Find distributors abroad
Identifying the top retail chains in a country is relatively easy. Approaching and convincing them to sell your products is a bigger challenge.
It may be a better strategy to find a distributor first who can help you to get your products in smaller chains or individual stores, and then help you to get to the big names. Or to start online.
In this article you will find more information on the retail market and guidance on how to convince retailers and distributors to work with you.
How to start? With distributors, retailers or online?
If you have a consumer product that you can’t sell directly from your home country to your end customer, you need at least one step in between. This can be a distributor (who also acts as wholesaler or importer), a big retailer directly, or it can be a large web shop. Let’s look at the pro’s and con’s of each option.
Distributors
- Distributors are used to import, store and physically distribute a product.
- They normally don’t invest in promoting your product to consumers.
- They are the best chance to get your product in the market so that you can gather sales data.
Large retailers
- Retailers are very risk averse, may ask for a listing fee before they put your product on the shelves.
- They can help you promote your product in their stores and in their magazines, but will also ask a fee for this.
- They are the quickest route to the mass market, if you can convince them.
Online
- Specialised web shops may have a greater interest in your product than general web shops.
- They can experiment more easily with pricing and ways of promoting.
- Volumes may be lower, but working with web shops is still a good way to collect reviews and get brand awareness.
Key question of any distribution partner: how much will I earn?
Distributors, retailers and web shops are risk averse, they know the portfolio they have and tend to be happy with it. They can’t just add a product or service to their range, since it will cannibalize on others:
- A retailer has to take another product from the shelf to make space.
- A web shop only can push about 20 products on the home screen, the rest is in the ‘long tail’.
- A wholesaler with representatives will only offer his retail clients a limited choice to increase the chances on a sales transaction. If they push your product, they need to stop pushing another one.
This means that you have to clearly show a potential channel partner the benefits of working with you. Often brand owners or manufacturers see it as the task of the distribution partner to search for the possibilities in the market for their product and to make the marketing plan. This may work if you are a famous brand in a neighbouring country, but not if you are unknown in a market.
Contact a consultant in the country where you want to do business
How to draft your distributor pitch?
I always put a lot of emphasis on drafting a good distributor pitch. Even if you already have great sales materials for your end-users, this often does not make clear what the benefits are for a potential agent, distributor or retailer to work with you.
When you approach potential sales channels with your standard documentation, chances are high that they are holding of. If you make it crystal clear what are the benefits for them, like in the example presentation, you will get a much higher response rate.
Please note that it helps to put concrete data in your presentation. You may think it is sensitive, but just know the secret is in how you achieve the rotation or the low returns level, not in the data itself. So share it here, in order to get the right attention.
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Frequently asked questions
Orient on a new country by going there and understanding the business culture, for example by attending a trade show. Once you understand the market structure, you can describe your ideal distribution partner and start searching for these kind of companies.
A distributor search abroad always start with some market research. What is het normal sales channel for your product or service and what distributors (or possibly big retailers) are involved? Only if you know the target, you can search and approach them, and pitch your product or service.
Where it comes to logistics, there is a number of companies that can help you globally. Where it comes to sales, most distributors or retailers work locally or on a country-by-country basis. In that case you have to set up a search in multiple countries, find the right companies and decision makers and convince them to sell your product.
Distributors are risk averse, they know the portfolio they have and tend to be happy with it. They can’t just add a product or service to their range, since it will cannibalize on others. So in order to convince them, you need to give them the data they need, and if the contribution margin is higher than for the current products they have, they may give it a try, if you support them enough with marketing materials and actions.
Distributors are often hard to find, and except for a few niches there is no database where they are listed. This means that per country you have to find them using local networks and people. Once you have identified the companies, have them approached by a local person to enhance your chances to find and convince the right decision maker.
The best way to check foreign distributors is to engage a local person who can visit can premises, access published financial information and who can talk to various stakeholders, such as other manufacturers.
No, there is no specific search engine to find distributors. Also because distributors can profile themselves with general names as trader, reseller, dealer, importer and that in various languages.
There are various companies offering a wholesale distributor search service. We do this in over 30 countries, and we can find the good distributors, but also approach the right decision makers and pitch your product or service in the local language.
Wholesale distributor can not always be found easily on the internet. And option is to do a backward search: contact the shops where you want to have your product, and ask what distributors they work with now.
We mostly don’t recommend to grant a distributor exclusive distribution rights directly, or at least not with conditions, such as a minimum sales volume.
