How to Find an Overseas Distributor
The right international distributor can equal sales success.
So, you've decided to become an exporter. Now what?
For starters, get ready to do more business. Only about 5 percent of the world's population lives in the United States. That leaves approximately 6.5 billion people outside our borders who could be interested in your product. (Read my column " Selling Overseas " to learn more.)
But here's the thing. Unless you sell something that most people buy online, you're going to need someone to represent you in those foreign markets. In most cases, that will be a distributor in another country--someone who will buy your goods here in bulk and resell them, either directly to end users or to retailers. The trick, of course, is to find a distributor--or distributors--you can trust to market your products effectively. A good distributor also can help you negotiate the ins and outs of doing business in an area, from dealing with customs to meeting local safety, labeling and packaging standards.
Where Do You Look?
There are several ways to find these global go-getters. ConveyWeigh LLC , a Beverly, Ohio, company that makes and sells industrial conveyor belt scales, found its distributors by advertising in trade magazines with an international readership. It also asked for recommendations from other companies that cater to the same type of customers it serves, says general manager Austin Amos. Today it does business in more than 20 countries.
In addition, suggests David Archer, president of International Business Trainers in Barrie, Ontario, you might seek help from the federal government. Like virtually every other country in the world, the U.S. wants to increase the quantity of goods it exports. To facilitate that, the Department of Commerce's International Trade Administration , through its U.S. Commercial Service, operates a network of 107 Export Assistance Centers in major cities across the country. The export and industry specialists employed there can help you find appropriate distributors in your target markets.
Don't expect the government to do all the work for you, though. Before contacting one of these offices, identify two or three countries that you think would be good targets for your products--and be prepared to explain why. Also think about the type of distributor you'd like to do business with.
"The people in these Export Assistance Centers get all kinds of inquiries every day from folks who say, 'I'd like to export, can you help me?'" Archer explains. "What they really want to hear--and what will make your inquiry stand out--is, 'My name is Joe, I manufacture this product. It works really well for this kind of customer, and the right distributor will be good at reaching my target audience because they will have the following types of resources: a strong sales force, an aggressive marketing machine, an existing customer base, [and] a lineup of products similar to mine.'"
Due Diligence While Getting Started
Once you've identified a distributor that you think would be a good fit, talk to other companies it represents to find out how the relationship is working. Archer recommends that you visit the distributor, too. "Canadians and Americans can do business without barbecuing together and getting to know each other's kids, but in most markets, that's not the case," he explains. "Traveling allows you to develop the personal relationships that help business partnerships prosper. Also, you can more easily assess the distributor's capacity. You can see if they have a nice professional office or operate from a hole in the wall, for example, or if that picture on their Web site is really their plant."
Assuming everything still looks good, go ahead and try an initial order with the distributor. You'll probably want to be paid at the time of shipment, rather than offering credit terms, at least until you become comfortable with the distributor and its business practices. ConveyWeigh, after six years in business, still insists on being paid when its merchandise leaves its loading dock.
While it may seem like your role in the exporting game is finished at this point, Archer argues that it's really just starting. To make a go of it, you're going to want repeat orders from your distributor. That won't happen, he says, if you don't give the distributor the support it needs to market your products successfully.
Stay in Contact, Be Proactive
Maintain regular communication. Get to know alternate contacts at the distributor, visit them on occasion, and make periodic phone calls to find out how things are going and what else you can do to help the distributor move your goods. Above all, make sure the distributor understands how your product or service works, and which features and benefits should be emphasized to end users. You may even want to make a joint sales call with the distributor from time to time to demonstrate your product or service in a way that resonates with its customers.
You also might want to create a one-page selling sheet translated into the distributor's language. "English is the business language of the world, and your German distributor can speak English," Archer observes. "But his German is better, and reading about your product in his own language will resonate more with him. It also shows respect for other people's cultures."
With the right distributor, selling overseas can be easier than you might have imagined. So go ahead, stretch your horizons. You've got 6.5 billion reasons to try.
A former reporter for The Wall Street Journal and Dow Jones and contributor to Barron's, Randy Myers is a contributing editor for CFO and Corporate Board Member magazines.