Partnership Models, Services Provided & Typical Project Steps

SafePassage provides 4 distinct services.

  • Market Feasibility Study (MFS) to determine the market potential for the given product.
  • Distributor Coordination & Import Logistic (DC & IL) to find and manage regional distribution partner across China.
  • Master Agency (MA) to take title to the goods and arrange both importation and distribution.
  • Customized Advisory Services (CAS) to support clients who are developing their own distribution channels into China.

Generally speaking, there are three partnership models that foreign companies tend to follow when entering the China marketplace.

Option One:  “Hands Off” Approach

Serving as the client exclusive Master Agency (MA) in China, SafePassage takes title to the goods from manufacturer at an agreed price and unilaterally develops the local pricing points & local marketing message. As China is such a massive market, it is rare that one agent can service the entire country so the appointed master agent, SafePassage, takes responsibility to arrange regional distributors. This method works best when the principal does not place great emphasis on control of the product pricing and imagery in the local marketplace and prefers to let the master agent sort things out.

In some cases a Market Feasibility Study (MFS) is conducted to determine the market potential for the given product.

Option Two: “Hands On” Approach

Simply put, the manufacturer retains ownership of the goods further down the supply chain and develops their own sales network in China. This includes setting up offices, warehouses and sales teams.  For large companies that already have their own sales teams around the world, this may be the preferred route for China as well. A Market Feasibility Study (MFS) can be conducted to determine the market potential for the given product and SafePassage’s Customized Advisory Services (CAS) can be applied on a bespoke basis to support clients who are developing their own distribution channels into China.

Option Three: The Integrated Approach

The typical SafePassage client desires more transparency and control than found in the “hands off” approach. Yet they are not interested in the massive investment, local market pioneering and lead-times that go along with the “hands on” approach. A Market Feasibility Study (MFS) can be conducted to determine the market potential for the given product and SafePassage’s Distributor Coordination & Import Logistic (DC & IL) is engaged to find and manage regional distribution partner across China. A partnership strategy will be created which factors in the client’s desired level of control and transparency as well as defining the risk and rewards for both parties. SafePassage supports and advances the client’s goals for the China market, rather than steering the client along a fixed agenda and pre-arranged distribution scheme. In other words, the client remains in control of their own destiny in China with out the headaches and dangers associated with going it alone.

Typical Project Steps for the Integrated Approach

The first task is to validate the potential for partnership between SafePassage and the Principal by answering the fundamental question:

“Does SafePassage believe there is a market for the given product in China?”

Assuming the answer is yes, projects typically follow a two step approach.

Phase One- Market Feasibility Study (MFS) is conducted to clarify the following items:

  • market potential
  • import duties
  • product registration process
  • local language labeling requirements
  • pricing strategies, tax issues and terms of trade
  • intellectual property plan to protect trade marks and design concepts
  • distribution strategy
  • identify key trade associations & trade shows

If needed, as part of the Market Feasibility Study (MFS), 3rd party specialists are approved by client and coordinated by SafePassage in order to:

  • conduct focus groups
  • perform competitor analysis
  • research pricing points at a regional or nation level among wholesalers, distributors and retailers
  • complete laboratory testing to confirm product is in compliance with local standards

Based on the results of the Market Feasibility Study (MFS) a partnership agreement between SafePassage and Client is jointly developed. The agreement defines the compensation structure as well as clarifies ownership of product as it moves from manufacturer to market.

Most Market Feasibility Study (MFS) can be conducted in 60 days or less and cost a few thousand USD depending on the complexity of the product/project.

Phase Two: Distributor Coordination & Import Logistic (DC & IL)

Pre-Sales Activities

  • create product name and brand concept in Chinese
  • register intellectual property (trademarks and design concepts)
  • product registration
  • recruit technical sales staff (if needed)
  • develop local language brochures, websites and sales materials

Market Engagement

  • training and coordination of sales staff
  • sub-distributor development
  • accounts receivable management
  • media advertising
  • trade show attendance
  • coordination of warehousing and logistics

If needed, 3rd party specialists are orchestrated by SafePassage in order to:

  • develop local language logos and brand images
  • complete technical translations
  • perform due diligence on potential buyers
  • collect overdue accounts

Distributor Coordination & Import Logistic (DC & IL) services are billed as a % of sales value and/or a monthly retainer.