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Many companies who want to enter a new market decide to use a local sales partner, agent or a distributor. The challenge is to find the most suitable representative for your business to maximize potential and avoid future headaches. In this article we guide you through our 5-step approach to find a great distributor in Poland.
The key is a structured approach during the distributor search to identify, evaluate and select your optimal partner. You might be familiar with the term systematic search and screening process. That’s what we use. First, shortlist potential distributors from a large pool. Then, evaluate them, rank them and exclude inadequate candidates. Going through the entire process will show your professionalism and will position you as a serious business partner.
Step 1: Define requirements on partner profiles
The first step is to develop a detailed partner profile with initial screening criteria to be able to identify candidates. Screening criteria may include: company structure, financial strength, product portfolio, customer base, sales force, capabilities among other things. The criteria form the basis for the distributor search.
When defining requirements for a preferred partner you should consider both your internal situation as well as external factors, such as market conditions. When considering prior experiences, we ask our clients questions like:
- What are examples of your best performing distributors and what makes them great?
- Have you experienced any failures when working with international distributors? Why?
- Do some of your distributors perform below expectations? What are the main reasons?
A good partner profile also takes the local market characteristics into account. If you don’t already have a good understanding of the local market, now is a good time to carry out a market analysis. The content and depth of the market analysis should meet your needs and the size of your investment. Example of areas worth to assess could be:
- Market size and growth
- Market trends
- Market structure
- Main potential customers
- Geographical concentration
- Competitive environment
- Distribution structures
- Events and trade fairs in your industry
Step 2: Identify potential distributors in Poland
Once you have defined your preferred partner profile you can start a distributor search. Specific search criteria applied to the right sources of information will help you identify potential distributors and generate a long-list of candidates. Only creativity limits the possible sources of information. Common sources include: company directories, web search results, trade press, industry associations, trade fairs, existing networks, and interviews with potential customers or industry experts.
Step 3: Evaluate potential distributors and select promising candidates
Apply layers of screening criteria to your long-list until you identify the most promising candidates. You should apply hierarchy to your screening process with “must have” criteria being the most important. “Nice to have” criteria and extra advantages close the hierarchy list. The screening process involves desk research, interviews and initial company contacts. You should be able to identify, evaluate and rank the promising distributors who have a mutual interest in cooperation.
Step 4: Meet candidates and initiate partnership discussions
Arrange meetings with the selected companies at their premises. This will give you a better understanding of what the company operations look like and will help you assess whether they meet the criteria. Try to meet three to seven most promising companies during your company visits. After the meetings and initial partnership discussions you should be able to make a solid, fact based selection of the preferred distributor with whom you would like to initiate cooperation.
Step 5: Negotiate and sign contract with selected distributor
Having done proper ground work and preparations, negotiations and signing the contract with your preferred distributor should be a piece of cake. Most of the topics have probably been covered in your discussions and dialogues at least to some extent. As so often however, the devil is in the details.
The more thorough and structured you are in preparing negotiations, the easier it will be to arrive at a mutual agreement with your future business partner. Make sure to introduce expectations as early as possible. It goes without saying that the contract has to be properly written and cover all aspects of the agreement. It pays off to invest in a good lawyer with knowledge of local law, regulations and business environment.
Make your distributor relationship a success
Congratulations on signing your distributor agreement and to a bright future! Now is when the real work begins. Your success depends on the success of your distributor and you should dedicate time and resources to make your distributor relationship a success. You should ensure that you onboard, train and support your distributor properly, and you should monitor and manage the progress on the market. Some of the areas to pay attention to are:
- Distributor onboarding
- Training
- Setting goals and expectations
- Support and follow up
- Nurture the relationship
