food area. Currently, there are approximately 40 franchises in Egypt, of which 25 are fast food chains. The EFDA (Egyptian Franchise Development Association) promotes this practice in the country.
- Some Big Franchises
Mo'men Restaurant, Egyptian chain of sandwich restaurant which has franchises in the country (15 units)
Cook Door, Another big national restaurant chain which has franchises (16 units)
House of Donuts, Big American chain franchise
- For Further Information
EFDA, Egyptian Franchise Development Association
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U.S. Department Of Commerce, Egypt