How to find good distributors

[IATM]

Hi All,

I am at a certain stage in the business that I would seriously like to start doing wholesale/bulk orders in the UK and worldwide however I do not havew much knowledbe or experience on the best way to do this.

Besides the usually google and looking for distributors looking for new products what else can I do and should look for in a distributor.

Many times we get companies approach us to stock our products but to be honest, I have been so busy that I never get round to asking them what they would like and how they want to proceed.

Would very much like to develop this side of the business.

Any Advise would be great.

Thanks

[andy-xr]

I went through this setting up an IT company's sales operation. Bear in mind that this was IT hardware, so not all of it will be relevant

There's 2 types of distie; broadline and boutique. Broadline is great when you're established and stuff will fly off their shelves. But trying to get into them when you've got 0 runrate is hard, and they'll never sell for you

Boutique tends to focus more on the product, it's benefits, how it fits into their existing portfolio and what they can attach it to as an extra, or use it to open a door with for another product they have. Put simply, if a distributor sells envelopes, it's probably a good idea to sell stamps and pens as well.

How are you going to market over the next 18 months. If you go channel you need to stay channel, otherwise there's gray areas on who's dealing with what. I made the decision to make all my business channel filled. It meant I was giving 40% discount on product sales, I was putting together Marketing development funding and I had a funded head at the distributor. For 4 months I lost money on every deal I did, because they were small deals that I had to generate and backfill my channel partners with. Then they started selling and I made all the money back.

If you're selling widgets that are slightly different to wodgets but they do the same thing, you'd probably need to have a good online sales channel and you use distribution as an insurance / credit risk management and stocking house.


Never give exclusivity on a product or a region, because it'll bite you in the arse. The people who ask for exclusivity are saying they dont have the means to sell properly now, but they might in the future.

Marketing funds will trump the amount of distributors you have, but there's no harm in signing sub distributors. They are after all an extension of your sales team

[VEIGHT]

Wrong distribution can set you back over 2 years in certain countries! Choose carefully.

For export - it is worth speaking with a UKTI advisor.

Very helpful!

[Tallow]

I've set up a distribution and reseller network that now covers about 30 countries worldwide. Indeed finding the right company to partner with is vital to success.

The thing is though, what is right for one business is not necessarily right for another. Could you give us some idea about what sort of thing your company does?

[DSLiverpool]

Take a small stand at a trade show - you'll make lots of contacts and maybe find some partners.

[IATM]

Thank you for your replies everyone.

I think this is the main issue that I also need to evaluate: the direction I want to take in order to expand the 'wholesale' side of the business. In my mind there are a few avenues I can think of:

1) look for self employed sales agents who will have their own methods to get into small clinics/stores in order to sell our products in small bulk
2) Actively look for a distributor or a few distributors and sell the products this way
3) Advertise we are looking for distributors and see what sort of applications we get

We sell healthcare products specifically for people suffering from certain conditions - one of them being back pain. I have recently been working on a new range of products.

We had someone approach us from the UK who buys from us and sells in Saudi Arabia. He has been doing this for 4 months now and steady buys 500 units per month and just today states to get a quote over to him for 5,000 units. This is the sort of business I would love to be doing. Early on in our first discussions he mentioned about exclusivity for this area and I said ok but it was for a strict 6 month period only and this could be terminated at any time by me with a valid reason and would be reviewed at the 6 month mark.

In my head its the potential of having something like this in say 20 countries. Would be nice.

[hman]

For me option 2 has worked the best, I now have a global network of distributors covering 25 countries.

A decent amount of desk based research, a proper distributor agreement, last 2 years of their accounts and visiting their country to gain info on the company and culture.

UKTI have some good grants available, pick and choose which one suits your business.

Took me 24 months so that's basically 1 new country a month, exhibitions work but you must choose carefully as there is a lot of dross turning up.

My best distributor is in Aus, I literally googled what I would expect a customer to google when looking for similar products to ours and then choose the highest one on Google, researched the company, made an appointment and booked a plane ticket.

They took 30 systems for stock (£100k investment) and are now taking anothe product line which will be very big for them.

Support is really really important for distributors so think about how you will support a global network. Some days I have worked 26 hours due to time differences lol!!

[IATM]

hman: Thanks for your insight - it helps to read real life examples. You raise an excellent point about the support structure and that is something I will seriously need to look into as the company already struggles with the current man power.

I have seen UKTI mentioned a few times, I hold my hands up, until now I knew nothing about them so will spend a good few hours reading the website and what they do tomorrow.

What has been your experience in dealing with them and is there anything I should think about before communicating with them?

Thanks

[andy-xr]

swerni said:

Which distie did you go with. .
Distribution has changed an aweful lot over the years

VAD in Germany a d US who had investment from Ingrams, I'm not in the channel now so I haven't seen all the consolidation that's happened over last 5 years

[hman]

IATM said:

hman: Thanks for your insight - it helps to read real life examples. You raise an excellent point about the support structure and that is something I will seriously need to look into as the company already struggles with the current man power.

I have seen UKTI mentioned a few times, I hold my hands up, until now I knew nothing about them so will spend a good few hours reading the website and what they do tomorrow.

What has been your experience in dealing with them and is there anything I should think about before communicating with them?

Thanks

Glad to help, I should mention that being in contact with your distributors regularly is really important and something which can easily slip under pressures of work. In fact I have just reminded myself to phone my guy in Finland.

Anyway - UKTI, basically they are very useful, you will have an area rep who you need to have a meeting with to discuss what you want to do , where and how. They will then advise whats available to you. The seminars are OK, the webinars are typically really good and the 2 day courses are very useful.

I did the Gateway to Global Growth which cost £750+vat but gave back way more than that so was totally worth it.

UKTI potentially offer you an OMIS report on the countries you want to go to, this is basically a country by country report on markets you are interested, markets which may also be of interest, and a couple of companies which UKTI will vet for you as being possibles for distributors . I have never bought one but have seen one and it was quite detailed. You could easily do the leg work and save yourself the money though.

There was one scheme which they had ( I didnt go for this as it was a hell of a lot of work) which involved a lot of pre-trip info, during trip report writing, and then submission of your report to UKTI - the funding was very generous but so was the amount of work you have to put in. I reckon they use this very accurate detailed info to form better OMIS reports for similar companies that approach them for OMIS in teh future. For this reason I thought it was best not to spend the time doing that particular grant as it would take up too much of my time and the info I wrote could be used to gen up my competition.

Feel free to ask more q's, but get in touch with UKTI - they are very keen to get the UK exporting.