11th February, 2019
Commodities trading firm Louis Dreyfus expects faster switching between sugar and ethanol production in Brazil, with more flexible mills leading to “dramatic” price-driven shifts.
Generally speaking, Brazilians prefer to do business with someone who is located in their market that they can meet and talk to, rather than someone that only visits once or twice a year. This is both cultural and practical. Culturally speaking, Brazilian business is conducted on a very personal basis. Price, quality, supply and the like are all very important but without a good personal relationship developing, the chances of a successful business relationship forming are unlikely. On a practical basis, it makes sense for people to want to feel the security of having a supplier that is close at hand to help them deal with any unforeseen problems or requirements.
With this in mind, there are basically three options available for representation in Brazil:
Whether your preference is for a distributor or an agent is likely dependent on your product. This is generally the least expensive option for entering the Brazilian market and can help you to tap into an already developed network of buyers. Brazil offers a large range of agents & distributors in all sizes, prices and regions. From city based to national, the options are virtually endless. Finding the right one can be a daunting task. Braanz can help you in your search for the right agent or distributor in Brazil with services ranging from finding and interviewing potential agents to negotiating with distributors and background checks on companies.
Establishing your own office for sales, support and/or distribution in Brazil is an option that many businesses choose. Whether you require a high degree of control over your sales team, products and after-sales service or have commercially sensitive intellectual property that you'd prefer not to release to a third party, this is certainly an option.
The steps to take in setting up an office in Brazil aren't very different to what you're probably used to – decide on an area, find a suitable premises, arrange a lease, staff, etc. Braanz Consulting can walk you through these steps in Brazil and provide assistance with regard to things such as standard contract terms, market prices, fitout, etc.
That said, establishing an office in Brazil is a big step and a tougher than anticipated transition for many companies. Cultural, language & work ethic differences are a few of the challenges you will face. All of these can be overcome with a well planned strategy and a determined commitment to success.
Joint ventures are a great way to establish a presence in Brazil with a partner that has as much interest in your product succeeding as you do. Braanz can help you to locate a joint-venture partner and arrange for legal and accounting advice with regard to the relationship.
Due to the unique legal, cultural, and especially bureaucratic aspects of Brazil, we strongly recommend that companies entering the Brazilian market consult a local law firm before establishing any binding contract with a Brazilian partner.