Global exports without investing: just find distributors who take all risks

Can you enter a new market with your consumer product without any further budget? This really depends on your offering. Not every product sells itself.

Functional aspects versus design versus branding

The more unique your product is, the easier you will get it on the shelves. Proven functional effectiveness is the best. If you have a new blender that automatically separates the seeds from the rest of the fruits, then that’s a clear advantage. Design is a bit more subjective, but outstanding modern design can be a real USP. Branding is the most difficult one. If you have a common product like cosmetics, food supplements, fruit juice, wine or packaged food then it will be hard to stand out from the rest, even if the product keeps you younger, healthier or more satisfied than any of its competitors. You first have to get your brand message across!

A high-end positioning costs money

The only reason why BMW, Louis Vuitton, Gucci and Clarins are seen as high quality and highly desirable, is their ongoing investments in commercials, advertisements, shop layout and event sponsoring. That is how they link their brand to associations like rich, successful or high quality. If you look at brand value with the Brand Asset Valuator Model of Young & Rubicam, you will see that differentiation and knowledge are important aspects.

Positioning your brand in a way that the brand is differentiating is quite hard. Testing out your brand positioning in your own market first is the best you can do. That’s the market you understand and where you don’t have to overcome language barriers. If you are not reasonably successful in your home market, then forget foreign markets for now.

Knowledge is the second aspect. Regardless of whether you will invest in it or you expect your distributor to pay, people won’t learn about your product without advertising, sampling and in-store promotions. The bigger the country, the higher the investments.

Why would a distributor choose you?

Distributors like easy money, just as anybody else. Distributors have invested in their relationship with the client and want to capitalise on that. Products on the shelf are not for display, sales per meter of shelf is what counts. So if they can put a known brand on the shelves in stead of your ‘starters’ brand, they will likely do choose the known brand.

The only way you can convince a distributor in working with you is by showing that your product brings him more profit than others. If he sees you as ‘just another brand’ then you’re lost. A typical purchasing manager of a distributor is not interested in the benefits of your product. You have to show that it already sells elsewhere, that your positioning is ok and that he hardly has to do anything.

A checklist before going any further

  • Have you done your market research? Who are the competitors?
  • What pricing do you suggest?
  • Have you already translated your website in the local language?
  • What promotions do you suggest?
  • Who is going to pay for advertising?
  • Do you have designs for the advertisements in the local language?

Finding a distributor is a profession and takes time

Finding a distributor is actually selling your product in big quantities. Only not to the end user, but to an intermediate. This requires different argumentation.

Purchasing managers of major distribution chains hide themselves. You can’t find their phone numbers on the internet. They instruct their secretaries to scare you off and or ask you to send your offering by email and never respond. Eventually they will negotiate with you to make you lower your price or increase your investments in marketing.

Alliance experts is specialised in finding the right distributors in the many countries we work in. We can bring you into contact with the right purchasing managers, but we can’t influence the outcome. That depends on how attractive your offering is and how far you want to go. That’s why we do this work in consultancy assignments and not on a commission basis.

What we can do is to increase your chances for success. For example by doing focused market research for you and by advising you on your positioning. And to select the distributors that seem to be a good match with you. Please contact one of our team members.

This entry in exports was updated on June 2, 2020 by specialist.