First, determine exactly what’s happening in your target market. Then reach out to distributors and sales reps and consider hiring local salespeople. Once your volume is high enough, you might even want to buy a distributorship.
We often get the following question: I have a product that sells well domestically. I’m looking for companies that will represent my products in international markets. Do you have any suggestions or resources for finding trustworthy, effective overseas reps?
Decide which overseas markets you’ll be selling in first. Next, it is critical to thoroughly investigate what products similar to yours are currently selling in those markets, and what the playing field looks like.
Are there prominent distributors selling similar products who might take on your product line as a way to leverage their current offerings or might they take on your line to keep you out of the market?
Identify your potential customers in these new markets and figure out who they are already buying from. If there are resellers or distributors who have already carved out a comfortable niche with your customers, that’s where you want to position your products.
Interviewing potential customers will help you discover various attributes about your Rep/Distributor candidate(s): How often they visit their clients, what else they sell, how creative they are, and how well liked.
More than just finding out who is selling what to whom, ideally you want to know something about the health of the distribution relationships in the market and the performance of the individuals in those companies.
NAVIGATING THE CULTURE
Another possibility would be to hire an overseas tele-sales company to do initial customer qualifications for you and then hire a salesperson in the region who could follow up on sales leads, or designate a salesperson at home who would travel to the area periodically. A telemarketing campaign could give customers the appearance that you’ve got a local presence, and its operators could set up appointments for your sales staff, who would fly in and meet with several qualified leads over a short period of time. Eventually, as sales volume warranted, you could base a sales rep in the region permanently.
Having a local already on the ground working for you helps immensely, as he or she will understand market nuances that an foreigner will not. It’s not only language that becomes a problem, it’s the behavioral characteristics of the culture in terms of how you make a sale. Some companies think that if they’re selling in France, they can go into other French-speaking countries and sell. Things are very different in France than they are in, say, Belgium or Switzerland or Quebec. The same holds true for Asia and Latin America. You can’t easily carve the world up into dialects and language.
Because distributors are providing that infrastructure for you, expect their commissions to be high around 40%. A technique some firms use is to start selling in a new region via a small distributorship. Once sales volume are high enough, the firm can buy that agency so that it becomes their direct sales force in the region.
Establishing a strong network of domestic and international partners also can help your company expand sales internationally. Partners often act as advisers or even distributors in areas where they are already established but your firm is not. Eventually, you may be able to return the favour as part of a strategic alliance. What’s important is for you to be able to go back, after a year or two or three in a certain area, and show that you have customers in the region. However you can manage it, you want success stories and you want to be able to point to new revenue generated.
Let what you learned about the market through thorough investigation help you better determine your approach. You may find that a rep or distributor is not the best route to go at all. You may discover that joint venturing, licensing, setting up manufacturing, or even buying a competitor or channel partner a more viable approach.
Success is made up of 95% preparation and 5% execution.
Mark Mensing, CEO