But six or twelve months later, the picture can look very different. Enquiries are limited, communication has slowed and the initial enthusiasm hasn't translated into meaningful sales. The natural reaction is to question the distributor's commitment. However, disappointing performance isn't always entirely the distributor's fault. Before deciding whether to replace a partner, there are several things manufacturers should consider.
Was there a clear plan from the beginning?
A distribution agreement is not the same as a market development plan. Without clear expectations, distributors will often concentrate on their established suppliers, existing customers and products they already know how to sell.
A practical approach is to agree an initial 90-day development plan. This doesn't need to be complicated, but it should establish:
• Product training: Ensure the distributor's salespeople understand your products, their applications and their competitive advantages.
• Target customers: Identify specific customer groups or accounts the distributor intends to approach.
• Joint sales activity: Arrange initial customer visits or online meetings together, helping the distributor understand how you position and sell your products.
• Responsibility: Agree who within the distributor's organisation will take ownership of your product range.
• Progress reviews: Establish regular checkpoints, perhaps at 30, 60 and 90 days, to review activity, opportunities and any obstacles.
The precise approach will depend on the products, market and sales cycle. The important point is that both parties understand what they're expected to deliver.
Where does your product sit in their priorities?
Most industrial distributors represent several manufacturers. Your products may complement their existing portfolio, but that doesn't automatically mean they'll receive the attention you expect. A distributor's priorities are influenced by more than margin. Price competitiveness, product availability, ease of selling and the support provided by the manufacturer can all affect which products they recommend.
We've seen this first-hand in international sales. In the lifting equipment industry, some distributors represented both premium European products and lower-cost alternatives from Asia and other markets. For certain applications, customers were prepared to pay more for a premium solution. In others, a lower-cost product was considered sufficient.
The distributor wasn't necessarily neglecting the premium manufacturer. They were responding to different customer requirements and budgets. We've also seen how product availability can influence purchasing decisions. When customers need equipment urgently, a distributor may recommend an alternative supplier simply because the required product is available sooner.
The lesson for manufacturers is to understand why a distributor would recommend their product over an alternative. That might be technical performance, reliability, service support, availability or total cost of ownership. Whatever the advantage, it needs to be clear to the distributor and relevant to the end customer. A distributor cannot be expected to consistently promote a product if the manufacturer hasn't given them a compelling reason to do so.
Are you providing enough support?
It's easy to attribute disappointing sales entirely to the distributor. It's harder to ask whether the manufacturer is providing everything necessary to help them succeed. For specialist industrial equipment, sales often involve engineers, purchasing departments and technical decision-makers. Distributors may need assistance with product selection, applications, demonstrations and technical specifications.
Manufacturers should consider whether they're:
• Responding promptly to quotation requests and technical enquiries.
• Providing appropriate product training and marketing materials.
• Offering competitive commercial terms and realistic delivery times.
• Supporting important customer meetings and opportunities.
• Helping the distributor overcome technical or commercial objections.
A distributor may be enthusiastic about your products but struggle to generate business if quotations take too long, technical questions go unanswered or customers can obtain suitable alternatives more quickly. Successful distributor relationships require commitment from both sides.
Are you measuring the right things?
Revenue is ultimately important, but it isn't always the most useful measure of early distributor performance.
Industrial equipment can have long sales cycles, particularly where customers require technical evaluations, demonstrations or capital expenditure approval.
Rather than focusing exclusively on orders, manufacturers should also monitor:
• Meetings with relevant target customers.
• Qualified sales opportunities being developed.
• Product demonstrations and technical discussions.
• Quotations submitted and followed up.
• Progress against agreed market development activities.
These measures help distinguish a distributor actively developing the market from one simply waiting for enquiries.They also provide a more constructive basis for regular performance reviews.
When is it time to move on?
Not every distributor relationship can be rescued.There are some warning signs that manufacturers shouldn't ignore, particularly when a distributor:
• Repeatedly fails to deliver agreed customer-development activities.
• Regularly postpones or cancels progress reviews.
• Is slow to respond to customer enquiries or follow up quotations.
• Cannot provide reasonable visibility of the customers and opportunities being developed.These issues become more significant when the manufacturer has provided the necessary support and given the distributor a fair opportunity to deliver. However, replacing a distributor shouldn't be the automatic response to disappointing results.
First establish whether the underlying problem is capability, commercial commitment, market conditions or the support being provided. Otherwise, there's a risk of repeating the same mistakes with the next partner.
Developing distributors takes ongoing attention
Finding the right overseas distributor is an important first step, but appointment alone doesn't create sales. For manufacturers without dedicated international sales resources, maintaining regular contact, supporting opportunities and developing distributor relationships across several markets can be challenging.
Through Nexus Market Partners, we help manufacturers identify and develop international distributors, providing additional commercial resource without the commitment of a full-time international sales appointment.
