Partnering with a local representative who has good industry contacts, proven reliability, loyalty, technical skills and after-sales service capabilities is important for selling and maintaining a continued presence in Israel. U.S. companies need to be aggressive in their pursuit of business opportunities and maintain an active in-country presence.
Israeli industry generally prefers to purchase goods through an agent that will be able to provide after-sales service. Government and government-owned buyers will often require an agent in Israel. The majority of agents have exclusive representation rights because of Israel’s small size. Most U.S. heavy industrial equipment exporters to Israel use a commission agent who conducts promotional campaigns and active buyer calls.
The most common approach used by exporters of light industrial equipment and consumer goods is to obtain a local importer/distributor. Distributors will import on their own account, and carry sufficient stock to satisfy ongoing demand or use for demonstration, maintaining their own sales organization, supplying spare parts and maintaining a service division, if applicable. Local representatives often provide legal support for ongoing operations. In concluding a representation agreement U.S. companies should be sure to include: 1. Contract duration; 2. Exclusivity (if applicable); 3. Compensatory amount as a function of contract duration in case of termination of exclusivity; 4. Promotional input by agent and volume of sales; and 5. Dispute settlement mechanism, either by arbitration, or by assigning a tribunal (preferably U.S.).