Discusses distribution network from how products enter to final destination, including reliability of distribution systems, distribution centers, ports, etc.
Business practices in Panama are similar to those in the United States. Business tends to be direct and straightforward. On average, Panama City accounts for 65% of the total national sales of consumer goods. The remaining 35% is distributed among David, Colón, Santiago, and Chitré.
Generally, the marketing channel structure in Panama is simple. Direct importers act as wholesalers and in many cases, also as retailers. This model is most used in apparel, automotive parts, and hardware products. In consumer goods, mainly food and medicines, the retail operation is separate from the wholesale operation. For industrial goods, sales are usually handled by local exclusive agents or distributors. In other cases, local firms order directly from U.S. brokers or the manufacturer.
Some of Panama’s leading importers are also regional distributors for Central and South America with warehousing facilities located in the Colón Free Zone (CFZ). Usually, CFZ importers/distributors have affiliated stores in Panama City for retail sales to the local market. We encourage U.S. companies with consumer retail products to look at selling through the Colón Free Zone to the region. For more information on this option, please contact CS Panama.
Most of Panama’s trade moves through the Atlantic ports of Manzanillo, Cristobal, and Evergreen and the Pacific Port of Balboa. The Tocumen International Airport handles the bulk of Panama’s air cargo. Merchandise, especially from the CFZ, is transported to Central America by land. Panama has an efficient terrestrial transportation system.
Most international express delivery companies have a presence in Panama and some local companies also provide delivery services. In general, express delivery firms are considered reliable. Deliveries from U.S. cities typically take 3-5 days. Imports of certain goods like cosmetics and hygiene products produced abroad are restricted to a maximum of two or three products per person when purchased online for personal use. Cosmetics intended to be sold by retailers must comply with Panama’s cumbersome registration procedures.
According to the U.S.-Panama Trade Promotion Agreement, Article 5.7 (g), “Express Shipments (g) under normal circumstances, provide that no customs duties or taxes will be assessed on, nor will formal entry documents be required for, express shipments valued at US$100 or less.”