Depending on the value of the technology transferred, the exporter could exert considerable control over the marketing and overall operations of the company receiving this technology. Joint ventures imply the arrangement where a company in the U.S. and one or more foreign companies decide to join efforts to undertake a new venture, which individually none could pursue effectively. Finally, the wholly owned subsidiary is the most involved position an exporter can take in a foreign market as well as the most profitable, albeit the most costly and with the greatest risk-factor. Indirect market entry includes commissioned agents, country controlled buying agents, EMC's, ETC's, export merchants, piggyback marketing, and state controlled trading companies. The characteristics of representatives or agents are that they do not take title to goods, and work on a commission basis.
Distributors do take title to goods, and mark up the goods for resale.
As a final word of caution, Mr. Portieles urged strongly against letter appointments, standard and evergreen contracts, business without a contract, trademarks and patents, legal commitments, the right to assign, or reporting requirements when dealing with representation and distribution agreements. Instead, these agreements should involve transparency, phase in relation, performance standards, reasonable reporting requirements.