When selling products in another country, businesses often think about giving exclusive distribution rights to one partner. This means only one distributor can sell their products in that area. This can be good because the distributor may work harder to sell the product, and it can build stronger relationships. However, it also has risks. If the distributor does not do a good job, sales can suffer because no one else can sell the product.
Choosing the right distributor is very important. Companies need to find distributors who know the market well, have good financial health, and share the same goals. This is where a local export consultant can help a lot. A local advisor understands the country’s market, culture, laws, and business practices. They can help find trustworthy and effective distributors.
Investments are a big part of developing a market. The brand owner might need to invest in marketing, training, and product support. On the other hand, the distributor may need to invest in setting up a sales team, marketing efforts, and sometimes even storage facilities. High investment from the distributor can justify giving them exclusive rights, but only if there are sufficient sales to make it worth their while. The distributor needs to know that their efforts and money will lead to good profits.
A lawyer can help create a strong contract that includes these investment details. This contract should cover important points like how the distributor’s performance will be measured, what happens if the distributor does not perform well, and how to protect the company’s brand and products. The advisor ensures that the contract is fair and follows local laws, reducing the risk of problems.
But the first thing is of course to set out your Market entry strategy and to start searching for these distributors in a new country who have the best network among the retailers of businesses that you want to have as your clients.
Alliance experts, a Dutch BV founded by Alfred Griffioen in 2008, is specialised in distributor search and international business development for companies that want to increase their exports. The company also supports in overseas procurement and sourcing.
