International distributors use existing business relationships, local knowledge, and proven credentials to help you break into new markets successfully. But they’re in control of one of your most important assets: your brand reputation.
Therefore, you must pick the best international distributor for the job – minimizing risks and maximizing results.
To help, we’ve collated the top questions to ask an international distributor before partnering, so you can find the best for success.
No matter how much you already know about a potential distributor, it’s always good practice to hear a distributor talk about their business themselves. This is where you confirm your understanding, uncover additional information, and get a real feel for the distributor’s potential.
The principal areas to focus on are:
How long has the distributor been in business, and what have they achieved during that time?
The longer a potential distributor has been in the business, the more expertise and contacts they have to make your partnership a success. However, remember quality over quantity. Ideally, you want to see experience coupled with growth that shows business aptitude and commercial mindedness.
What do they know about international distributor partnerships? This shouldn’t be their first rodeo – you want a distributor who knows how international partnerships work, how to make them a success, and what’s expected of them.
What values does their business work under? A distributor becomes responsible for your brand reputation in another country. Therefore it’s crucial their values and business practices complement your own.
Distributors often work across a variety of industries, distributing a range of products. This isn’t a bad thing; in fact, it can expose your products to different audiences. However, your distributor must have particular expertise in your industry.
For example, say you’re a well-known printer brand. A distributor with expertise across office hardware and software (including office printers, audio-visual equipment, and network hardware) will have the ideal audience for reselling your products.
However, you want to ensure most of their expertise lies in printer hardware so they can show expertise when selling your products and representing your brand.
This is often a burning question because you want to know how many orders your distributor can generate for your chosen products. However, this question can and should go much further than simple reseller figures.
In particular, you want to know:
Resellers are an extension of your brand, too. Therefore ensure your distributor only partners with the best.
You want an international distributor that properly trains resellers on your products and supports them to generate sales. This is particularly important for ensuring your products aren’t mis-sold to customers.
Look for a distributor who spends time onboarding resellers and delivers regular training on new products and partner brands. At the very least, brand partners should be updated quarterly and when any new product lines or upgrades are introduced.
Top tip: speak to resellers! The best way to find out about the support an international distributor provides to its resellers is by speaking with its resellers directly.
Large distributors often provide resellers with financing options, allowing them to carry more stock to increase sales.
If this is the case, ask to see the financing options available and the terms of agreement. For example, what happens to stock should a reseller default on a payment?
You can ask about their lending accounts, payment rate, and other factors to get an idea of their financial situation.
Working with international distributors that carry products from parallel verticals is a great way to get your products in front of the right audiences.
For example, an international distributor with audiovisual and networking equipment will work closely with large offices and multi-national corporations. This makes them ideal for distributing similar products such as office printers or video conferencing tools.
The key is to look for products that complement yours, rather than a random selection.
You can tell a lot about a distributor from the brands they work with.
While the names of competitor brands might alarm you, they can help you boost sales in new countries. For example, a distributor carrying high-quality audio-visual brands will be known as such, attracting the right customers and resellers.
They will have also been vetted by brands of similar standing to your own, demonstrating the necessary expertise, growth, and reseller network.
Note: Check whether there are any restrictions on your partnership. For example, an existing partner may limit the number of competitive products a distributor can stock.
Asking an international distributor how they plan to make a success of your partnership is an excellent test of their strengths and vision.
You want to know their capabilities, limitations, projected sales growth, route to market, and marketing strategy – how will they make this partnership work for them and you?
We’ve talked about reputation a lot in this article because it’s super important to protect, especially when it comes to business ethics and corporate social responsibility.
Delve into the details of an international distributor’s policies, practices, and procedures on:
Partnering with an international distributor is an enormous step for your business, and it’s a risky step too. However, partnering with an international distributor has vast potential for reward, making it a necessary step for global brands. These nine questions will help you find the perfect partner for your business and future success.
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