My last two blog articles have discussed fulfilment houses and setting up your own retail stores in the US.
Those two US market entry channels are at opposite ends of the distribution spectrum and between them
is the American distributor. Using a distributor is a US market entry strategy that is more advanced than a
fulfilment house strategy without making the commitment to establishing your own storefront. However,
finding a reliable distributor who can increase your sales is harder than it seems and you will only know if
you have the right distributor after you have worked with them for twelve months.
Do You Need a Distributor?
Take the time to find out how similar products are distributed in the US. If there are established distributors
who handle products like yours then that will provide a well travelled path to follow but be hesitant about
working with a distributor that carries competing products. Even though there are established distribution
channels it will all be new to you so start working with one distributor who manages a limited number of US
states so that you can test your strategy and learn the ropes.
What to Expect from a Distributor
A distributor should take responsibility for bringing your products through US Customs, getting it to their
warehouse, and finally getting it to the retailer. All of those activities come at a cost and then the distributor
will put its profit margin on top. The right distributor will carry complementary but not competing products
and they will know the market segment that you are targeting. Be aware that if you enter a contract with
someone who carries competing products they may actively restrict the distribution of your product.
Finding a Distributor
Two ways to find distributors are by asking other Australian suppliers for recommendations and by
attending tradeshows in the US where you can showcase your product. At tradeshows you can ask other
vendors who they use and you may also be approached by distributors wanting to take on your product.
Trying to find an American distributor without coming to America is a risky proposition because you need
to spend time getting to know them before making a contractual commitment. On that note, it is important
that read the contract carefully and make sure you know what you are signing up for and for how long.
Using a US distributor for your US market entry has its pros and cons, and your decision should be based
on your goals and your resources. If you find a good distributor for getting your product to US customers
then they will actively market your product in the US and let you focus on other areas like product
development and cost control. This means that you will give up some of the control that you would
have retained by using a fulfilment house or opening your own store.
If you want to start looking on the internet for information then the National Association of Wholesaler-
Distributors (http://www.naw.org/about/assoclist.php) has a list of members which includes industry-specific