There is a raft of sales channels which can be used in international marketing. All have their ownmerits and optimised situations when to use them. This article talks about distributor partner channels and ways to search for them. I’ll talk about signing up and managing distributors and other sales channels at a later date.
In the selling process, distributors represent your brand and take title to your goods by buying from your company at a discount on end-user market prices. They then sell on to the end-user with a mark-up. Distributors frequently add value by getting involved after the point of sale by providing services like customer helplines, addressing warranty issues, installation and service support.
Using distributors, also called resellers, is a low-cost way and effective way of entering an overseas market compared with setting up your own, expensive sales office and sales team. It’s a widely-used sales channel in export marketing.
Here’s the caution – establishing a network of proficient distributors requires careful selection, set-up, and management, and it does take up a lot of your time in your export activities to do it properly.
Now I’m going to blow the ship right out the water by sharing this with you! A typical global distributor network might have 15% of distributors as top performers, another 20% or so are in the category of “high maintenance, and should we fire them and look for another?”. The balance is a mix of those reaching targets or thereabouts with some management focus from the principal. These figures aren’t validated as it depends on such as the nature of the industry but from my experience, they reflect the task involved to start building up and maintaining an effective international selling network.
The steps for setting up distributor partners can be compared with recruiting and retaining good employees. The process involves searching for candidate companies, selecting, appointing, managing, training, supporting, and developing them so they are fully competent to sell your offerings as if they are your own employed sales team. And just like with employees – you have to prepare at the appointment stage for possible future termination scenarios.
In part 2 of this article, we’ll talk about ways to go and search for your partners.