You’ve identified Latin America as a priority area for expansion. Your strategy indicates that you will target this region by appointing distributors in various markets. But how exactly do you find them? And how do you approach them?
Distributor recruitment is one of our most popular services. We do this every day, mainly for UK manufacturers. Many of them have tried other ways and failed: trade show contacts that never replied to emails, regional/sales managers that need to support other countries and can’t afford the time to identify and appoint distributors in this region, distributors inherited that are not performing.
Trade Show websites often list participants, including your potential distributors and competitors
Nowadays, there are lots of tools out there to identify distributors, from directories to international trade data, from adverts in magazines and sector portals to LinkedIn. Word of mouth can also be excellent. What we find important is to use as many reliable sources as possible because you then start working out some interesting patterns… We find that this stage doesn’t usually take that long but does require skill and experience, particularly in some sectors or countries where online presence is very limited. We find that asking around does help (social media can pay off here), and that will depend on how strong your regional networks are.
Manufacturers of complementary products will list distributors on their website that could be good partners for you, too
So then you come up with a shortlist, you rank potential distributors (we do this with our clients) and then the fun begins. This is basically selling: you need to sell your business to this potential new partner, your proposition has to be interesting enough to compete with the dozens of other companies that contact them every single week. You get one shot, so it’d better be an offer they can’t refuse. Remember that, more likely than not, they won’t know you or your brand. Why would they want to work with you?
Remember that you’re not the only one wanting to enter the market, you’ll have to compete with these and other guys for a potential distributor’s attention (pic: German company at food tech trade show in Argentina 2016)
The tricky thing here is getting to the decision maker, and that’s even harder if you don’t speak the language. We do, and with my team we’ve worked out that on average it takes us about ten calls to a distributor to get to the right person. Multiply that by, say, 15 potential distributors, and you have 150 calls straightaway. If you’re targeting three countries, that’s 450 calls just to get you going (no wonder why our clients really value this service!).
What’s very important in Latin America is to understand that structures can be very rigid and very hierarchical, particularly in some countries. I personally advice a very formal approach to start with, even if then you progress into something “friendlier”. Titles are important, and use surnames, not first names.
Probably 2-3 months after you started, you’ll hit gold. The decision-maker is interested enough and wants to speak to you. That’s probably, say, about 5 out of the original 15 distributors, because some will just not reply and some will not be interested (how dare they?). When we recruit distributors for our clients, at this stage we usually interview all decision-makers and act as a filter so that our client receives some information on them before going any further but also to rule out those that just don’t fit the bill (that might have looked good on paper but for one reason or another they just aren’t right). I recommend not to skip this stage. It might be your one chance to get to know them if you are not meeting them in person (we do recommend you travel and meet them either before appointing them or in the first few months). If you are meeting them in person, this instance will give you a lot of information on what to expect when you finally meet, and will give you some ideas of what to ask that distributor and other distributors. It will also act as a great ice-breaker for when you meet face-to-face.
With a client’s distributor in Peru. Mission accomplished. The MD said he only gave us a chance because of our “beyond believable” persistance, he confessed he get no less than TWENTY requests per month from all over the world from companies that want to be represented in Peru! Are you ready to stand out?
When you’ve decided who your distributor of choice is and have met them in person or through Skype, then it’s up to you how to build the relationship but by then you’ll be in more comfortable grounds because you’ll have done it before and Latin America is no different to other regions in this respect (negotiating exclusivity, MOU, contracts if needed, MOQs, point of contact, NDAs, etc). At all stages, remember that their English might not be fluent. That’s partly why we support our clients until the manufacturer-distributor relationship gets going and let go gradually, unless we’re then requested to manage Latin American distributors, but that’s another story, for another post!
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