With over 700 million inhabitants who are relatively affluent Europe offers a huge potential to sell your goods or services. But Europe is not one market, it consists of 44 countries, ranging from huge territories like Germany to small islands like Malta. Where to start and how to enter the market?
Difference between West and East Europe
The biggest difference is between Western Europe and Eastern Europe. In Western Europe, e.g. Scandinavia, the UK, Germany, France, the GDP per capita is typically over 40,000 USD and if you want to introduce new products there, they should be either of good quality or dead cheap. In Eastern Europe this is different, since the GDP per capita is much lower. People like high quality, high design goods, but can not always afford it. So there is a market for simpler products.
With global trade data and some desk research you may already make a first country selection. But also check what competition you can expect. It may be easier to compete in a market with many smaller players than with one big incumbent. Unless you have very clear competitive advantage or there is a niche that only you can serve.
In the market verification check that we do for our customers our local partners in the country always look at the following:
- The suitability of your product or service in their markets. Is your offering useful and does it fit the local culture, habits or trends?
- Publicly available data on market size, to get a first impression.
- Possible distribution channels.
- Potential competition and their price range.
With the information that we gathered we can have a discussion with you on the best market entry strategy for your company, also given your experiences in other countries.
Enter the market with an agent or distributor
Doing direct sales in the diversity of European markets, with many different languages, would require huge investments. Therefore it is better to work with intermediaries, like agents or distributors, and only set up an office in one of the countries for marketing and logistics support. Unless for high-tech niche goods, you will need an agent or distributor per country, or even per region within a country.
So the first thing is to divide Europe into regions, for which you can find an agent or distributor. With that in mind, we advise you to first pick two or three regions to test the acceptance of your product and to improve the way you present your company and product. For these countries or regions you then start searching channel partners.
Alliance experts can find business partners for you within 3 months
Alliance experts helps companies with entering new markets profitably. In Europe we have offices in all major markets, and also in a number of Eastern-European countries. Everywhere we have local people, who know the market and have an extensive network. They can find your agent or distributor within 3 months.
We first want to know what kind of partner you are looking for. Based on your information, we make a long-list of 15-20 potential partners that fit your description. After your approval we find the right decision maker, approach him or her personally and share your business profile with them. This mostly leads to 3-5 companies who are suitable as your partner and interested in working with you. Once we have found these companies, we plan your meetings and accompany you during the first visits.
Convincing distributors to work with you
Even if you found possible distributors or agents, you will have to convince them to work with you. In order to have a compelling story, you need knowledge of their current portfolio and answers to the following questions:
- Where would your product be positioned in their portfolio? What new customers would it attract?
- What pricing do you suggest? And how much margin can they get? Also see our article on distributor margins.
- What current part of their offering competes most with your product? Should they abandon this? Make an estimate of how much margin that product brings them now.
- What comparable data do you have from other markets?
- How are you going to support them in introducing your products? Have you already marketing materials or channels (like social media) lined up for this?
If you don’t have all these answers, we can work with you to find them and to ensure that you can present yourself to potential distributors in and optimal way.
Let Alliance experts be your export management company!
Whether it comes to doing research, discussing strategy or supporting you abroad, you can see us as the temporary and part-time extension of your team. Hiring us gives the following benefits:
- We are short-term available and productive from day 1.
- No need to set up an office abroad and hire somebody full time.
- No search agency fees and training costs.
We mostly work on a fixed price basis, with a clear scope and deliverables, or with a monthly retainer if the activities are more diverse. We would be happy to have an extensive call with you, see where we could help and provide you with a detailed proposal. Just contact one of our team members, or use the button below and let us contact you!