Monthly Archives: September 2016

Stop the debacle, get high performing distributors

shutterstock_302002850Series “Success with Distributors”: Stop the debacle, get high performing distributors  

Episode 2: Select

For the last ten years I have been working with Australian small businesses from high-tech sectors, from medical devices, biotechnologies, clean technologies, ICT to electronics and advanced manufacturing. What always stroke me during these ten years, is the difficulty for small businesses to generate a high level of sales from these distributors. Now is the time to stop the debacle! In this series I am going to cover a simple process to make your distributors work for you.

In the first Episode, we have looked at profiling your distributor. Now we will focus on selecting your distributor. Too often, I have discussed with small Australian businesses that just signed up a distributor that approached them. They just had not gone through a selection process.

Mapping the distribution landscape is your first step. Now that you have the profile of your ideal distributor or partner, you need to find these in the overseas market. One first very easy way is to check your competitors’ distributors or partners’ network in the selected target country. Just check the “Where to buy” section on their website. Once you have checked the competitors’ distribution, you proceed in the same way with companies that have complementary products to yours. Choose preferably companies that are aligned with your business’ positioning: to give you an example, if you manufacture high-end lawn mowers, check the distribution network of a high-end rake manufacturer. Trade shows, particularly in Europe, are a very good source of information. Identify the largest trade show in your industry in the country you want to target and check the exhibitors list to identify the distributors in the market. Overall the best way is to interview an opinion leader, just humbly ask for their advice. Don’t hesitate to reach out, you will be surprised: people are very happy to share information when you explain them clearly what you need to know and why. It won’t take too much of their time. You just need a few distributors’ names and ideally a contact name to get started.

Selecting is a key activity in this process. Too often, I have seen small businesses coming to me saying that their distributor did not perform well. And guess what, most of the time, it’s because they engaged the first distributor that came to them or they did not do a thorough selection. Now you have your list of distributors, rate them against the selection criteria you defined in your profile. Don’t exclude small distributors, as they are often developing the sales much faster than a large distributor and are often easy to work with. They may bring you your first sales. While you start contacting them, you fill in on a spreadsheet the information against your selection criteria.

First approach When you approach a distributor for the first time, have your company profile and your unique selling proposition ready. You may talk or send an e-mail to the purchasing, product manager or a technical director is appropriate. They are very time poor, so make it easy for them: send them a short e-mail, straight to the point. At this stage, just clearly state that you are planning to launch your product the market and would like to have their feedback about it. You then just add a short paragraph on your positioning and attach a company profile. The other important point is also to let them know that you are going to go through a distributor selection process.  Don’t put yourself in a “begging” position, even though you are a small business and they may be a huge company. It’s just being professional to go through an evaluation process and the distributor, will see that favourably.

These three steps, are an easy way to prepare before you move into the engagement phase.  You may want to download our Tool Distributor Interview Guide online or you can check Chapter 23 of Ready, Tech, Go:  The Definitive Guide to Exporting Australian technology to Europe, today on Amazon for $0.99.

See you next week for the Engage Episode, it will be the third article in our Success with Distributors series

Series “Success with Distributors”: Stop the debacle, get high performing distributors!

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Episode 1: Profile

For the last ten years, I have been working with Australian small businesses from various high-tech sectors: medical devices, biotechnologies, clean technologies, ICT to electronics and advance manufacturing. What always stroke me during these ten years, is the difficulty for small businesses to generate a high level of sales from these distributors, and in our case European distributors. That would often mean, a lot of investment in the overseas market to get the distributor on board and once on-board, sales would be disappointing.

Now is the time to stop the debacle! In this series I am going to cover a simple process to make your distributors work for you.

In this first episode, we will focus on the first step of this process. Profiling your ideal distributor is a great exercise to start with.

Small businesses that already work with channel partner in ICT sector would be very familiar with this exercise. In other industries, small businesses need to look at their current distributors and pick the ones that have worked for them in the past and why. This will maximise chances of having successful distributors. These distributors may be in Australia or overseas, it does not matter. If you do not currently have a distributor.

Let’s start with three simple characteristics to define your distributor or channel partner profile.

Characteristic 1: What type of distributors are right for you?

This is an important point. There are different types of distributors, some are very catalogue selling oriented. They usually have a very broad range of products they sell. It means it will be hard to get their attention, on the other hand they may have a very good foot print in the market.

If your product or solution is more technical, like our clients, you would require a more solution selling type of partner. It means in that case the sales representatives are able to sell a solution solving a problem, rather than a commodity sale.

This leads to the profiles of sales representatives that best sell your product.

Characteristic 2: Which clients and end-users should your distributor focus on?

You need to list the target clients you are focusing on. Who will be the final end-users of your product. This way you can easily check that the distributor is right for you. If a distributor doesn’t currently sell to your target markets or industries don’t waste time with them. A critical success factor is to show them where the low hanging fruits are. Make it easy for them to be successful and sell fast. Therefore, defining this target market is key.

Characteristic 3: Their complementary and competitive product to yours

If you think about your solution, there is an eco-system of complementary products that can be sold along with your product or require the same set of skills to sell it. If I take the example of one of our clients that sell respiratory protection equipment, we usually look at distributors that sell foot protection for example. Then depending on the brand they sell, you can quickly see what price positioning they play in. Are they selling cheap commodity product? Or are they able to sell high-end innovative premium price product.

Another good way is to see if you would have an advantage of selling your products to a distributor that already sell products or solution that are competing with yours. It may offer a good alternative to a distributor, wanting to broaden their range. You may have a nice competitive differentiator, which may allow you to get some market share. You may elect to take the opposite option and choose not to work with a distributor which is selling a competitive product. However, it’s interesting for you to benefit from a distributor salesforce that is always used to sell your type of product, they know the clients and they already a nice set of skills.

These three characteristics are a good start to profile your ideal distributor. You may want to download ourTool to get more detail on the ideal distributor profile online or you can check Chapter 19 of Ready, Tech, Go:  The Definitive Guide to Exporting Australian technology to Europe, today on Amazon .

See you next week for the Select Episode, my second article in our Success with Distributors series.