The question of what method to employ in developing a business in Latin America depends primarily upon your capital and the nature of your product. Obviously we manufacture numerous things that these countries cannot use. Many of our manufacturers seem to be totally unaware of the goods suitable for these markets or their peculiar requirements. I have met a man in Brazil selling, or rather trying to sell, snow plows. It is quite apparent that no amount of exploitation or argument could possibly produce results with such a commodity. With the exception of a few of the more southerly cities of South America, and some located in the highest mountains it would be useless to send a representative to these fields for the purpose of introducing a heating system, no matter what virtue it might have. I know of an American canoe manufacturing concern advertising its wares in a portion of the Argentine which is absolutely dry and without navigable water, as a result of which imported bull frogs die of old age without ever having a swim. It therefore behooves one to make a full and exhaustive investigation through all possible sources of information, and ascertain if one’s goods are really appropriate for these lands. Another point worthy of consideration is that wares especially adapted to the uses of some countries may be totally unfit for others. Accurate preliminary data of a reliable nature may generally be obtained by addressing the United States Consuls located at the various seaports of the Latin American countries. These gentlemen are especially equipped for obtaining all the information necessary, and are charged by the United States Government to supply complete details to inquirers.

The wisest and best plan, once you are determined to enter these fields, is for one of the heads of the firm or one of the leading officers of the company to make a preliminary tour through the lands in question for the purpose of studying the situation and ascertaining the demands existing for similar lines. On such a trip prices should be carefully observed, strict attention paid to duties, freight and other incidental charges. It is by noting and studying these conditions that you will be able to meet and overcome competition. Special care should be exercised in giving the natives just what they want and not in trying to foist on them the thing you wish them to have, even should it be better, cheaper and more practicable. With this object in view, local dealers and merchants should be interviewed and care taken to ascertain every detail that might possibly have any bearing on your future marketing plans. Being thoroughly prepared in advance helps materially in smoothing the road to be travelled. Samples of competing lines with prices and minute data of all kinds should be sent to the home office for reference purposes.

It will soon be apparent, assuming that the official or representative who has gone over the field finds it pregnant with possibilities, that your business in Latin America may be conducted upon one of the following lines:

First. The opening of your own branch house for each country, or for a group of countries.

Second. Establishing an exclusive agency for each country with a resident merchant therein.

Third. Selling through your own representative directly and conducting your own shipping and banking.

Fourth. Marketing your article through some American export commission house.

Fifth. Exploiting your goods through your own representative and turning the account over to a local or native commission house or merchant for forwarding the goods and collecting for the same.

Sixth. Uniting with several manufacturers in allied lines and sending one salesman to represent you, on a co-operative plan.

Which of these particular forms of introduction is best adapted to your special line is a matter for you alone to determine.

Assuming that your capital and commodity warrants you in establishing a branch house in each individual country or in a group of countries, which is by far the best plan of conducting your business, the question of prime importance is that you should be located in or near the leading seaport in order that you may be close to shipping as well as to be able to superintend personally the discharge of goods and their clearance through the slow moving native custom houses. Great care should be taken to be on the leading line of railway, or near as many different lines as possible in order to facilitate the forwarding of goods to their destination and to the interior. These are vital factors and should be carefully weighed in determining your location. If your business is one requiring the carrying of a large and varied stock, it will be rather difficult to get proper warehousing accommodations especially in the metropolis or port and it may be necessary to erect your own building for this purpose.

The adoption of this system of introducing a line of goods requires careful planning and too much stress cannot be laid upon the selection of a tactful and experienced manager for your venture. Banking arrangements must be made. Municipal and state taxes must be provided for and the thousand and one details attended to that are unknown and unheard of in this country, each one of which requires patience and tact in solving and means the expenditure of money and the apparent wasting of much time. In other words the initial expense involved is far greater than a similar undertaking would be in the United States or Europe and only a business yielding large profits can be expected to withstand the immense financial drains to be incurred. While the salaries of the native office help will be comparatively smaller than the prices paid in the United States, still there will be noted an increased cost in maintaining a travelling force as well as the necessary American employes of the staff. Transportation charges are high and the cost of a salesman on the road in any of these lands means fully double the expenses of a similar man in this country. Travel facilities are poor, distances between markets long and much time must be consumed in each city visited, especially in the preliminary trips, all of which increases the cost of the traveller, and for the first few years makes him a rather expensive luxury. This must be submitted to with patience for upon his efforts depends your success. It therefore follows that the business to be done must be a large one to afford such preliminary charges and its future outlook must be of the brightest character. That such agencies can be maintained at a profit however is proved by the fact that all the large houses of Europe prefer doing business along this line, and within comparatively recent years this is the method being employed by the big American houses and corporations venturing into these territories. The Standard Oil Company, the Vacuum Oil Company, The Singer Sewing Machine Company, The National Cash Register Company and many of the larger mercantile houses and manufacturing concerns maintain their own branch offices in the principal cities of the Latin American countries and are entirely satisfied with the results.

The establishment of your own agency in a country indicates to the public your intention to become a portion of the native business community and gives you a solid standing with the trade besides bringing you in closer and more intimate touch with the consumer. It has many other advantageous features which must be apparent.

Should your business not warrant such an outlay, the next best method of approaching the situation is the appointing of some high-grade, resident merchant, either foreign or native, in each country, as your exclusive representative. It is obviously unnecessary to state that in making such a selection the greatest care should be taken to investigate most thoroughly the business reputation and financial standing of the one appointed. Very often it is wisest to give your agency to some small, young aggressive firm, with limited capital, rather than to a staid old house with much money and prestige. These suggestions are given for what they are worth. Common sense will indicate the concern which in your good judgment is best adapted to represent you properly. Old established houses generally have the capital and means to introduce goods through the country and will often guarantee to place a certain amount of business within the year upon conditions to be specified. Once you have placed your agency, be sure to turn over all inquiries or orders received from within their territory to them for their attention. This I regret to state has not been typical of American houses and has done much to make responsible firms hesitate about accepting exclusive agencies. A strict adherence to this suggestion will tend to establish your honesty of purpose and will be deeply gratifying to your local representatives.

The house accepting your agency will have its own salesmen to travel the country and to introduce your line to the trade in addition to other appropriate means toward this end. They will be only too glad to have your representative accompany their local man from time to time and are highly appreciative of such an interest, because it stimulates both the customer and their representative and at the same time gives you the opportunity of knowing just what they are doing and what they have to overcome in the way of prejudice and competition. It is always well to aid the local agency with a small advertising allowance, to be spent as your combined judgments may dictate. This gives a further evidence to them of your desire to go after the trade and keeps their interest more intense on your line. Unfortunately too many American houses think that it is unnecessary to spend any money in advertising their goods in these lands. The sooner they take advantage of the advertising possibilities afforded by these virgin fields the larger and quicker will come the returns. Very often it is advisable to make specific allowances to the firm holding your local agency with a view to having their representatives make special trips in your behalf. These are, however, all details to be worked out advantageously between the contracting parties and will suggest themselves as conditions develop.

In the event of your organization having an export department, properly equipped to conduct correspondence in the native tongue and give direct attention to the banking problems arising as well as to shipping and forwarding it is advisable to have your own traveller, or travellers, to cover one or more of the countries or all of the territory involved. This keeps the home office in closer touch with all the details of the business and is to be commended in certain lines of trade but is only advisable when one’s foreign department is thoroughly perfected and in the hands of a competent manager.

Orders sent in by your traveller will contain such complete and specific instructions as to forwarding and banking that they can be intelligently handled at a minimum of expense with your own force. It should be observed however that your representatives for the first few years should make the entire territory once every twelve months at least, and oftener if conditions warrant, in order to keep your goods continually before the dealers and to engrave upon their memories that you are in the field to stay and wish to cater to them and their wants.

If conditions are such that you cannot afford a personal representative the commission export house offers opportunities for bringing your goods to the attention of the native dealer. There are many of these concerns situated in all of the larger cities of the United States; New York, New Orleans and San Francisco being especially well provided with them, owing to the fact that they are the largest ports in the East, South and West respectively and have excellent forwarding facilities. As a rule these firms are well supplied with capital and capable of rendering effective and efficient services. They are open, however, to the one objection that most naturally they will give the greatest attention to the line yielding them the largest profit, and just how to induce them to handle your goods to the exclusion of other competitors is a problem to be solved by you with the concern you decide to use for your purposes. Furthermore, it should be your express duty to see positively that your customer is thoroughly protected against the commission house making any additional charges or increasing the original price quoted by you to your client. This has been a common practice, and has had the effect of tending to retard business and prejudice trade in these lands.

As a rule these agents pay cash for goods when delivered, a feature which has its attractions to the manufacturer or merchant working on a limited capital and requiring his money promptly. Their financial connections are of a kind that enable them to do this, allowing a very small commission for their trouble. In addition to all these features they have a corps of experts familiar with shipping procedures, insurance problems, the routing of freight, packing, banking, as well as the details of foreign correspondence so that much of the complications and annoyances of the export trade is taken from your shoulders and borne by men familiar with the entire subject. Every few months it is the custom of many of these organizations to send their representatives through the entire Latin American territory with the idea of developing trade and receiving orders. There can be no question as to their place in this field or as to their general efficiency, and it is always well to discuss with some high class commission export house what they can offer your particular line when contemplating the possibilities of doing business in these lands.

A few American merchants have found it expedient to sell goods through their own representatives, turning the accounts over for delivery to some local concern for the purpose of forwarding the goods and making the collections thereon. While this may be advisable under some conditions, still it is not a practice to be commended and is only warranted when the local or native commission agent is of a high grade and financially responsible and where the purchaser is likely to impose upon the buyer through some of the many methods in vogue among a certain type of small native business men.

Rather than entrust the future of one’s business in the export field with an inferior representative, it would be better to co-operate with several manufacturers in allied lines, and send one man to represent the entire group. It is questionable if one traveller could do justice to more than five or six lines and they for obvious reasons should be related to each other, the principal idea being to economize the time and expenses of the one handling them. For example, a representative might carry neckties, shirts, collars, socks, and men’s underwear and hats, or such lines as corsets, stockings, ladies’ underwear and shirt waists might be effectively presented by one salesman.

The strictest care should be taken in the selection of the person to represent each group of merchants and under no circumstances should lines which might sooner or later develop into competing ones be allowed to be carried.

Such an arrangement appeals particularly to the smaller manufacturer or merchant in that it brings his goods to the attention of the foreign dealer at a minimum of cost with a maximum of efficiency and paves the way for developing the market. Many of the leading sellers in Latin America to-day had their start along this line of co-operative selling.

Whatever medium you may feel it wise to select in entering these fields, bear in mind the fact that under no circumstances should your representative overstock the buyer with goods. It is far better to receive small orders at first than to sell large ones which may move slowly. Climatic conditions are such that in Latin America many goods, unless sold quickly, rapidly deteriorate and the consequent loss will fall on the individual merchant and result in complaints from the buyer if he becomes the possessor of damaged goods, thereby prejudicing your article in his sight. The salesman in thus cautioning a dealer will exhibit his material interest in the future welfare of the merchant and more thoroughly establish a substantial business friendship with his client.

In many of the countries of Latin America, owing to their enormous extent and lack of travel facility, as well as the exorbitant local freight rates and great distances to be traversed it is often wise to establish more than one agency. In Brazil for example, it might be well to place agencies in Rio de Janeiro, Santos, Bahia, Pernambuco, and Para, for the simple but sufficient reason that the freight on goods from New York to any of these ports direct, is less than the local freights between many of these cities. To get from Callao, Peru, on the west coast to Iquitos on the eastern boundary of that republic is a difficult problem. It is really quicker, cheaper and far more convenient and comfortable to come first to New York, then go to Brazil and up the Amazon, to Iquitos, than to undertake the hazardous journey of many weeks across the risky overland trails through the interior of Peru. Assuming that you were desirous of giving an agency for some special line of merchandise liable to be a good seller in the eastern frontier of Peru as well as throughout the republic, one agency should be placed in Callao, or Lima and the other in Iquitos. In Chile, it is likewise often advisable to place an agency for goods in one of the northern ports of the republic as well as in Valparaiso, or Santiago, either Iquique or Antofagasta being selected for this purpose, as being best adapted to reach the center of the nitrate industries.

Many of the Central American countries, particularly Nicaragua, Guatemala, and Honduras, as well as Mexico, having seaboards on both coasts will present problems for determining the location of agencies accessible to both oceans. These and other conditions will be continually arising. After discussing the matter with your factor or your representative, common business judgment will be the only safe and sane rule to warrant you in reaching a decision.