Last month we supported the export sales manager from a construction machinery manufacturer. As part of our support, we organised – at very short notice – two meetings with the main buyers from two construction companies in Montevideo, Uruguay.
When doing market research it’s vital to talk to the end users of your products to find out what they really want. So that’s what we did. This level of market research gives you so much more to work with than even the most extensive use of Google. Of course, it requires local contacts (that’s our added value) and a lot of persistence and influence (yes, we can do that!). And guess what we found out… distributors are definitely not just the middle men. Here’s why…
Senior staff from both construction companies ranked local support as more important to them than price. Even for price-sensitive markets like Uruguay, they said:
“we would never buy from a manufacturer that does not have a local presence, even if they come up cheapest, because we’d be buying a liability, not a machine”
They went on to say that using distributors makes their lives easier with respect to customs and payments: “ … they simplify our life, and we are happy to pay a premium for that”. One of the companies’ purchasing manager also added:
“we need a local company that gives us support, training and also parts at short notice. We often visit potential representatives, we talk to their mechanics, we inspect their workshops”
It was clear from one of the visits that overseas manufacturers not always get to bid for tenders (particularly from private companies), because in Latin America it is often the case that only well-known local players are invited to bid.
Distributors aren’t for every business, but when they apply and when they work well, they’re worth all the investment to find them.