Find distributors & business partners in Saudi Arabia

Identifying the top retail chains in Saudi Arabia where you can sell your products is relatively easy. Approaching and convincing them is a much 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.

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    Find the right retail channels in Saudi Arabia

    Saudi Arabia, the largest country in the Middle East, has a population of about 35 million as of 2023. It is the world’s largest oil exporter, deeply influencing its culture, economy, and politics.

    With a high GDP per capita of approximately $23,000 USD in 2023, Saudi Arabia’s economy is heavily dependent on oil, which accounts for most of its export earnings and government revenues. The country is diversifying its economy, with significant investments in sectors like tourism, entertainment, and technology.

    The Kingdom of Saudi Arabia is the largest economy in the Arab world. It accounts for 25% of the Arab world’s Gross Domestic Product (GDP). Saudi Arabia has an oil based economy with strong government controls over major economic activities.

    Saudi Arabia market opportunities

    Strengths of the Saudi market include:

    • No taxation on personal income
    • Proximity to other Gulf markets
    • Key member of the Gulf Cooperation Council (GCC)
    • Largest economy and population in the Gulf region

    Challenges include:

    • Identifying suitable sponsors for initial entry into the market
    • Finding an appropriate Saudi partner for joint ventures
    • Lead time to establish legal entities and obtain licenses from appropriate ministries

    You must apply through the relevant government ministries for licenses to do business in Saudi Arabia.

    Look for a business partner in Saudi Arabia

    You must have a physical presence in Saudi Arabia to be directly involved in the buying and selling of goods. Under Saudi investment law the establishment of a physical presence requires a joint venture with a Saudi partner. You should evaluate your business partner thoroughly. You should take local legal advice and consult.

    Here are some practical guidelines:

    • Prospective partner has the necessary legal entity in Saudi Arabia
    • Prospective partner works in the same field that you are working in
    • Choose the partner who will have an added value for your business
    • Be professional. Do not base your partnership on friendship or personal relationship
    • Have all legal contracts and MOUs reviewed by a local lawyer and an experienced consultant working in the same industry as yours
    • Do all necessary due diligence prior to signing a contract
    • Define clearly the roles and responsibilities of each party
    • Always include an exit strategy in your contract
    • Invest in finding the right partner. Visit them and meet them in person before making any commitment

    Travel to Saudi Arabia for a better impression

    The best preparation for doing business in any country is visiting it. This way you can experience the culture, check the shops and build your network.

    With Trip.com you can compare flights and also book your hotel.

    Hotellook compares different hotel sites so you always have the best rate.

    Localrent connects you to national rental car providers per country.

    How to start in Saudi Arabia? 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 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.

    Customs clearance for Saudi Arabia

    Getting your products imported and delivered in a specific country can be a challenge. I have good experience with Tecex, who can act as your importer of record and even physical distributor. If you leave your details, they will contact you. 

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      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.

      Frequently asked questions

      The best way to find a distributor in Saudi Arabia is to first decide who are the most likely end-users for your product, whether it are consumers or businesses. Then determine where they now buy your product of an alternative. Before starting to push your product, approach a number of them to ask what they find important and for what reasons they would switch supplier. This way you can position and document your product better before you reach out to a broader group.
      First check whether your product normally is sold through an agent in Saudi Arabia or that other distribution structures are more common. Then determine the characteristics of your ideal agent, and find a number of these, or outsource this search. When you approach the first few, you will learn what they find imporant and who your competitors are, and you can get a feeling of the commissions they want.
      For the major supermarket and drugstore chains in Saudi Arabia this may be the case, but it always is difficult. You need a very well documented story and preferably a product that is proven to sell in other countries. Working with a distributor who already has relationships may be easier. Smaller chains and independent stores always buy through a distributor.
      As in any country, convincing a distributor or retailer to put your product in his assortment is difficult. Also in Saudi Arabia distributors look at the rotation of the product, how easy and often they can sell it, and multiply this with the margin they can make on it. The result should be higher than they earn now from any competing product. Only if you have proper sales data, for example from other countries, they will engage in a discussion with you.
      Resellers and dealers mostly not only look at how much margin they can make on your product, but also what additional services they can provide, like installation or maintenance. If you are already active outside Saudi Arabia and you have data from other dealers or resellers you work with, this will make it easier to convince them. Preferably use a local party like Alliance experts to find and approach any potential resellers or dealers.

      Be well prepared. All retailers expect you to prove why they are going to make more money with your product than with their current assortment. So you must know the competition.

      Finding distributors in other countries