Your best customer could be overseas, but how do you reach them? Foreign distributors can help expand your business globally and get a foothold in local markets. If you’re ready to grow beyond U.S. borders, here’s how to get started with an international distributor.
What do foreign distributors do?
International distributors are the middle link between the producer and local retailers or customers abroad. Typically, these distributors purchase a product from the manufacturer or exporter, handle the shipping and customs clearance, and then resell the product in their local market. Unlike an agent, who represents the company abroad, foreign distributors take full ownership of the goods from marketing to inventory to sales support.
Foreign distributors usually buy in bulk. These larger transactions are often beneficial for your cash flow and supply chain. Distributors also take on the risks associated with reselling in a new market. However, in return, a distributor may expect a discount. You also won’t have control over pricing, marketing, and building loyalty with the final customer.
Online resources and offline events can help you find the right international distributor for your business. Trade shows and trade associations offer in-person networking opportunities.
How to vet foreign distributors
Take time to find the right foreign distributor to represent your company abroad. The reputation of your brand depends on the distributor. It’s critical to ensure your product is in the right hands.
Start by researching which distributors operate in your desired market. Distributors may have exclusive or nonexclusive rights to sell in a specific area. Exclusive rights mean the distributor is the only company allowed to sell your products in a specific country, region, or market. This arrangement is ideal when you want the distributor to invest heavily in marketing, promotion, and brand-building, because they know they won’t face competition from another official distributor of your brand.
Opt for nonexclusive rights when dealing with a product that’s easier to sell or when you want wide coverage (for example, different distributors who specialize in different sales channels, such as online, retail, or industrial).
Then ask a potential partner about their business expertise and resources. Find out who their main customer groups are, where their distribution network is located, and what sales channels they plan to use. Learn about their sales and marketing plan, including how much support and what specifically they will need from your team.
“It’s in your interest to make sure that your distributor’s team has access to the support they need to make a success of your product. Try to get a good idea of how much time and input they will need from your staff, and make sure it’s something you can commit to,” wrote FedEx.
Top channels and marketplaces to find qualified international distributors
Online resources and offline events can help you find the right international distributor for your business. Trade shows and trade associations offer in-person networking opportunities. But you’ll be able to research many more options by using online marketplaces and government resources.
The following sites can help you filter and find potential international distributors to contact:
- Alibaba.com, a massive database that can be particularly good for reaching customers in Asia.
- Global Sources is also a place to find Asia-based distributors, as well as upcoming trade shows.
- Amazon’s global selling program lets you list and sell your products internationally.
- eBay serves customers across borders in 190 markets.
- IndiaMART is a B2B marketplace for customers in India.
- Mercado Libre is the largest online marketplace in Latin America.
The federal government also offers resources, including:
- The U.S. Commercial Service offers a Gold Key Service to identify, vet, and arrange meetings with potential international distributors.
- The U.S. Small Business Administration’s Office of Manufacturing and Trade can help arrange export loans, research international markets, and clarify international trade regulations. U.S. Export Assistance Centers in many cities host events connecting American small business owners with foreign buyers.
The best way to find a foreign distributor is to talk to other business owners. Look for reviews or ask other companies for advice on working with an international partner.
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