How to find the right distributor outside the UK
Entering new, international territories with your thriving small business is tricky and can be quite daunting if it’s your first time - yet, at the same time, it’s a very exciting opportunity for the brand to grow and expand. But how do you go about choosing the right distribution partner, let alone finding them in the first place?
Lisa Sohanpal is the co-founder of Mini Nom Nom's, a company bringing healthy world food to children. She has over 10 years’ experience in international distributor management across Europe, the Middle East, Africa and Asia–Pacific - and, more recently, the experience of introducing Mini Nom Nom’s around the world. Here are her top tips and lessons for finding the right distributors in other countries.
Imagine the scene: you attended a trade fair and there was a lot of interest from around the world in your products or brand. You now feel ready to expand and export across the seas.
Next you must find that perfect distribution partner and, depending on your industry, there are various ways to source a list of possible partners. Apart from the obvious desk research, you could contact the Chambers of Commerce and Trade Associations (UKTI) who have representatives for each region, who are at hand to help and guide you on the best way to do business in specific countries.
Be sure to be well-informed of legislative or regulatory compliance required for your products within each territory. You’ll need to consider questions along the lines of: will the text for packaging, brochures or labels need translating? What are the cost associated to obtaining these in the necessary formats? What would the costs be to ship your products to that country? Will you absorb these costs, include them into your cost price, or would you charge them separately? What impact would these exports have on your bottom line - and is it really worth it?
Select distributors; don’t let them select you
I normally put together a distributor background and market report template document that I send to the five shortlisted distributors, selected from a round of initial interviews. This report is structured to look at ten things which are crucial to check in the first instance:
1. Have they done their homework, and do they have a fair idea on the market size, competitors and potential for your category?
2. How passionate are they, and do they understand your brand's vision? What kind of commitment will they make to ensure its success? What kind of investment are they willing to make initially and during the contract period, usually two years?
3. What is their sales team structure and experience?
4. What is the company’s reporting system?
5. Due diligence - research trade and reference checks on their business, any reports or reviews in the media, financial status and security, and company audits. How long have they been trading?
6. Speak to existing customers.
7. What is the strength of their experience, credibility and network within the industry?
8. Check their portfolios to ensure they are not representing your competitors.
9. Look for a partner that represents a good company fit – a partner with a culture and strategy that you feel comfortable with.
10. Look at how they work to develop the market with their existing product portfolio. Ask to see case studies for other products they represent.
I would then analyse each report once returned from the distributor to compare and contrast the data against my own findings, in order to validate. This process means I can shortlist the three best distributors, who I’d spend a day with, meeting their team, before making my final decision.
Treat distributors as long-term partners
Each time you make contact with or spend time engaging with the potential distributors, it is important to keep selling your brand and communicating the passion and key messages for your business. This energy is contagious and helps to build a two-way partnership, allowing you to nurture and develop a longer term and fruitful business within that country or region. Treat them as an extension to your own local team and invite them to the same training, events and launches as you would with your own team.
Structure the relationships so that distributors become marketing partners who are willing to invest in the development of their local market. One traditional way of doing this is to grant national exclusivity. A more effective way is to create an agreement with strong incentives for appropriate goals, such as customer acquisition or new product sales.
Work with distributors to build goals and a business plan
Use this plan to form a quarterly minimum order quota that is attached to the appendix of the distributor agreement and forms a measurable and deliverable goal to achieve every three months. Develop marketing campaigns that will help drive sales and share best practice for the local territory. With the support and focus you offer, the distributor will be equally responsible for ensuring those milestones are achieved together.
Spend time understanding the local market and challenges
By understanding their local environment you will be in a better position to offer guidance and support, which can fuel the growth and development of your business. It’s important to ensure time is spent together, cultivating relationships with the local team and meeting the key customers, influencers and decision makers.
Maintain control over the marketing strategy
To ensure your brand image remains consistent and powerful, you must ask the distributor to gain approval of all marketing materials and communications. This should be stipulated clearly within the contract.
I have many examples where I have been shocked to find the brand I was representing at the time was portrayed with either wrong messaging, or was visually unacceptable. These errors can be very damaging. If you have brand guidelines developed, then make sure these are shared and implemented from the beginning.
Mini Nom Nom’s launches in July 2015, locally in the UK with OCADO, Virgin Active and Selfridges. We are in final negotiations with many other world famous potential partners, and from August this year, Mini Nom Nom’s will launch in Europe and selected international markets who have expressed a huge appetite for healthy world food for kids and grown ups. If you want to go global, then selecting the right partner in a distributor and conducting your own due diligence in advance is vital in creating a long term and successful partnership.