Questions to Ask Distributors Before Working Together
How to find the right overseas distributor for your business
Overseas distributors are foreign companies or people to whom you sell your products. The assumption is then that your distributor will sell those products to their own local customers.
Finding overseas distributors who are not only legitimate businesses involves extensive research as well as carefully developed business relationships. Once you have found and pre-qualified several options, you need to narrow down your selection to find the distributor who is the best fir for your products, customers, and business.
50+ Questions to Ask Distributors Before Going Into Business Together
The questions you need to ask potential distributors fall into five categories: background, experience, process, logistics, and values.
Background. Questions about the distributor's business structure will help you understand their model and whether they have the infrastructure necessary to connect your products to the right customers.
- What is your company about?
- How long have you been in business?
- How will our line fit your existing portfolio of products?
- Do you have strong relationships with customers who will buy our products?
- Can you identify the types of customers who will buy our product line?
- Do you track trends in our industry to stay ahead and relevant?
- Will you be willing to furnish profit/loss statements for the past three years?
- Where do you see your brand in 3, 5 or 10 years?
- How will our brand/products fit into that vision?
Experience. If you haven't worked with an overseas distributor before, you may find it easier to choose an experienced partner who can demonstrate success in your niche.
- Why do you think you are the right candidate to get the job done?
- Can you share a few success stories about similar, non-competing products you have sold?
- Have you represented other foreign companies? Explain what you did.
- How long has your relationship lasted with the top three companies you represent?
- Will you be willing to provide references from companies you work with?
Process. It's important to define expectations on both sides so that you can work together smoothly, develop a long-term partnership, and deal with any problems or questions that arise.
- What’s your plan for building our brand in your country?
- Do you have good market coverage, including a trained and educated sales force?
- What specific territory are you interested in covering?
- Can you effectively manage key accounts?
- How often will you call on accounts?
- Will you demo or sample products based on customer requests?
- Will you provide regular activity reports?
- Can you deliver on pre-agreed sales targets?
- Can you create and execute an agreed strategy?
- How will you promote our products in your market?
- How will you measure the effectiveness of your promotional efforts?
- What marketing support do you expect from us?
- How often do you expect us to visit your premises?
- What would success in distributing our product line look like in your country?
Logistics. From customs fees and legal documentation to shipping and storing products, working with a foreign partner involves many logistical details. Both partners need a clear picture of these requirements.
- Have you previously imported products from our country?
- What are your local customs and import duties on our products?
- Are you aware of any restrictions on our product line?
- What documents will you need to import our products freely?
- How much lead time do you need before you can import our product line?
- Are you aware of any documents that will require authorization in advance from your consulate, government or embassy?
- Are there any special local regulations or restrictions (e.g., carton markings, product labeling, special language requirements, cultural factors, numbering issues, etc.) that we need to know about in advance to fully comply?
- Are you knowledgeable about product registration requirements?
- Will our products run effectively utilizing your country’s electrical current system or will it need to be adapted?
- How will the temperature affect our products during importation, warehousing, distribution, and the normal retail sales cycle?
- What is your billing/invoicing/payment process like?
- What are your payment terms (sight draft, letter of credit, wire transfer) and timeframe?
- Who will pay for media activities?
- Will you be our ongoing point of contact? If not, who will be?
- How will we communicate and how often?
- Do you have warehousing capabilities?
- Will you drop-ship from your warehouse direct to customers?
- How will you earn your profits (markup, commission, or other)?
- How will defective, expired, or discontinued products be handled?
- How will you manage inventory?
Values. You want to ensure that not only will your distributor be able to move your products, but they will also do so in a way that fits your business's values, ethos, and public brand.
- What interests you about our company/products?
- Why do you want to work together?
- What is your relationship with your customers and the community?
- What is your relationship with your workers?
- Describe your companies ethical priorities. How do you see those fitting with our values/expectations of the marketplace?
A good distributor is not just a means for getting your product into the hands of customers. The best business relationships will allow both you and your partners to grow and expand, increasing your market share, customer loyalty, and profits.