If you are trying to sell one product into a particular marketplace, the costs of representation are usually too high. A distributor that focuses of this area is the better way to go, as they can spread the representation costs over the rest of their product range.If you are trying to sell to 'Retailers', you will find that they are not keen to deal with one product companies.
A distributor will usually want a margin of more than 30%.Careful research to establish the right distributor, with an appropriate distribution deal, is essential.It is quite normal for an interested distributor to start off wanting the 'rights to everywhere'.
A most important concept to grasp is that of the 'Territory'.In Australia they will be asking for 7 states and the counterpart in the US will start asking for every state in the union. Despite the fact that they may have only effective distribution in one state. The selection of distributors will be one of most important decisions you will ever make. We give advice on the many and varied issues connected with it. Try and get it right at the beginning.
This is a critical issue.- Have you checked out the performance of these people in the marketplace with other products ?- Do they really reach the market territory as they claim ?- Do they pay their bills ?- Have you talked to their 'customers' ?
We have had quite a bit to do with distribution agreements, especially clients that rushed off to their local lawyer who does one every leap year. You need to be dealing with someone who does this all the time and has a depth of experience.We give help here to clients in settingup the main issues to address, and will layout a draft, if required. Howeverit is made extremely clear that you will have to take it to your lawyer of choice to review and refine, we take no responsibility.The correct way to treat this document as a 'rules of the game' manual rather than a pile of gobbledygook that you 'park' on a shelf until a court case starts. A document that clearly defines, in simple language, 'who does what'. What happens when something goes wrong ? For example .... - If you put the price up how much notice do you have to give ? - If the goods are of poor quality - how soon should the distributor notify you 30 days ? one year ? - What is the performance criteria ? These agreements can get pretty messy, most people need guidance. If you are an inventor or developer we can help you with your project.
Your success will be tied to the right selection of a distributor and a suitable agreement that covers the situations that crop up in the course of business. Not a lot of distributors perform well. We get to hear all the problems - ask us for help.
A website can be a good way of attracting distributors, especially in other countries. You can create a profile that belies your small size. Detail on websites here.