Distributor appointment is not enough
The common belief about international expansion is that it primarily involves appointing country distributors. Brand owners scout around the internet, trade shows, local contacts in countries, counterparts in non-competing organizations, consulates, and other possible sources in search of a distributor (While there is a better way to identify and select the right distributor(s), but that is not the point this note is making).
While appointing a country distributor is undoubtedly an important step, this alone is not enough to deliver sustainable revenue growth. This is not a reflection on the quality of distributors. The work of a distributor needs to be supplemented by effective and adequate inputs from brand owners. The inputs required are cross-functional in nature, primarily focused on marketing, customer engagement, joint business planning, trade marketing, and distributor team training. These inputs can be provided either by the brand owners’ own team, or an outsourced team appointed by them.
Undoubtedly, there are exceptional distributors who are well resourced and truly full-service. In markets like Puerto Rico, UAE, Panama, and some others, the distributors are well resourced and truly full-service. However even for such distributors, local presence of a company appointed team, supported and guided by a team at the center makes a significant difference to the business. These teams can be the company’s own employees or an outsourced team of experts.
It also needs to be recognized that big distributors, who have the resources to build brands, are typically not fond of small brands. Even if they do take up the distribution of a small brand, it needs to constantly fight for their attention. On the other hand, small/mid-sized distributors generally do not have the capability of building brands.
In our experience, simply appointing a distributor in a country and expecting the business to grow to potential, is often met with disappointing results. It’s a huge missed opportunity. And if this happens to an organization in multiple countries it is a huge missed opportunity for the international business of the company.
The good news is that it does not have to be so. There are viable ways to nurture brands and distributors to ensure international business clocks a healthy growth rate. Learn more about Omicus’s unique model for sustainable international expansion through brand-building and effective execution.