Best Practices: Working with foreign distributors

Written by ProfitGuide Staff

For many companies, Moving into a foreign market can be an important, but intimidating move. That’s where foreign distributors come in. They know about the new market you’re targeting and can help your business get off the ground in it. But are they worth hiring? Three quarters of respondents to the latest Best Practices poll say foreign distributors are money well spent. We also asked respondents to share their advice on managing foreign distributors. Here is the best answer:

“Success starts with finding an interested and interesting distributor and often [it] is not the first one that shows interest,” says Som. “All too often distributors exchange a few e-mails or faxes and then demand exclusive rights for a country or a region that they can’t handle. They may use their connections to complete a few sales, but can’t push any further. As a result, companies have to spend a lot of time patching their distributor’s inadequacies, which is costly and hurts their brand/image.

“To get the most from your distributors here are a couple tactics:

  1. Communicate – Know what to expect from each other. Plan annually, set targets and follow up on results quarterly. Most importantly, be realistic.
  2. Know the market you’re moving into and be ahead of local and foreign competitors. Don’t rely fully on your distributor to send you market intelligence. Do your own homework. Make visits to the market, ask the right questions and direct your distributor. Use Canadian trade officers abroad or Team Canada reports to find more information on the country and sector. If you have limited resources, hire co-op students once a year from international business programs offered in many colleges to dig deeper for intelligence.”

For his answer, Som has won a copy of Help Wanted: The complete guide to Human resources for Canadian entrepreneurs by Margaret Butteriss.

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