For small businesses that want to venture out and start exporting in the European market, I always advise them to be picky with distributors! It is okay to be selective, even if your business is small. Before signing up a distributor, be sure to evaluate them carefully. Many small businesses are so eager to speak with European distributors that they lose sight of assessing them properly before starting the negotiations.
To help you out with how you can select the right distributor for your business, here are 3 steps that will serve as your guide:
- Mapping the Distribution Landscape
- Selecting your Distributor Carefully
- Be Ready when Approaching your Distributor
Mapping the Distribution Landscape
To locate the right channel partners or distributors in an overseas market, you need to identify your ideal distributor or partner profile. The simplest method is to investigate the distributors or partners of your competitors in the target country. If you check out the “Where to buy” section on their website, you can gain a lot of valuable information. As soon as you have explored the distribution network of your competitors, do the same with companies that have possible complementary products to your business.
Generally, choose companies with the exact same positioning as yours. Think about a high-end rake manufacturer’s distribution network if you manufacture high-end lawnmowers. Especially in Europe, trade shows provide valuable information. Choose the largest trade show in your industry in the country you wish to target, and then look at the list of exhibitors to identify the key distributors in the market.
In a previous blog, I mentioned how important it is for your business to join trade shows or digital congresses. These events will help you gather more information not only for lead generation but also for different distributors. If you want to learn more about trade shows and digital congresses, you can read the full blog here.
If you’d like excellent results, it’s best to speak to an opinion leader, a prospect or a customer – humble yourself and ask for their advice. Reach out as often as you can. You will find that most people are happy to share their knowledge when they understand what you need to know and why. To get started, you will need a few distributor names and, ideally, a contact name.
Selecting your Distributor Carefully
In my years of helping small businesses export in the European market, I often encounter owners who come to me saying their distributors didn’t perform well. Usually, it’s because they engaged the first distributor that approached them or because they didn’t conduct a thorough selection process.
Once you have a list of distributors, evaluate them against the selection criteria you initially defined in your profile. Consider including small distributors, as they can develop sales quicker than large distributors and are often easy to work with. A small distributor may bring you your first sale. Fill out a spreadsheet with all the relevant information about them when you first contact them and compare it to your selection criteria.
Be Ready when Approaching your Distributor
Make sure your company profile and unique selling proposition are ready when you approach a distributor for the first time. Depending on the situation, you may decide to speak with or email the purchasing manager or a technical director. When sending your email, be straightforward and provide a concise message.
During this stage, announce that you would appreciate feedback about your product before launching it on your selected market. Then you can add a paragraph explaining your positioning and include your company profile. Additionally, make sure they know you will go through a distributor selection process.
Don’t take a begging position, even if they are a large company, and even if you are a small business. An evaluation process is merely being professional, and a distributor is likely to view that action favourably.
When you follow these three steps, you will be well-prepared for the engagement phase of the distribution process.
Would you like to identify European distributors? Start with profiling the right distributor profile for your business! Download our Ideal Channel Partner Profile here and get some help if you would like to get started with setting up a high performing European distribution network! https://bit.ly/3qIROZ0
