How to appoint an overseas distributor

Presenting some key advice from logistics consultancy Reneport for what you should look for in a distributor you can trust.

OK great, so you’ve received this enquiry from a company in another country who loves your product and believes they can sell thousands of units!

They make a couple of sizeable orders and request that they become the distributor for that territory. With the excitement, the agreement is written up and you’re now exporting to country X…

…12 months later there hasn’t been much activity, the optimism has dropped and the excuses for lack of sales continue.

All too often businesses appoint an overseas distributor without doing their homework first!

Appointing export trade partners should be treated like any other investment into your business. Once you have attracted genuinely interested buyers it is important to ask the right questions and find out more about their company.

Some of the key information you need to assess the ability of a new distributor:

They have sound knowledge of the market

This should correspond with the research you’ve previously carried out on the territory.

They have studied your product

They fully understand the features, benefits and selling points.

Evidence they can sell

Best identified by spending time in the field with one of their sales staff.

They are financially sound

Evidence of accounts and financial search within the last 12 months.

Ability to advertise

Demonstration of past and existing advertising campaigns for the other products they represent.

They have the facilities to manage your product

Ensure their facilities are capable of handling the volume of products you’re anticipating. Is there room in the warehouse? Do they have handling machinery? etc… In some cases the storage and logistics side may be outsourced.

The sales coverage of the territory

Identify geographically, their business locations and the locations they sell into to ensure all areas are being serviced.

No danger of damaging the brand

Ensure their company values, attitudes or religious beliefs will not attract any negative media that could conflict with your brand.

They can provide strong references

From the other brands they represent in your industry.

Sales history of non-competing brands in your industry

Again, evidence of sales by product of other brands represented.

Ability to provide aftersales / technical support

See evidence of existing aftersales support, is it relevant to your product?

Willingness to engage staff in a training program

Obviously it’s in everyone’s interest to ensure employees are trained properly to sell the product. If they don’t already have programs in place, make sure they are willing to work with you to implement one.

Most of these questions can only be answered with a market visit. Although the internet has made it possible to do most things virtually, it’s never advisable to enter an export market without travelling there first.

It’s important not only to understand the market and people you are dealing with, but also shows your commitment and willingness to invest in relationship building.

Doing your research and homework to help you find the right partner, will ensure your products stand a much bigger chance of being successful in the long term.

It will also save you the time and money involved in going through the appointment process again, which in turn allows you to focus on growing that relationship and continue generating export orders.

Further reading on exporting

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