A distribution channel is the path by which all goods and services must travel to arrive at its intended consumer. These goods are sometimes passed to consumers through multiple channels. While increasing the channels can increase sales, it can also create a complex system that sometimes makes distribution management difficult, especially in an international context.
International distribution strategy
There are generally three ways to set-up international distribution for your products.
Setting up international departments means that your brand will directly enter another country’s market. Although this will give you complete control over distribution, elements like hiring, training staff, compensation and cultural background need to be considered.
Exporting is now made easier with online tool. Although the internet may take over some sales function, promotion and shipping continue to stay offline to a larger extent. Having local distribution partners may play a role in this.
Working with distributors overseas
Overseas distributors with experience in shipping and importing have the fastest and easiest procedures when it comes to selling in the foreign markets. These consultants can help you establish your company by handling distribution on your behalf.
Key ways to find and mange international distributors
To get your company’s desired international distributor you will need to ensure they have a good reputation so it aligns well with your company’s brand, and has enough reach to sell your product. It is also wise to agree on your company’s product offering and create a beneficial agreement for both parties.
Distribution in a foreign market requires a good working relationship between your company and the international distributor, as well as looking after the brand that you wish the world to acknowledge. This requires constant checking and processes for accountability, especially in the beginning. It pays to visit your distributor, provide product trainings where necessary and consult about marketing promotion and strategy.
It is important to evaluate your export distribution channels on how they stand against other foreign competitors and local preferences. This will provide insight to their performance. You must also weigh the expectations of the company on your distribution support. Discussion of requirements for minimum inventory is also a useful indicator. Foreign distributors will display their best performance, and it is up to you to make them prove their capacity and worth. When evaluating the candidates for your distribution, keep in mind how well they realise your goals for sales revenue for their country.
Maintaining a Good Relationship
Some international distributors focus more on sales rather than technical service. Before entering into a contract with the distributor, it must be clearly stated what the international distributors are accountable for. Facilitating good relationships between international distributors and suppliers is key to ensuring the distribution process runs smoothly.
Generally, difficult technical problems are usually handled by suppliers, while more trivial issues and support are covered by the distributor. Ideally, there should be a good rapport between the distributor and the supplier to optimise distributor performance. This can be enhanced further by sharing your company vision, practices, and resources with your distributors to create trust between both parties.
To be mutually beneficial, your business should know the distributor’s company well in order to have an impact on your trade relationship. In this way, you foster respect for your company and their genuine assistance to help you reach your ultimate goals.
Ways to measure success of your distributors is by gaining feedback from end customers. This helps create a harmonious relationship between you and your distributors. Feedback can call out service or item incidence regarding your items. As a supplier, this feedback could improve your service and items, which in turn, increase the sales and positive image of your distributors.
Distributors are essentially partners. As a manufacturer or supplier, it is important to treat them with respect the way you would treat your own employees. Distribution, especially international, is a specialised function that requires great skill to prosper.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.