How to Find a Great Distributor? A 5-Step Guide

When expanding into a new market, many companies opt to utilize the services of a local sales partner, agent, or distributor. The task at hand is to locate the most suitable representative for your company to capitalize on potential opportunities and prevent any difficulties down the road.

A well-organized strategy is crucial when searching for a distributor to find the best partner for your needs. You may have heard of a methodical search and screening process, which is what we follow. Initially, we narrow down a large number of potential distributors to a shortlist. We then assess and prioritize them, while eliminating unsuitable candidates.

Throughout the years, our team has refined a successful five-step process for locating.

First Step: Establishing partner profile requirements

To begin, the initial step is to create an in-depth profile of preferred partners, using search and screening criteria to effectively pinpoint suitable candidates. These criteria may encompass elements such as company organization, financial stability, range of products, customer demographics, sales team, and overall capabilities. Ultimately, these criteria serve as the foundation for conducting a thorough search for distributors.

A partner profile needs to consider the unique characteristics of the local market. If you lack a thorough understanding of the market, it is advisable to conduct a market analysis at this point. The market analysis should be tailored to your specific needs and the extent of your investment. Some potential areas to evaluate may include:

• Size and expansion of the market
• Current trends in the market
• Structure of the market
• Primary target customers
• Regional distribution
• Competitive landscape
• Distribution methods
• Industry events and trade shows

Step 2: Identify potential distributors

When you have established the partner profile that suits your preferences, you may begin your search for a distributor. By utilizing specific search criteria, you can effectively gather information and pinpoint potential distributors, creating a list of potential candidates. The options for information sources are vast and only limited by your creativity. Some common sources include company directories, internet search results, publications in online/offline trade press, industry associations, trade shows, existing connections, and conducting interviews with potential customers or experts in the field.

Step 3: Assess potential distributors and choose promising candidates

To find the best candidates, it is important to apply multiple layers of screening criteria to your initial list. Prioritize your screening process by placing the "must have" criteria at the top of the hierarchy. The "nice to have" criteria and additional advantages should follow in descending order. The screening process includes desk research, interviews, and reaching out to potential companies. Through this process, you will be able to identify, assess, and rank the most promising distributors who share a common interest in collaboration.

Step 4: Schedule meetings with potential candidates and begin discussions about forming a partnership

Schedule meetings with the chosen companies at their respective locations to gain a deeper insight into their operations and determine if they fulfill the required standards. Aim to meet with three to seven highly potential companies during your visits. Following the meetings and initial negotiations, you will be able to confidently select the preferred distributor based on factual information to begin a partnership.

Step 5: Finalize agreement with the chosen distributor by negotiating and signing the contract.

After completing thorough groundwork and preparations, the process of negotiating and finalizing a contract with your desired distributor should be relatively simple. Likely, many of the necessary topics have already been addressed to some degree during your discussions. However, as is often the case, the crucial details can make all the difference.

To successfully reach a mutual agreement with your potential business partner, it is essential to thoroughly prepare for negotiations. It is crucial to communicate expectations at the earliest opportunity. Of course, the contract must be drafted accurately and comprehensively to cover all elements of the agreement. Investing in a competent lawyer who possesses knowledge of the local laws, regulations, and business landscape will prove to be beneficial.

Tips for a Successful Distributor Relationship

Congrats on officially signing your distributor agreement and cheers to a promising future ahead! The journey of hard work and dedication starts now. The prosperity of your distributor determines your success, thus it is crucial to invest time and resources into nurturing a strong distributor relationship. This includes proper onboarding, training, and continuous support. It is also important to closely monitor and oversee the progress of your market activities. Keep an eye on key areas such as:

• Onboarding for distributors
• Providing training
• Establishing goals and expectations
• Offering support and follow-up
• Cultivating the partnership

Sounds complicated and time-consuming? Do you need assistance?

Embarking on a new market venture can be a thrilling yet complex journey. At Explore Markets , we understand the challenges that come with finding the right distributors to ensure your products reach the right audience. If you're seeking guidance, don't hesitate to reach out to Fredrik Udd , Explore Markets managing partner.