What are the advantages of a business model involving a distribution partner abroad?
Cooperating with a distribution partner makes it easier for Swiss exporters to enter a new market. Marketing, distribution and import are handled by the local partner, keeping fixed costs manageable. In addition, the Swiss exporter does not have to deal with regulatory problems, as these are usually handled by the distribution partner.
1. Analyze the market
It is only possible to know what to look out for when finding a distribution partner if you understand how the market works in your target country and how it differs from the Swiss market. However, market analysis can quickly become very time-consuming. Sometimes, there are simple ways to get an initial sense of the situation: searching online, attending a trade fair or conference and talking to experts, or analyzing import statistics for certain goods. Thanks to its network on the ground, Switzerland Global Enterprise can help you evaluate which approach will be most successful in your case.
2. Determine the selection criteria and categorize them
Depending on the situation, industry sector, target group, etc., various criteria are relevant when it comes to selecting a future distribution partner. We have put together some important ones for you:
- Partnership model: which model makes sense for you and your company? (Collaboration with importer, distribution partner, agent, wholesaler, retailer, etc.)
- Industrial sectors: where is the partner’s network to be found?
- Complementary products: which ones does the partner sell?
- Customers: which major customers or customer groups does the partner serve?
- Geography: where does the partner operate?
- Sustainability: how important is the topic and how is it implemented?
- Company size
- After-sales service
- Logistics
- Reputation
Then there is the question of weighting the categories. Here, you can be guided by your experiences in other countries – always taking into account the specific local circumstances, of course.
3. Review relevant inquiries from foreign distribution partners
Sometimes the best solution is obvious: you might have already recently received an inquiry from a company in your target country keen to sell your products there. It is particularly important to check speculative inquiries regarding partnerships to ensure that they are reputable. On the other hand, if you have been actively contacted, it can also signify an above-average level of serious interest.
4. Use your network
Use your contacts and get information from your business partners. Companies that make complementary products or products upstream or downstream in the manufacturing process may have the right contacts. This could be a distribution partner looking to add other products with a similar customer base to its range, for instance.
5. Attend trade fairs and conferences
Trade fairs and other events are and will remain the traditional places to look for distribution partners. It is particularly worth doing some preparatory work and arranging meetings with potential candidates in advance. If you would like to exhibit, participating under the umbrella of a SWISS Pavilion increases your visibility and thus your chances of success.
6. Search public sources
Many countries and industrial sectors have special databases where you can find distribution partners, besides the traditional search engines such as Google. As well as looking for distribution partners for certain countries and products, you can also search for companies that sell complementary products or brands.
7. Work with a specialized agency
Another option is to hire specialized agencies to help with the search for distribution partners. Thanks to its branch offices and global network, Switzerland Global Enterprise not only has the necessary local contacts, but also understands the needs of Swiss SMEs in depth. We conduct research into the best distribution partner in the target country, take care of the initial contact and support you during the negotiations.
8. Conduct a background check on your potential distribution partner
Regardless of how you found your potential distribution partner, it is advisable to perform a background check. Specialized databases and agencies can also help with this, while Switzerland Global Enterprise can assist with taking local sources into account, too. A tried-and-trusted strategy is also to ask the potential distribution partner for references. You can then contact these referees directly and ask them about their experiences.
