Finding Global Sales Partner Requires A Strategic Alliance
Although it's almost unheard of for their U.S. counterparts, international distributors develop and carry out their own marketing and promotional programs. Because the distributors are so important, U.S. firms that establish a relationship with them must view it as more than simply signing on a distributor; it's a strategic alliance.
As many foreign firms become more aggressive in the U.S. market, American companies are trying to determine how they can increase their activity outside the U.S. International distribution often appears to be an easy way to increase sales, but more is involved than simply signing up a distributor in each target country.
U.S. firms often lack a strong profile of the ideal distributor, even for domestic markets. Overseas, the selection process becomes even more difficult. The biggest distributor in a given market isn't necessarily the best organization to represent their products.
In making the choice, it is important to understand how distributors operate in different parts of the world. In Europe, distribution varies dramatically from country to country, region to region, and often from city to city. The same is true in the Pacific Basin, South America, and the Middle East.
In most of these international markets, distributors not only play a key role in the sale and distribution of goods, they are also a strong marketing factor. They stock inventory. They have extensive lists of important contacts and in-depth knowledge of their markets. At the same time, they have extensive technical, training, and support expertise.
U.S. manufacturers often fail in overseas markets because they don't fully come to grips with this important distinction, its requirements, and its ramifications. Instead, they rush to sign up distributors, fire them, and then sign up new distributors, much as they would in their own backyard. This trial-and-error process delays sales success and may even cause marketing and financial disasters.
On the other hand, firms that carry out a careful selection process, conduct positive support and training programs, and continually monitor their foreign distributors are likely to increase sales and profits.
There are several other reasons for choosing international distributors with care.
Because of the distances involved in these strategic alliances, and because of the
language and customs barriers, U.S. manufacturers, by necessity, relinquish a part of their marketing and sales authority to the overseas distributor. Thus, it is important to ensure that their respective management styles can exist and thrive together.
It is also advisable to document a potential distributor's market connections. As aggressive as the global market is today, a company simply can't afford the luxury of taking on a distributor that doesn't understand its target markets or doesn't have strong relationships in those markets.
Finally, because of the distance between a U.S. company's headquarters and an overseas distributor's territory, it is important to ensure that the distributor's sales force has solid technical expertise, as well as the ability to service customers.
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