Spring is in the air in the Northern Hemisphere and many companies’ thoughts are turning towards expanding into new international markets. One of the key decisions you need to consider is your route-to-market strategy. How are you going to reach the market? How will you carve out a market share?
Often the easiest way to enter a market appears to be through a local distributor or agent. This is a low-risk strategy on the face of it, certainly from a fixed-cost perspective. But how do you find the right distributor or agent in your target market?
This is a question we are often asked by clients, so have produced a new free guide, available to download from our website.
Download now: How to find a distributor
There are a number of ways to start your search. Choosing the right distributor or agent is critical. Get this wrong and it can severely disrupt your progress in the market.
The first step is to define your ideal partner profile. What type of partner or distributor are you looking for? What is the ideal size of company? Which market sectors do they operate in? Which complementary products will they be selling? What resources do they need to have to be able to best promote your products or service? Any specific experience or technical knowledge they require? And so on. List all the factors that are important to you in your new partner or distributor.
Only when you know what you are looking for, will you know when you have found the right one!
Once you have defined your ideal distributor, the next step is to research the businesses which fit your profile. There are a number of ways to do this which we explore in the guide. It is important to take your time. Draw up a list of possible companies, then review them more deeply for suitability to refine your list to the most likely candidates.
You are now in a position to start contacting your dream list of potential distributors, to evaluate their interest in working with you too. Be persistent. They may not respond to your first contact but keep going until they do. Whether that response is positive or negative, it helps to narrow down your search.
Approach them with details of your product or service and shorten the list to those who show the most interest, combined with required market presence and potential.
Do not rush in, take your time to assess potential candidates, talk to more than one. Visit them, get a feel for the company, who their customers are. Do they really specialise in your market sector?
It is very important to choose carefully. This distributor will be the face of your company in the market. You may well be judged by who you are associated with. Make sure they have a good solid reputation and a long-standing interest in your market.
Also look at their existing portfolio of products or services. Who do they already represent? Are they complimentary or competing? Are they operating in the right market sector? Do they appear to have a lot of products already for the resources at their disposal? Is this a concern?
A well-connected representative can be worth their weight in gold in helping you make entry into the market. With the right connections they can FastTrack you in front of the right customers but beware those who promise amazing things when in reality they are either already fully committed, not in the right market space or have conflicts of interest. It is not unheard of for a supplier to be tied up for years with a distributor who either cannot, or deliberately does not, market it aggressively. Be wary of those who profess to be well-connected or related to the Prince or Government Minister.
Once you have narrowed it down to one or two potential companies, suggest a loose working relationship to start with until you are both sure you are a good fit. See if they produce the goods, open the right doors and hopefully secure some orders before rushing in to an exclusive or long-term contract.
Set clear expectations from the beginning and agree key performance indicators. Assess their actual performance over at least 3-6 months before formalising the relationship. Take the time to build mutual trust, you are looking for a long-term partner, not a quick buck.
When you do enter into a formal or exclusive contract, make sure the basics are right so there are no conflicts later on. In the guide we explore the essential elements of a distributor contract.
Download now: How to find a distributor
Make sure any exclusive contract is mutually exclusive! You don’t want your distributor or agent representing a competitor also.
Remember making the right choice is critical to the success of your market entry strategy. Finding the right distributor can be a complicated and time-consuming process requiring experience and expertise to complete effectively.
For this reason we developed our PartnerTrack service where we help you define your ideal partner, carry out the search, evaluate and approach potential partners to help you select the right one(s) for your business.
PartnerTrack is a cost-effective way of starting your export journey to profits in your new target market. For further information and a no-obligation discussion, please contact us today.