Discusses distribution network from how products enter to final destination, including reliability of distribution systems, distribution centers, ports, etc.
As a practical matter, U.S. companies seeking sales of goods and services to the SAG are encouraged to appoint a reputable local agent or distributor with experience in the sector. U.S. companies may consider signing up for the Commercial Service’s Gold Key Service to identify prescreened, trustworthy candidates. There are three major regions in Saudi Arabia: the Western Region, anchored by the commercial city of Jeddah; the Central Region, where the capital city of Riyadh is located; and the Eastern Province, where the oil and gas industry is heavily concentrated. Dammam is the capital city of the Eastern Province, and its metropolitan area includes the contiguous cities of Dhahran and Al-Khobar. Each major city has a distinct business community and cultural flavor, and there are only a few truly “national” companies dominant in more than one region.
American exporters may find it advantageous to appoint different agents or distributors for each region having significant market potential. Multiple agencies and distributorships may also be appointed to handle diverse product lines or services, although this may have its own drawbacks. U.S. firms, particularly in the franchise sector, often choose to appoint a master franchisor or distributor for countries of the Gulf region, which includes Saudi Arabia, Kuwait, Qatar, Bahrain, Oman, and the UAE. While there is no statutory requirement that distributorships be granted on an exclusive basis, it is the policy of the Saudi Ministry of Commerce and Investment that all arrangements be exclusive with respect to either product line or geographic region.
Federal Express, United Parcel Service (UPS), Deutsche Post’s DHL, and Aramex all serve major communities in the Kingdom of Saudi Arabia.