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