You’re a small company with a good product. You are confident that the product can sell, but you don’t have the financial resources to hire a team of fifty salespeople to market and sell the product for you. You also don’t have the staff resources to support those that purchase the product. How do you make your good idea and good product create success for you?
Distributors can help market, sell, and support your product. Understand that you’ll give up a piece of the pie, probably in the form of a percentage of revenue generated from sales, to have distributors support you. Some of the pros and cons of using distributors include:
If you hire a distributor already in your market, they know how to sell in that market because they will have presumably already been doing so.
Because they have been selling in your market, they have resources established specific to effectively market and sell what you have.
You don’t have to incur the payroll and overhead expenses of bringing on these skills to your payroll.
If the relationship doesn’t work, you can cut it off quickly, as long as your agreement allows.
Nobody knows your business or your product like you do, including a distributor.
You could be only one of many things the distributor is distributing.
Distributors may care most about the biggest fish – who will generate the most sales and profit.
Communication with the distributor is rarely daily like it is with an employee.
Pros and cons are almost evenly distributed. The weight of each is dependent on the type of business you have and how willing or well you are able to manage the drawbacks. Distributors can and in many cases do work extremely well.
By John Vaughan