02 Jan Why Work with Distributors to Expand Markets
Expanding markets is no easy decision. Your products will be available to a whole new set of potential consumers, your brand will be in front of a completely new culture, and there’s no guarantee that what works in one market will work in the next. However, when it comes to opportunities for a new revenue source, it doesn’t get as straightforward as this.
Fortunately for many companies that do not have the infrastructure or the budgets to build a robust operation in every country where there could be market participation, there are in-market distributors who allow companies the opportunity to easily expand into those markets by utilizing all the resources these distributors already have available to them.
in-market distributors who allow companies the opportunity to easily expand into those markets
Distributors are basically companies who specialize in being your brand in their country. You may be wondering how or why they do that, and why it would be interesting or even relevant for you to consider the possibility of working with a distributor in a new country.
Before we address your questions, let’s first consider what it takes to distribute a new product into an international market. We like to think about it in 3 different processes:
- Supply Chain: Everything related to getting your product from your warehouse in (insert city), (insert state) all the way to (insert country where the product will enter). This includes transportation, customs clearance, product sanitary registration, etc.
- Brand Building: For consumers to be introduced to the brand and products, there is a strong brand building and marketing component that needs to be implemented towards the right audiences. It’s about understanding why a consumer should/would purchase your product, pushing that sale, and lastly delighting the consumer to generate a re-purchase or recommendation.
- Product Visibility: Relationship building with buyers and retail locations to carry your products and ensure sell-out. Which, as you already know from placing your product at retail locations here at home, it’s not easy to build relationships with buyers and category managers, to not only place your product at the point of sale but place it at an optimal location.
As a company, building the capabilities to run your distribution business in a new country or market, can be very costly, extremely inefficient and time-consuming. Thankfully for companies looking to expand, there are distributors that are specialized in running the distribution for several brands. They are usually experts in a specific category, have the infrastructure set in place to import and transport any product, they understand how to build a brand in their market, and have the network already built to be able to position your product in the best shelves of all retail locations.
When finding a distributor, it’s very important to keep in mind that the end-goal will be to build a long-term relationship where there is a Win-Win situation. You’ll earn the revenue of someone purchasing large quantities of product, as well as your brand being positioned in new markets, and the distributor will have an amazing new brand to “own”, and will be able to upsell to retailers and end consumers.
Working with a distributor is a great way to expand into a new market, create a new revenue source for your business
Working with a distributor is a great way to expand into a new market, create a new revenue source for your business, and build brand in a new market and within a new audience, without investing too much time, energy, resources, and money.