There is one magic trick that can stop you from making a bad decision when choosing a distributor/dealer/agent. We will explain to you what it is and how you can take advantage of it.
The magic trick? Ask your customers!
This is as simple as that. When you are in the process of choosing a distributor or an agent, take some time and organize a local trip to ask your end customers.
Who are they buying from?
Is this distributor a good company?
Are they giving the end customer a good service?
What do the customers think about the distributor’s pricing?
Who are the other key players in the market?
Do they have the contact information of some other good distributors/agents you could also meet to compare?
This is the best way to validate your choice. Sometimes export managers are saying there is no time to do such surveys in the market. The question is: do you really want to rush when you are choosing someone you expect to be efficient and to become a partner for many years?
You cannot afford to start again the process of choosing another distributor in two years because you have selected the wrong one. Neither your company can afford its brand image to be screwed up by amateurs.
Other side benefits of this method
They are much more benefits of this method. You can for example grab other information about the market such as who are the key opinion leaders in your field, who are the best entities to partner with, how is the market structured, average size of product sales in the country, etc.
Your end customers will also remember this encounter and will see your brand as caring about the final customers. It will automatically create a bond between this customer and yourself. It will make you an ally for a long time and you will be able to have market insights before other people. You would like to have future feedback about your new distributor, and this customer will be there for you.
The trap to avoid: choose the right customers to survey
There are two things to keep in mind: first choose the right final customer for you. For example, if I sell a premium product and that I have selected potential final customers which have no clue what quality and expensive products are then I will get terribly wrong information about who I need to choose as distributor/dealer. So, when selecting the persons you want to interview, you will need to choose them in your core portfolio / core customers’ profile.
Try also to mix them a little bit between types and geographical regions (old companies/customers vs young people, from different cities, etc.). You can find good distributors for small geographical area, or focusing on few customers and not being efficient on the overall country, etc. Therefore, try to survey the market correctly by enlarging your horizons.
Secondly, remember that a customer might have a special relationship with a distributor. Some people will recommend a distributor because they really like them and they want to help you. But sometimes it is only a reason to get something back from the distributor they have. Some people could have a secret agenda in mind.
How powerful this tool is: from my personal experience
One day, I had to choose a new distributor for a specific country (for a company with expensive quality products) because I inherited of a bad one from my predecessor. After visiting 4 or 5 companies in the market, I decided to take half a day visiting final customers.
Amongst all the companies visited, I kept 2 as my favorites. One made me a great first impression, the manager was efficient, professional with a very nice location.
When I decided to ask few questions to end users, they all said that this manager is really not the best guy I need to work with and that there are much more nicer companies to work with.
If it was not for the advises of these final customers of mine, I would have probably chosen this bad distributor.
My conclusion for you is: always double check information!
Pic: Samuel Zeller_Unsplash.com