Finding the right partners in a new market is a major challenge many companies experience, whether a start-up or a seasoned business. Despite the challenge, building relationships with partners and distributors, especially in new international markets, is one of the best ways to grow your business and ensure market entry success.
Why do you need partners or distributors?
Partnering with a business that already has a customer base in your target market allows you to gain immediate access to these customers without spending the time, effort or marketing budget to do it on your own.
As a bonus:
Your new partner or distributor will act as an advocate for your product that has already gained a level of trust with the potential buyers of your product.
Think of it this way, when you go into your favorite department store to purchase something, you may not have heard of the brand of product you end up taking home, but you buy it because you have an established level of trust in the department store’s brand. In this case the store, being the distributor for that product, was the reason that the product ended up in your shopping cart.
The more partners or distributors you have, the more likely it is you will be able to increase sales through exposure alone. Makes sense, right? So how do you find the right partners?
Here’s where to start
There are many ways to get set up a partnership or distributorship. A few of these methods are mentioned below, but before you start contacting companies have a target list and a plan.
Who do you want as a Partner or Distributor? Make a list of who you would like to work with.
Search online, but go beyond just using a search engine, explore trade directories and membership directories.
These will be more tuned to the specific geographic region that interests you. Making a targeted list of desirable potential partners and distributors is far more valuable than just a generic list from a Google search. In this way, you will be able to get not only the company name, but contact information, and possibly know which of your competitors are already working with a given prospective partner. Find companies that will complement what you are offering.
What’s your plan?
You should have a plan of attack. How are you going to contact them? What are you going to communicate to them? Be very conscious of your message – what you think you are saying is often not what is being communicated. Don’t expect much of a response if you spam them with messages like:
“Hi, I am contacting you to make an agreement for you to sell my product”
“Hello [prospect name], my name is [your name] from [your company name], I found your information on [name of trade directory or member directory] and the reason I am contacting you is I want to set a time where we can discuss how we can work together to increase sales through a mutually beneficial co-op relationship. I have some ideas that will help grow both of our businesses.”
This would be much better received.
To make it even better, once you send out your initial message, follow up with a telephone call within 48 hours – just long enough not to seem like you are chasing them, but they will still remember your message.
Crafting your offer
You have to make your offer enticing. One of the most effective ways to do this is to offer terms on the sale of your product.
Asking them to pay for your product up front and then try to sell it can be a tough conversation.
If the conversation went more like:
“I would like to offer you 1000 units of our product, which sells for $1000 in most stores, at a reduced cost of $500. Plus, you will not need to pay for the goods for 60 days after you receive them. Would that give you the time to sell the products before you pay the invoice to us?”
Most companies would like that concept.
But Wait! I cannot wait that long to get paid!
Yes, you can.
There are many commercial finance products that are available today that will allow you to sell your goods on credit terms to these good business customers, and then get up to 80% of your invoice value advanced to you within 24 hours of confirmed and accepted delivery of your product. This way, you are not waiting at all to get paid. Pretty Sweet, right?
Not all banks or commercial finance companies offer this type of trade finance as it is fairly specialized, but it is out there. A quick search of “export finance companies” will give you a list of companies that specialize in the type of funding you would be looking for.
It is critical to remember that when you are looking for companies to partner with or to be distributors for your product they will be an extension of you, and you will be an extension of them.
Any good or bad that comes out of the relationship will be shared, so hedge your reputation risk by only working with companies that you can be reasonably assured will enhance your reputation, not be a liability to your brand.
Want to learn more about finding partners and distributors? Check out this video by Wade’s company IMM Financial