The relationship with an overseas distributor can be a difficult one to negotiate. Although the distance between the business and the distribution of its products may be great, the communication between the business and distributor absolutely must be clear. Distributors are, after all, the people you’ve given trust to for your business growth. For this reason, distributors must be screened and re-screened before any contracts are signed.
It’s important to have a lengthy, standardised set of questions to ask new distributors. This list should include, as a very basic foundation:
Why are you interested in my company?
The personal interest angle can help you get to know the distributor and how they work. The reasons behind their interest in your product is also important.
What success stories do you have?
A good distributor should have a history of success with imports. You are, after all, looking to achieve some business growth with your decision.
What has your relationship been like with other companies you have represented?
Trade references are essential for this type of business agreement. At least three references should be provided, and these should be checked carefully.
Are there any restrictions that will be placed on my product?
While you should research the legal requirements of exporting your products for yourself, it’s a good idea to test a new distributor’s knowledge. Anyone who tries to minimise the difficulties should be avoided.
Will the market in your country be open to my product?
It’s no use exporting with a distributor who doesn’t know the market well. This question can be a good starting point for this discussion.
How will you build your profits into the pricing structure?
The finances of a distributor should be carefully examined, and it’s always worthwhile getting background checks done. This question can give you insight into how the distributor intends to market the product.
How will defective and unsold products be handled?
It’s always a good idea to map out what will happen if something goes wrong.