An overview of how to work with distributors and a checklist of items to be aware of.
Last Published: 5/22/2017
Distributors purchase larger quantities than individual consumers, so selling in bulk is usually more efficient and profitable. Distributors in other countries may come across your website or products (in eCommerce marketplaces, for example) via keyword searches or social media. You can find distributors through your own purposeful efforts: research which countries demonstrate potential demand for your products, and then target those countries.

If selling through distributors is in your export plan or happens out of the blue, keep these basic considerations in mind and ask the following questions (your company can tailor this checklist to its own needs; key factors will vary significantly depending on the products distributed and countries involved):

Size of Sales Force

  • How many field salespeople does the representative or distributor have?
  • What are the distributor’s short- and long- range expansion plans, if any?                                          
  • Would the representative company need to expand in order to accommodate your account properly? Would it be willing  to?

Sales Record

  • Has the representative company had consistent sales growth? If not, why not? Try to determine the company’s sales volume for the past five  years.
  • What is the average sales volume per outside  salesperson?
  • What are the distributor’s sales objectives for next year? How were those objectives determined?

Territorial Analysis

  • What sales territory does the representative company now cover?
  • Is the sales territory consistent with the coverage you desire? If not, is the representative or distributor able and willing to expand the territory?
  • Does the representative company have any branch offices in the territory to be covered? If so, are they located where your sales prospects are greatest?
  • Does it have any plans to open additional offices?

Product Mix

  • How many product lines does the representative company handle?
  • Are these product lines compatible with yours?
  • Is there any conflict of  interest?
  • Does the distributor represent any other U.S. companies? If so, which ones (names and addresses)?
  • Would the representative company be willing to alter its present product mix to accommodate yours?
  • What is the minimum sales volume that the representative or distributor needs to justify handling your lines? Do its sales projections reflect that minimum figure? From what you know of the territory and the prospective representative or distributor, is the projection realistic?

Facilities and Equipment

  • Does the representative company have adequate warehouse  facilities?
  • What is the method of stock  control?
  • Does the distributor use computers? Are they compatible with  yours?
  • What communications capabilities does the distributor have (fax, modem,  e-mail)?
  • If your product requires servicing, is the representative company equipped  and qualified to perform that service? If not, is it willing to acquire the needed equipment and arrange for training? To what extent will you have to share the training cost? Are there alternative ways in the market to service the   product?
  • If necessary and customary, is the representative or distributor willing to inventory repair parts and replacement items?

Marketing Policies

  • How is the sales staff compensated?
  • Does the representative company have special incentive or motivation programs?
  • Does it use product managers to coordinate sales efforts for specific product lines?
  • How does it monitor sales performance?
  • How does the representative or distributor train its sales staff?
  • Would it pay or share expenses for  its sales personnel to attend factory- sponsored seminars?

Customer Profile

  • What kinds of customers is the distributor currently in contact with?
  • Are the distributor’s interests compatible with your product line?
  • What are the distributor’s key accounts?
  • What percentage of the total gross receipts do those key accounts  represent?

Principals Represented

  • How many principals is the representative or distributor currently representing?
  • Would you be the distributor’s primary  supplier?
  • If not, what percentage of the total business would you represent? How does that percentage compare with other suppliers’?

 Promotional Thrust

  • Can the representative company help you compile market research information to be used when making forecasts?
  • What media does it use, if any, to promote sales?
  • How much of the company’s budget is allocated to advertising? How  are those funds distributed among various principals?
  • Will you be expected to contribute funds for promotional purposes?
  • How will the amount be determined?
  • If the representative or distributor uses direct mail, how many prospects are on the mailing list?
  • What type of brochure does the distributor use to describe the companies and products that it represents?
  • If necessary, can the company translate your advertising copy?
  • Does the representative have a website to promote the product?
  • Can it provide product demonstrations and training, if needed?

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