300 Tips for Export Managers

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Insights to Accelerate International Expansion

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One of my favorite Beatles songs

is “We get by with a little help from

our friends.” Export managers build

international businesses through

advice from their network of

colleagues, countrymen, and

distributors. I am grateful for my

export friends that serve as the

inspiration for many of my Export

Express articles.

Export Express has released a “Best

of Ten Tips” compilation resource.

This guide contains more than

300 timeless tips for building your

export business and managing

distributors. More than 400,000

industry professionals have visited

our web site to study our strategies

and suggestions for building brands

in overseas markets. Our reader

feedback suggests that our Ten Tips

columns are appreciated for sharing

practical commercial advice on

common export issues.

Our future success is dependent on

our ability to expand our sales to the

world’s 7.9 billion consumers. Export

Solutions can help!

Greg’s Ten Tips

1. Good news travels fast and bad

news travels slowly

2. If you want to know what’s

really going on, spend a day

visiting stores

3. Pick up the phone and call a friend

or business partner versus email

4. Be positive. Think, “why not?”

5. Results are directly proportionate

to your investment:

Marketing, People, Focus, Time

6. A distributor (or Broker) “respects”

what the Brand owner “inspects”

7. Shipment numbers rarely lie

8. Put it in writing

9. If two people agree on the

principle of a deal, you can usually

work out the financial terms

10. There is more in common with

industry practices across the globe

than differences. Brand owners

everywhere desire more shelf

presence and retailers demand

more discounts. Recognize the

differences, but focus on the

universal requirement for superior

products, marketed at a fair price.

300 Tips for Export Managers

Page 2

How to Win 2022 – Ten Tips

Page 7

How Exporters Build Brands

Page 27

Ten Things That Distributors Like

Page 31

New Country Expansion Prioritization

Page 34

International Expansion –

Shoestring Budget

Page 41

New Product Launch:

Ready, Set, Grow – Ten Tips

Page 43

Ten Tips – Common Export Mistakes

Page 52

Ten Tips – Translating Export Inquiries into

Incremental Sales

How to Win 2022 – Ten Tips

2022 will be challenging and everyone can benefit from “new

ideas.” Listed below are Export Solutions’ 10 strategies to build

your export business in 2022 and beyond.

Focus 5 Countries

A true measure of export success is relevant market share in large

countries like China, USA, Japan, Mexico or Saudi Arabia, not

selling small quantities to 50 or 100 countries. Each international

manager should select his global “Focus 5” countries and strive to

spend at least fifty percent of travel time in core countries. Regional

managers should adapt the same mantra for gamechanging results

at their top one or two opportunity countries.

China Strategy Renewal

Most brands have learned that China is not a country where

you can appoint a national distributor and visit a few times

a year. E-commerce represents most of industry growth and

up to 50% of sales for imported brands. Many companies

appear at a “10 Year Crossroads.” There is an urgent need to

hire “boots on the ground” in China to execute a multi-channel,

multi-region strategy.

Small Shops – Big Opportunity

Small stores represent 50% of sales or more in many emerging

market countries in Asia, Latin America, Middle East, and Africa.

These stores are particularly relevant for impulse categories such

as beverages and confectionery/snack. Small shops are not a

focus for niche brands or start-ups.

E-Commerce

Will e-commerce represent ten percent of sales by 2025?

Twenty percent? Who knows? We can all agree that it will be

bigger. Challenge each distributor to develop an e-commerce

plan. Share learning from your corporate office. Treat Amazon

as another “Global Customer.”

New Channels

My Summer Export Express identified 23 “alternate” channels

that could represent new customers. These channels tend to be

“less demanding” and more open to new brands.

USA – Multi Channel

USA based manufacturers routinely sell to ten channels or more.

Most adopt a matrix model meshing channel specific brokers

for supermarkets and foodservice with direct sales to Walmart,

Costco, and Drug customers. Overseas brand owners should

adopt the same approach to reach all USA channels and regions.

Listing Map

An up-to-date listing map and “white space” plan is the essential

one-page template for every country.

Is the Store a 10?

Can 2022 be the year for focus on improved in-store brand

presence? Brands (& distributors) own the tools and knowledge

to reach these objectives. The critical element is your focus and

execution of a formal shelf drive. Contact us if we can help.

Upgrade Distributor Network

Every company has distributors that are “under-achievers” or that are

no longer a good fit with the brands aspirations. Begin the “upgrade”

process early in the year to impact second half 2022 shipments.

Export Team

How can you redefine roles and responsibilities to obtain more

productivity from your export team? One idea is to appoint one

manager to focus on new country pioneering for a large country

as a special project or “stretch” assignment. Another concept is to

place a junior “company missionary” in a key distributor’s office

for a one year training assignment.Contact Export Solutions for

“new ideas to solve old problems.”

2022 Winning Strategies

Geographic • Focus 5 Countries

• China Strategy Renewal

Channel • Small shops

• E Commerce

• Alternate Channels

• USA-Multi Channel

Sales Execution • Listing Map

• Is the Store a 10?

Organization • Upgrade Distributors

• Export Team

Every international manager spends

hours preparing senior management

presentations. What happens when you

get called to see the CEO “right away”

or you see him in the elevator coming

back from lunch? The obvious question

is “how is it going?” Export Solutions

shares our 10 tips to “impress the boss.”

Shipments vs. Annual Budget

The CEO has the corporate number

to hit and wants to know if you will

achieve your fair share. Orders are nice,

but shipments translate to revenue.

Measure progress versus time elapsed

and compare versus similar time period

last year. Publicly traded companies are

concerned with quarterly metrics, while

privately held businesses may focus on

total year budgets. Be specific, be

accurate, and do not appear overly

optimistic. Discuss shipment

performance first before you raise

points regarding market dynamics.

Remedial Plan

Some exporters are blessed with

healthy businesses, tracking ahead

of pace. Most of us will land right

on target. A few are struggling.

Shortfalls happen for a hundred

reasons including currency

fluctuations, competitive activity, and

reduced investment. The key is to have

your remedial plan ready. Do not be

afraid to ask for more spending if you

need help. If management refuses, at

least you have tried to correct the gap

versus expectations.

Core Countries

Focus your update on the top five

countries that drive your business.

This sounds obvious but I have

personally listened to many

enthusiastic success stories about

Latvia, Malta, and Bahamas. Good

news, but the chief wants to know

what is happening in focus countries.

Risk to Plan

CEO’s assessment by the board

depends on accurate guidance on

current performance as well as long

range outlook. Smart executives can

read shipment reports, but want to

identify potential risks to the plan.

Surprises are tough to digest.

Transparency on challenges as

well as upside is appreciated.

What’s Working? What’s Not?

Many companies export to 20, 50, 100

countries or more. Results include a

mix of top performers and laggards.

I endorse the practice of sending a

mid-year, one-page report card to

each distributor. Include a request

for feedback on “what’s working and

what’s not.” Share key findings with

your manager and CEO.

How Can We Double the Business

in Three Years?

The CEO wants your opinion on

accelerated growth options. Leaders

are not content with 5 percent

increases. Doubling the business

may include acquisitions of overseas

category players or construction of

offshore factories. Think big!

Required Investments and Resources

Historically, export is starved for

resources. Which comes first: sales

or investment? Lay out your priorities

for the executive team.Validate export

rationale for more headcount.

Test Updates

Every company should be seeking

new ways to solve old problems.

Update management on new initiatives.

Share positive news as well as tests

that provided learning, but results

behind expectations.

How is the Team?

Export development is a team sport.

Caring CEOs will want to learn how

your group is doing, particularly

in offshore locations. Share your

organizational development plan,

training activities, succession

planning, and status of new hires.

How Can She (or He) Help?

Most CEOs are supportive and

genuinely interested in helping.

Business in the home country may

be mature and international always

provides a pathway to higher growth.

Create your short “wish list.” Invite the

boss to visit your markets or call a key

distributor. Ask for support for your

“pet” project. Always keep your

immediate manager in the loop!

CEO Update: 10 Tips to Impress the Boss

Many supermarkets offer sections

dedicated to products from foreign

countries. The “Homesick” shelf allocates

one meter, mini departments, represented

by iconic niche brands from the USA,

Germany, Italy, UK, Brazil, or Mexico.

Despondent expatriates rush to this

section hoping to find their favorite

candy or “sauce” brand from back home.

Often, this represents a “foot in the door”

and a starting place for your business

development. However, most brands

soon become frustrated with this remote

shelf location and plot strategies to enter

the main fixture to compete side by side

versus local competitors. Read Export

Solutions Ten Tips to gravitate from

“Homesick Shelf to Category Captain.”

1. Analyze the Data

Government census data (and embassies)

can reveal the number of your citizens

in a foreign country. For example, in the

USA there are many Italians and Brits in

New York, Germans in Pennsylvania and

Mexicans in California. Tourism statistics

also supply guidance where to find your

current customer base overseas. Current

sales per capita figures indicate countries

where your brand has traction beyond

your core expatriate base. This analysis

provides you with the first clues on

where to focus your investments.

2. Research Local Preferences

A food scientist or market research

company could study local food

preferences and your product portfolio.

Are there options to incorporate your

brand into traditional recipes? Consider

adapting your core product line to meet

local flavor preferences. Pringles built

exceptional sales and excitement by

launching innovative new flavors such as

Jalapeno, Curry, Grilled Shrimp, Ketchup,

and Pizza.

3. Test “Higher Spend” Marketing Plan

Everyone knows the fundamentals of

brand building: sampling, billboards,

radio, and social media. Usually,

exporters may be hesitant to invest in

advance of sales. However, it may be

“low risk” to pick one small-medium

size country to test a targeted marketing

support plan.

4. Hire a Local Manager

It’s tougher and tougher to manage

exports via remote control from company

headquarters. Smart exporters are

opening offices in regional centers like

Shanghai and Dubai for placement close

to the action. You have a choice to send a

missionary from company headquarters

or a local hire who understands the

language, market, and how to get things

done at store level.

5. Focus on Upscale Supermarkets

Identify the “upscale” supermarket chain

in a country. Their consumer base is likely

more adventurous and boasts higher

purchasing power. Invest to be a category

leader at these high profile customers.

Often, middle income supermarkets look

to these upscale chains for assortment

inspiration. In the USA, think of HEB and

Whole Foods first, not Walmart. In the

UK, look to Waitrose vs. Morrison’s. The

same analogy applies to every market.

6. Manufacture in Country

Eliminating overseas freight charges and

duties may allow you to compete more

effectively on a price basis. Labeling in

the local language may be a plus. A small

factory also establishes you as a member

of the community with employees that

will create goodwill. A manufacturing

site may be complex and expensive, but

co-packers may represent another option.

7. Move to a Bigger Distributor

Frequently, a new brand will align with

a small distributor consolidating brands

from one country. This is a logical and

viable strategy to get started. However,

I’ve witnessed countless cases where the

brand’s aspirations and requirements

outstrip the capabilities of the small

distributor. Brands may consider moving

to a more powerful distributor, with

deeper brand building capabilities.

Warning: be prepared to invest more

with a big distributor or you risk losing

ground as unsupported brands may

get lost in the mix. Export Solutions’

database tracks an average of 85

distributors per country.

8. Sponsor a Sports Team or Charity

Fans everywhere love their teams.

Alignment and support of a local

sports team yields dividends. Pick a

charity that contains a meaningful link

to your product or target consumer.

Many supermarket chains have a

favorite charity providing a route to

collaborate with a trading partner for

a worthwhile cause.

9. Bring Your Team

Retailers are desperate for fact based

consumer insights. Bring your research

and technical experts from headquarters

to visit overseas retailers and distributors.

Let them “wow” them with their category

knowledge. Note: you may need to coach

your experts on appropriate messages as

sometimes foreign buyers don’t care how

you operate in Chicago or London.

10. Create an Anniversary Event

Many brands have been available

in foreign markets for 10, 20, 30 years

or more. Why not design an anniversary

event commemorating “25 years in the

______ Market.” Elements could include

special packages, consumer contest,

public relations, charitable donations,

and a celebratory dinner for your

retail customers.

Ten Tips: From Homesick Shelf to Category Captains

The classic industry question is: “How do you maintain

distributor focus on your company priorities once you leave the

market?” There is no easy answer, but a solution is to encourage

a distributor to “fall in love” with your brand and company.

Falling in love is based upon an attraction to a person and

enjoyment of spending time with them. The same feelings can

apply to a brand. I regularly witness super human efforts by

distributors for small and medium sized brands just because

of “Brand Love.” Listed below are Ten Tips to romance your

distributors to superior results.

1. Master Chef Endorsement

The first step is convince the distributor team to be passionate

consumers of your product and enthusiastic brand ambassadors.

For food products, invite all of the group to lunch at a popular

local restaurant. Pay a well-known chef to prepare a meal

featuring your products. Or cook lunch for them yourself.

For candy and snack brands, provide samples to share with

the distributor’s children’s sports clubs. Provide frequent

and generous samples to all of the distributor team.

2. Fun Sales Meetings

Every distributor has sales meetings for their entire company.

These are usually a repetitive drone of Powerpoint slides. Why

not hire an agency to create a fun presentation module which may

include audience participation, games, or costumes? Or sponsor

a local motivational speaker or training workshop using your

products as the case studies. Break the mold of boring meetings!

3. Provide Great Customer Service

Respond to requests quickly. Ship complete containers to keep

the pipeline filled. Pay all bill-backs promptly.

4. Distributor Awards

Recognize your high performing distributors with an award.

This could be Distributor of the Year or for $1 million in sales

or for 15 years of partnership. Some companies sponsor smaller

awards for key account manager of the year in each market and

retail representative of the year. Publicize the event by awarding

a plaque, hold an awards luncheon, take photos and share a press

release of the celebration.

5. VIP Visit to Corporate Headquarters

Treat your distributors as VIPs at your corporate office. This

trip creates a memorable bonding experience and a chance for

you to serve as a good host. Take the distributor to a product

development lab and organize a meal with your CEO or

executive officers. Make him feel like part of the family.

6. Support Local Events and Charities

Creative distributors drive incremental sales through local

marketing events. Display a willingness to support their ideas

and invest in new programs. Events that sync with the

distributors (or retailers) special charity build substantial

goodwill and appreciation.

7. Annual Incentive Trip

Many companies sponsor trips for distributor executives who

attain their annual sales quota. Mid-size brands source added

focus by sharing the benefits of a good year by inviting achievers

(and spouses?) to trips in resort locations like Hawaii or

international cities such as Rome. Everyone works hard

to qualify and vow to return “year after year.”

8. Holiday Baskets

Send baskets or gift packs to distributor employees that include

your product and other adjacent holiday items. The idea is to

extend your brand’s relationship to your partner’s homes.

9. Distributor Advisory Council

Form a small elite group of distributors to advise your company

on international development. Meet twice a year with access

to your companies senior management. All members of the

Distributor Advisory Council will meet their sales target.

10. Treat Distributors as Your Best Customers

Be nice. Say “thank you” frequently. Send handwritten notes to

people to recognize a nice display or a fixed problem. Have fun

while you work.

Distributors may work with twenty brands or more, each

shouting for attention. Distributors support all their brands, but

there is no magic science to allocate time equally. Naturally, we

all spend more time and effort for the brands and people we like.

What can you do to make your distributors “Fall in Love?”

Ten Tips – Getting a Distributor to Love Your Brand

Need more information? Visit www.exportsolutions.com.

Exporters envy the massive clout

and impressive results generated by

multinationals such as Nestle & Procter

and Gamble. These powerful brand

builders succeed in emerging markets

by adhering to a well defined new

business development process. Their

approach represents an ideal mix of

global category knowledge with local

execution. Recapped below are key

elements on how multinationals win

in international markets.

Market Research

Multinationals invest in both qualitative

research and syndicated data. Significant

effort is directed to understand local

consumer behavior, shopper insights,

and attitudes to new product concepts.

This information is paired with

syndicated data from providers such as

Nielsen and Euromonitor. This allows

companies to study trends and calibrate

the “size of the prize.”

Innovation & Adaptation

New product ideas sweep the globe

these days. There are too many “me too”

products, offering little differentiation

to global buyers. Multinationals dedicate

technical resources to identify the “next

big thing.” Their point of difference is the

ability to adapt these big ideas to local

tastes and habits. This may be achieved

through a unique marketing approach,

adjustment of a flavor profile, or a distinct

package appropriate for a local market.

Local Production

Manufacturing facilities close to

your consumers supply a tremendous

competitive advantage. Direct benefits are

sourced from the elimination of overseas

logistics costs and duties. This translates

to lower shelf prices and more money to

invest in marketing or higher gross

margins. A plant is usually associated

with scale and creation of a local

subsidiary. These employees and their

families become “brand ambassadors” for

the companies where they work. A factory

presence creates spending and pride in a

community. Factories may be expensive,

but co-packing may be another option.

Close to the Customer

Multinationals typically enjoy special

customer “intimacy.” Their critical mass

and importance to the retailer create

more of a balanced relationship and

partnership. The multinationals local

management may be empowered to make

decisions quickly without needing to

check with an overseas office.

Multifunctional Team Support

All commercial teams have sales people,

but multinationals may offer “on the

ground” customer support in other

critical functions. This includes product

supply, financial, marketing, information

technology, and customer service. It takes

a professional “team” to win in our

business, not just a “super salesman.”

Marketing Investment

Large companies maintain the resources

to invest in consumer marketing and

trade support programs. All brands

allocate dollars to these activities, but

multinationals fund their launches to

include television advertising, social

media and consumer sampling. They

entice retailers with large discounts

and rebates in return for impactful

shelf visibility and massive end of

aisle displays.

Competitive Pricing

Multinationals’ scale allows them to

offer competitive pricing in a market.

Frequently, their pricing strategy for

a new brand will include a structure

at parity versus current players or even

at a savings. This creates a measurable

advantage versus brands entering with

“super premium” pricing and little

marketing support.

Category Expertise

Multinationals frequently serve as

“Category Captains” yielding benefits

and respect from retailers. They are

viewed as important sources of

category trends,insights, and analysis.

A multinational brings knowledge from

adjacent categories or markets that can

be applied to a new product launch.

Think Big

New product launches from multinationals

contain high expectations, focus, and

support levels. Typically, these initiatives

are aimed at creating new brands with

sales measured in the millions. New

product launch plans feature three year

sales targets and investments. Normally,

these brands lose money in year 1, break

even in year 2, and budget positive cash

flow for years 3 and beyond.

Glocal Strategy

International marketers win with

a “Glocal” approach. This involves

leveraging “global” category expertise

and resources and adopting it to a “local”

market. Multinationals win because they

offer critical mass in the country of their

corporate headquarters, as well as

international countries.

How Multinationals Build Brands

1. World Cuisine

Foreign travel and exposure to world cuisine has sparked an

appreciation of food and confectionery products from around

the globe. Today’s consumers enjoy diverse food choices as

they plan their weekly menus. Asians may consider American

or UK brands as ethnic food, just as we consider Thai or Mexican

cuisine as “international.” Successful exporters focus on

traditional products and favorite brands from their home country

that may be considered to unique to citizens of other nations.

What is your products USP (unique selling proposition)?

2. Visit Each Country

Export managers should visit each country at least once. It’s easy

to capture the pulse of a market by visiting stores and meeting

with distributor candidates. Winning requires the combination

of your brand and category expertise matched with your

distributor’s mastery of local industry practices.

3. Complete Homework

Veteran exporters complete fundamental research on category

conditions prior to market entry. This includes size of the

category, competing brands, pricing, and merchandising

standards. Careful consideration should be applied to what

added value your brand contributes to the existing category

dynamics in a new market.

4. Choose the Right Distributor

Selecting the right partner is the third most critical success factor

after creating a meaningful USP and commitment to invest in

brand building activities. Finding the distributor that is a right

fit is a difficult task. Most brands prefer to align with a category

specialist (i.e., confectionery distributor) or a distributor that

specializes in brands from your home country. In every case, look

for a distributor that is passionate about your brand and offers

sufficient scale to achieve your business objectives.

5. Crawl, Walk, Run

Export is not easy and new business development always takes

longer than the optimistic dates we place in our timeline. Start

with listings at upscale supermarkets and global retailers. Create

a success story at a few high profile retailers versus trying to sell

to all accounts during year one.

6. Results: Proportional to Your Investment

Every country maintains a universal requirement to invest in

consumer and trade marketing activities. How much does it cost

to secure shelf presence and merchandising support at the

leading supermarket chain in your home country? Why should it

be any less expensive to enter a foreign country where your

brand is unknown? Your investment level signals to distributors

and retailers your commitment to the market.

7. Premium Pricing

International brands may command as much as a fifty percent

price premium versus local products. Savvy consumers recognize

high quality, foreign products and are willing to pay a slight

premium. Super premium pricing rarely works, as families

hesitate to try a new brand that costs one hundred percent more

than other category options.

8. Guerilla Marketing Activities

Successful distributors are magicians at creating brilliant

programs with minimal investment. Export managers challenge

their partners to develop “outside the box” programs to build

brands. The concept is to establish a culture that rewards

innovative, promotional activity.

9. Leverage Government & Trade Support Organizations

Exports mean jobs and most American and European countries

have established valuable programs and resources to facilitate

exports. Many activities are free or are available at a substantial

discount. For example, in the Confectionery sector, the National

Confectionery Association (USA), German Sweets, and ABICAB

(Sweet Brazil), all provide excellent resources for new and

experienced exporters.

10. Get Your Distributors to Love Your Brand

Experienced Exporters are multi-taskers, able to juggle many

priorities with far fewer resources than multinationals. An

essential skill is to inspire a network of foreign distributors to fall

in love with your brand.This requires you to earn your position

as a preferred supplier by serving as a responsive partner that

supports your brand with product innovation and marketing

investments. Distributors will work harder for people that

recognize their efforts and are fun to be around.

How Exporters Build Brands

Talk to an Expert

• Find Distributors in 96 Countries

• International Strategy Road Map

• Fix Problem Markets

• Next Level Sales Management

• Export Workshops

• Motivational Meeting Speaker

Contact Greg Seminara at (001)-404-255-8387 to

discuss your business development project.

www.exportsolutions.com

Have you ever experienced an incredible

first meeting with a distributor? Strong

alignment, good fit, everyone smiling,

timelines agreed. Then, nothing happens!

The export manager may take up to six

months to translate his outlook from

“done deal” to “dead deal.” There are

two reasons why this occurs.

First, distributors are positive,

competitive athletes, always striving

to win new business. However, in some

cases, the distributors wake up after time

to reflect and decide they really weren’t

that interested in the brand after all.

Failure also results when a strong

first personal meeting at a trade show

or distributors office is followed by

a relationship buried in email

communication, with no personal touch.

Below are Export Solutions’ Ten Tips on

converting promising new business leads

into tangible business partnerships.

1. Zoom/Teams – Don’t Depend on Email

Motivated distributors still return phone

calls, but frequently receive up to 200

emails a day, many from existing brand

partners. Top distributors’ business days

are captured by a continuous flow of

meetings with customers, principals,

and their own employees. Best bet is to

call a potential partner or set up Zoom

meetings. Email is okay for routine

correspondence, but too easy to ignore

or delete.

2. Follow Up Immediately & Frequently

Time slips away, as Export Managers

focus on existing businesses and

“problems of the day.” One tip is to

put regular follow up reminders on

your computer calendar.

3. Focus on 10 C’s: Category Review,

Calculation, Cost of Plan, Compliance,

Contract, etc.

Described below are critical elements to

translate a “lead” into shipments.

Category Review: How does your

category look in target country? Category

size, competition,pricing,margins, and

merchandising activity.

Calculation: What is the distributor’s

proposed calculation from your factory

gate to the store shelf? What are standard

costs like duties and taxes? What are

flexible or negotiable like trade discounts

and distributor margin?

Cost of Plan: Each brand needs a plan

to gain market entry. This includes key

account “sell in,”

followed by consumer

and trade promotion

activities. Look at the

distributor’s proposed

plan, as well as several

options with different

price tags.

Compliance: Many

countries feature a

product registration

process and labeling

requirements. In some

countries, this step is

easy with automatic

compliance for a USA

or European brand. Or a

simple solution with a small distributor

applied sticker. In other countries like

Japan or Indonesia, plan on one year or

more to navigate the complex process.

Contract: “Ready, Set, Go” can be delayed

by 3-6 months due to contract negotiations.

Company lawyers demand 20 page

agreements in English that even the

Brits can’t understand. Distributors

prefer two page letters of understanding

or a handshake deal. Do what is right

for your business, but expect delays

and frustration.

4. Request References

A good idea is to quickly request

distributor references from other brands

they handle. Motivated distributors will

send impressive references right away.

Also, have your credit department run

a Dun and Bradstreet or Equifax report

as soon as possible. Many trade show

meetings are with “pretenders” who state

exaggerated claims and are ultimately too

small to handle your brand. Better to

discover this sooner versus later.

5. Move Beyond the Distributor Owner/MD

The distributor owner “writes the

checks,” but frequently serves as a

“bottleneck.” The key is to quickly get

your brand assigned to a “worker” whose

task is to move your project through the

system and produce an order!

6. Establish Realistic Timelines

Sync with category review dates and avoid

holiday periods. Update timelines

frequently. New distributor relationships

always take longer. Plan on six months

from first meeting to first shipment. Be

pleasantly surprised if things move quicker.

7. Distributor Response Time

Signals Interest Level

How often do you check your emails?

Probably every hour. When I work

on distributor search projects for well

known brands like Pringles, Tabasco,

or Barilla, distributor response is

lightening fast. Motivated distributors

will chase you if they are interested

because they are anxious to start selling

your brand!

8. Establish Regular Checkpoint Calls

I suggest every two weeks at a

minimum. Use a common document of

priorities, action steps, and due dates.

9. Visit the Distributor

It’s amazing the amount of progress

that will be made during a meeting

at the distributor’s office. Also, the

distributor will work hard in advance of

your visit as your project moves up the

priority list and they want to guarantee

a favorable impression. A visit to the

distributor’s market signals your

commitment. Beware if the distributor

is reluctant to schedule your visit. Either

he has changed his mind about a

partnership or his office and capabilities

do not match the bold promises made at

the initial trade show meeting.

10. Parallel Path Two Candidates per Country

A favorable first meeting represents an

excellent start. However, there are still

many steps (think 10 C’s in point 3)

before you sign a contract and receive

your first order. Always keep two

candidates in the process, in case your

top choice disappoints. This can be

tough, but represents a better option

than needing to start the entire process

over again.

Ten Tips: Converting Promising Leads to New Partnerships

Every exporter has countries where

their brand performance lags far behind

expectations and market potential. This

appears as a serious issue when the poor

results are in a large strategic country like

the USA or China. The first step to fixing

the situation is to admit that you have

a problem. Too many times, export

managers loyally cling to their plan and

existing distributor with hope that “next

year will be better.” The likelihood is that

sub-par trends will continue without

intervention. Remember, it’s your quota

and job that suffer due to lackluster

results in a country. Listed below are

Export Solutions’ 10 Tips on action

steps for under performing countries.

1. Look in the Mirror

Chances are that your current brand

proposition is wrong for the country. Your

product sales are a reflection on buyer and

consumer response to your product range.

An underqualified partner does not help,

but is usually just part of the problem.

2. Research Consumer Habits

Conduct category research to understand

why consumers in a foreign country do

not appreciate your brand like they

do “back home.” Category habits and

development vary widely, particularly

around food products. Recently, I

confirmed several examples where Asian

consumers demonstrated little interest in

certain Western style foods (although

everyone loves candy and snacks!).

3. Investment Level

Many poor performers suffer the classic

issue of insufficient funds to invest in

marketing and trade programs. There is a

cost of doing business everywhere and the

investment requirements can be huge in a

place like China or the USA. Best bet is to

break down the country into smaller areas

and focus on targeted investments with

high potential, regional retailers where

your brand has a higher probability of

success. Avoid the attraction of large,

national retailers where you realistically

cannot support the business. Don’t expect

miracles without basic investments in

marketing and trade promotion.

4. Establish and Track In Store KPI’s

Many exporters focus primarily on monthly

shipment numbers. Shipments represent

the ultimate scorecard, but we strongly

advocate the implementation of in-store

metrics. This process starts with major

account listing maps,

tracking your SKU

level authorizations

for major customers.

The second step is to

launch and measure

in-store presence

guidelines. How do

you judge a good

store from a bad

store? Ultimately,

shipments are

a reflection of

consumer purchases,

not inventory sitting

in a distributor’s

warehouse. “What’s

measured is treasured.”

5. Spend a Day at Retail With

Your Distributor Executives

We all spend too much time in comfy

meeting rooms sharing PowerPoint

presentations with optimistic plans.

Dedicate time for retail with the

distributor executive team. Visit stores

at random, picking an area on the other

side of town from the distributor’s office.

Create a store check sheet to capture

observations such as shelf space,

promotions, and competitive activity.

Speak to aisle clerks and store managers

to get “street smart” on your product

and category performance.

6. Secure Direct Buyer Feedback

Every distributor should maintain

excellent trade relations with at least one

of his key accounts (if not all!). Schedule

an appointment or a lunch with a friendly

buyer to secure his point of view. Try to

keep the conversation focused around

category dynamics and trends versus just

a request for more trade spending. Buyers

love to serve as “experts” and may

support you if you follow their advice.

7. Distributor Brand Manager

The Distributor Brand Manager serves

as our everyday contact and the conduit

to distributor resources. Problems may

relate to having an experienced brand

manager handling too many companies

or a junior brand manager, lacking the

clout to get things done with the busy

sales team. We all like our Brand

Managers, as they take our calls

and rescue us periodically, However,

sometimes it’s just not working and

you need a change.

8. Share Best Practices – Adjacent Countries

Every distributor will be quick to point

out “How different their country is.”

The reality is that there are more

similarities between countries than

differences. Look at an adjacent country

or one with common retailers and share

lessons learned. This may represent a

category review, presentation approach

or special sales contest. Invite the brand

manager to visit a successful country

or attend a meeting where best practices

are shared.

9. FaceTime in the Trenches

Distributors appreciate export managers

willing to contribute to joint resolution

of problems. Consider sending a

company employee to work for 3-6

months on assignment at the distributor.

Visit quarterly or more frequently.

Schedule bi-weekly update calls. Better

to focus attention on fixing a high

potential country than regular visits

to small countries achieving their

objectives. “Distributor respects what

the principal inspects.”

10. Partner Change

A distributor change is the last resort,

but sometimes partners outgrow each

other and are no longer a “fit.” Export

Solutions’ database tracks an average

of 82 distributors per country, so you

always maintain options. Transition

to a new distributor involves business

disruption and even a temporary decline

in shipments. The good news is that

your new distributor will be motivated,

committed and anxious to make a

positive impression with a fast start.

The key is to manage the process with

dignity and open communication, so

that the terminated distributor is not

surprised by your actions.

Ten Tips: Action Steps for Poor Performing Countries

Export Accelerator

Greg Seminara • greg@exportsolutions.com

“Spend time Selling to Distributors versus

Searching for Distributors”

Why have Barilla, Pringles, Nature Valley, Starbucks, Duracell,

Nestlé, Tabasco, Pepperidge Farm, and other leaders used

Export Solutions as a distributor search consultant?

• Powerful distributor network: owner of industry database

9,200 distributors – 96 countries

• Professional 10 step due diligence process

• Results! We make Export Managers’ lives easier!

E-commerce now accounts for nine percent of USA omnichannel

sales, up twelve percent in the last year according to Nielsen.

Grocery e-commerce sales arre projected to exceed $130 billion

in 2022. No one can accurately gauge how big e-commerce will

become, but it is safe to predict that it will be much, much bigger

in the next five years. Billion dollar multinationals and scrappy

start-ups are attacking this channel with vigor, widening the

performance gap versus successful national brands. In China

and India, e-commerce accounts for a majority of the sales for

many imported products. Read Export Solutions’ ten tips for

capturing your fair share of the growth in this strategic channel.

1. Conduct E-Commerce Survey for Core Countries

Create a one page template capturing local e-commerce

customers, online grocery trends and current distributor

engagement. Calibrate where each country is on a development

curve. Source best practices from distributors in China, India,

United Kingdom, and the USA where e-commerce maintains

highest acceptance levels.

2. Speak to Millennials

Spend time with young people, learning how they shop

and blaze through digital marketing messages. Learn why

millennials avoid “their mothers brands” and how many rarely

make a “stock up shop” at a neighborhood supermarket. Another

revelation is the trust that they place in online reviews and key

influencer recommendations.

3. Create a Global E-Commerce Strategy

Align with your company’s overall e-commerce strategy.

Establish benchmarks and toolkits to share with your

distributors. Acknowledge the fast pace of development,

allowing flexibility to pivot fast.

4. Distributors: E-Commerce Business Plan

Request each distributor to create a 2022 e-commerce business

plan. Include new distribution targets, marketing plans, and

shipment objectives for e-commerce customers. Challenge

distributors to hire a young person to serve as a dedicated

e-commerce key account manager. Review each distributor’s

e-commerce marketing plan early and often in 2022.

“A distributor respects, what the brand owner inspects.”

5. Learn Online Marketing Tactics

Goodbye end caps and slotting allowances. Hello “pay per

click” and first page search results. Unlimited shelf space exists

in cyberspace, with room for every sku that you (and your

competitors) produce. Face-to-face buyer meetings are replaced

by online marketing menu programs and transparent sales

ranking information. Learn the new rules or you will fail the

e-commerce test.

6. Treat Amazon and Alibaba as Global Customers

Amazon revenue will exceed $500 billion by 2022, including

more than $400 billion sourced from sales of goods. Amazon

will comfortably rank as the world’s number two retailer, far

exceeding sales by Carrefour or Costco. Multinational category

leaders have established customer teams to service Amazon.

Many place their best, young talent against this high growth

customer. Multifunctional team roles may share the same titles

in Finance, Supply Chain and Marketing, but the “work” is much

different. What dedicated resources are assigned to Amazon and

Alibaba today at your company?

7. Consider a Web Shop

Direct to consumer represented a complex route to market in the

past. Today, new brands and leading companies are jumping at

the opportunity to showcase their innovation and share in depth

product knowledge through their own proprietary web shop.

Outsourced supply chain experts exist to provide fulfillment

solutions. Tangible profits may be elusive today, but there is

valuable, inexpensive learning to be gained from pioneering

in this area.

8. Hire an International E-Commerce Expert

Appear as a preferred supplier by your distributors by providing

leadership insights into this new trade channel. Distributors in

emerging markets are hungry for best practices in establishing

e-commerce brand building models. Send your e-commerce

expert to core markets to conduct workshop training sessions.

Your investment in an e-commerce strategy and guru positions

your company as a preferred partner helping to build the

distributor’s entire business.

9. Appoint E-Commerce Distributors – Asia

Selling through the e-commerce channel requires different route

to market capabilities and skill sets than marketing through

brick and mortar supermarkets. Consider appointing a separate

e-commerce distributor in advanced countries like China and

South Korea. A key issue is managing pricing equilibrium

between your conventional distributor and e-commerce partner.

10. Track E-Commerce Results

Establish KPI’s and measure performance at key customers such

as Amazon. Are you getting your fair share of the growth?

E-commerce development is a top 2022 priority for every brand

and distributor. Some may say that e-commerce is evolving

slowly in their country or too complex and unprofitable to

allocate resources. These are the same people whose parents

were probably in the horse and buggy or fax businesses.

Enhanced focus on e-commerce will position you as a leader

(or survivor) for 2025.

Ten Tips: Ex-Selling at E-Commerce

Are you selling more to Ireland, Iceland or

India? To the Bahamas, Baltics, or Brasil?

UAE or United Kingdom? Small countries

offer solid business opportunities, with lower

complexity and investment required. All

companies export development plans should

include a mix of strategic countries like China

and the USA (Europeans) plus revenue

generators with fewer than ten million

people. Listed below are Export Solutions’

ten tips on why small countries deliver

big business.

1. Limited Local Production

Small countries are highly dependent on

food imports. Even multinationals tend to

locate factories in larger hub countries. This

creates the opportunity for exporters to fill

a high percentage of a small countries food

supply requirements.

2. Distributor Model – Primary Route to Market

Most companies partner with distributors

in these countries. Leaders like Nestlé

and Unilever may find it more productive

and efficient to use distributors versus

establishing a local subsidiary. For example, Export Solutions’

distributor database supplies information on 63 distributors

in Panama, 87 in Kuwait, and 78 distributors in Croatia.

3. Value Chain – Level Playing Field

Brands are frequently able to compete on a level playing field in

smaller countries. Most products maintain similar cost structures

with importation fees, distributor margins, and retailer margins.

International brands do not suffer the same type of price gap

problems versus homegrown brands as they encounter in large

countries with local plants.

4. Low Complexity – Ship and Sell

In many cases, you are able to sell existing Made in the USA

or Europacks. Compliance may be achieved with a small,

distributor applied sticker. Many countries in this cluster

do not require a lengthy registration process accepting USA

or European standards.

5. Brand Awareness Exists

Surprise! Some consumers in an adjacent small country will

already be aware of your brand. This could result from cable

TV advertising or visits from their citizens to your country.

Costa Rica, Malta, and the Caribbean represent tourist hubs.

These popular hosts feed seasonal residents from the mainland

and boatloads of visitors hungry for their favorite brands.

6. Reasonable Cost of Entry

Launching a new brand is economical. Retailers are frequently

happy with a “free fill” of the first order versus an excessive

listing fee. Demos in a handful of high profile stores will

create visibility. Distributors appreciate your existing point

of sale materials.

7. Best in Class Distributors

Some of the best distributors of the world are based in small

countries. The reason is that even enormous multinationals

partner with distributors in these regions. This propels the

leading players to top ten suppliers to the retail trade. These

distributors implement the best practice models from companies

like Procter & Gamble and apply them to all the brands in their

portfolio. I witness many examples where a powerful distributor

creates a huge success story for a smaller brand based upon their

marketplace clout.

8. Currency and Freight Impact

Many countries consider the USA dollar or Euro as legal tender.

This reduces the impact of currency fluctuation and perhaps

some financing charges. Small countries that depend on imports

across all industries enjoy frequent freight service. This creates

competitive rates and potentially lower logistics costs.

9. Distributors: Excellent Relationships and Coverage

Everyone knows everyone in these countries. Distributor owners

emerge as respected community leaders. They know how to get

things done. Distributors are forced to be generalists, selling to

all customers across all channels and all regions within a

small geography.

10. International Brands: Aﬀordable Luxury

Consumers take pride in offering their families the best food

treats from overseas. These world class brands may only be

a few cents more expensive versus private label type options

which face similar cost structures.

Export Solutions serves as a distributor search “helper,” with

300+ projects completed for more than 50 companies of all sizes.

relationships with distributors in 96 countries.

Ten Tips: Small Countries Deliver Big Business

How do you sign new distributors without traveling and trade

shows? The export community is rushing to virtual trade shows

as a new tool. Leading distributors are already past the early

novelty of online “blind dates.” What are the new rules of

online distributor dating? View Export Solutions’ 10 tips for

a successful “match.”

1. Are You a Good Fit For Each Other?

The process of exporter and distributor linkage is frequently

random, with little thought to pre-screening for prime prospect

candidates. Our Export Passport system classifies exporters

from level one “start-ups” to level ten multinationals.

Distributors range from one star “pioneers” to five star

“champions.” Exporters should focus on Prime Prospect

distributors that represent a good potential fit based upon

their business aspirations and investment level.

2. What Distributors Want to Know

Create a one page, fact based company profile focused on

“what distributors want to know.” Export managers fill

distributor inboxes with offers loaded with information on

product attributes, but fail to address key issues regarding

brand competitiveness for a country. What is your pricing

strategy relative to competition? How much will you invest

in promotion and media? What is a reasonable size of the prize

for the distributor?

3. Brandscaping – Credentials Makeover

Your website is the first place a potential new distributor will

check before confirming a web meeting. Has your site been

updated to reflect Covid 19 realities? Conduct a credentials

makeover of your web site, company catalog, and standard

presentation. Focus on commercial facts such as your market

share, social media campaigns, and launch model versus bland

promises on superior performance and the claim that you export

to 30 countries.

4. First Date – Casual Coﬀee

Think of your initial web meeting with a distributor as a first

date for a coffee. Do not try to overwhelm the distributor with

facts and PowerPoints. Send presentations, samples, and your

profile in advance. Devote the “first date” to telling your “brand

story” in a personal way. Share relevant local examples while

supplying a rationale why the distributor and his country

represent a good match with your ambitions.

5. Second Date – Working Lunch

What will the relationship look like if the brand and distributor

decide to work together? Export manager can share a brief

containing their objectives (size of prize), pricing, investment

model, and marketing strategy. Motivated distributors will design

a business plan and questions. These items should be shared in

advance. The second date should be devoted to talking about

the proposed plan and gaining alignment around key issues.

6. Samples – Essential

A distributor will not buy your product without tasting it. Send

samples in advance. Distributors will be compelled to accept the

virtual meeting at the very least to share local feedback on taste

preference. Include a small gift with your company logo.

7. Online Category Reviews – Local Research

Many top supermarket chains feature e-commerce web shops.

It’s simple to conduct basic overseas category reviews from the

comfort of your home office. This allows you to capture local

category dynamics in advance of your call and validate

distributor performance at leading retailers. Export Solutions’

retailer database tracks more than 2,700 retailers in 96 countries,

with one-click links to retailers web shops as available.

8. YouTube Videos Make You Stand Out

Create a fun 2-3 minute YouTube video. Show your factory,

product range review, and introduce your export team.

Demonstrate your creativity and what an energetic partner you

will be. Balance original content with professional quality.

9. Check Out Their Family

Reference checks are essential with online distributor dating.

Conduct a Google map search to see the distributor’s building.

Check out how many employees they have on Linkedin. See

their depth of product listings on local supermarket web shops.

Check with two or three of their existing suppliers. Run a Dun

and Bradstreet financial check. No company is perfect, but you

must provide extra attention to the due diligence process during

this period of uncertainty.

10. Visit Before the Wedding

Online distributor dating (or Zoomerce) can streamline the

process of new distributor screening. However, nothing replaces

the intimacy of a personal visit to the distributors country. It may

be possible to complete the preliminary “dating” steps online.

However, it may make sense to delay the wedding ceremony

until you can visit the country in person. Divorce is ugly and

costly. As with many couples in love today, it may be better idea

to delay the wedding to enjoy a longer honeymoon. Good luck!

Online Distributor Dating: 2022 Rules

When was the last time you reviewed your distributor contracts?

Fortunately, both brand owners and distributors only dedicate

time to these documents at the start of a relationship or when the

end is near. View our ten tips on handling distributor contracts.

1. Contract, Letter, or Handshake deal?

Most companies maintain a mix of these type of relationships.

This is normal, although most wish to standardize the model.

The rule of thumb is that the “more money you spend, the more

detailed the contract you need.” A simple two page letter of

understanding may be appropriate for a small business or a

handshake commitment in situations where the distributor

“buys and resells.” However, fully supported brand launches

and business management of a global brand usually requires

a detailed contract to protect both parties.

2. Sole Versus Exclusive Distributor

Most distributors demand country exclusivity. This is standard,

but may cause problems if the region is subject to inbound

shipments from global customers, e-commerce, or grey market

traders. A compromise is to offer a contract as the “sole”

distributor, providing protection from the manufacturer

appointing multiple partners in a country.

3. Distributors are Customers

At contract time, some manufacturers fail to remember that

distributors are customers, buying your product and reselling

to all local retailers. Suppliers may forward “one way” contracts

that are biased to terms favoring the manufacturer. Would you

send a contract like that to Kroger, Carrefour, or Tesco? Key is

to strike a reasonable balance favoring commercial sensibilities.

4. E-Commerce Implications

Many distributor contracts were executed before the advent

of e-commerce. Revised agreements may be necessary

incorporating e-commerce service requirements: items,

pricing, inventory, metrics, channel exclusivity.

5. Local Law Dominates

Overseas companies should have their contract reviewed by

a local law firm to guarantee compliance with local regulations.

For example, in Puerto Rico and Belgium, distributor (agent)

protection laws supercede any contract language.

6. Point of Arbitration

Normally, the brand owner automatically assigns his home

country as a point of arbitration for any disputes. In some cases,

both parties select a neutral country like Switzerland. A global

corporate counsel once taught me that ultimately any dispute

will need to be resolved in the distributor’s home country. For

example, a USA company can sue a distributor in a USA court.

It is unlikely that the distributor will hire a USA lawyer or even

show up. The USA court may enter a judgement, but the brand

owner still needs to go to the distributor’s country for enforcement.

7. Notiﬁcation of Contract Termination

Standard contracts appear for two or three years with provisions

for automatic renewal. Distributors fight for long lead times; a

loss of brand can represent a major disruption. From a brand

owner’s side, would you want a terminated employee working

for you for six months or one year? I prefer three months

notification, but that can also backfire if the distributor resigns

your business.

8. Loss of Major Principal

Sadly, I have witnessed distributor bankruptcies because they

were doing “too well.” A distributor grows the brand to a size

where the manufacturer decides to take the brand back and form

a subsidiary. The distributor scrambles, but sometimes they need

to lay off more people and causes a rapid exit of other brands.

2022 contracts should require distributors to inform you within

10 days of notification (not effective date) of any loss of principal

representing ten percent or more of their business.

9. Global/Regional Customers

Large players like Walmart, Costco, Amazon, and Carrefour can

be difficult to manage. They demand best pricing system wide or

threaten to trans ship from other locations. In some cases, these

retailers may demand to “buy direct.” In this case, you can add

an “indent” clause permitting this practice while compensating

the distributor for local services such as merchandising.

10. Late Payments & Currency Exchange Rate

A distributor that pays late signals financial difficulties. Include

a clause that allows you the option to consider the contract in

default with payment delays beyond 45 days or with frequent

problem payers. The benchmark for calculating currency

exchange rates should be specified in the contract. I have seen

cases where a distributor assigns a five to ten percent benefit in

his favor to protect against the possibility of currency swings.

10 Tips: Distributor Contracts 2022

Need more information? Visit www.exportsolutions.com.

Everyone Loves Samples – Ten Tips

Do you enjoy free samples? Everyone is delighted to try a new

product. In most cases, feedback is positive and starts the road

to a purchase and a potential customer for life. Every export

manager is proud of their product quality. However, many

companies underinvest in sampling as an essential marketing

tool. Read Export Solutions’ 10 Tips for expanding your

sampling program.

1. Trial/Snack/Travel Size

Do you offer a small size suitable for sampling? Options range

from a specific trial size to a one-use portion of your product.

Many retailers dedicate valuable cashier checkout space or travel

sections for small sizes.

2. Inﬂuencer Product Seeding

Digital influencers are critical when targeting the generation

glued to their phones. Stand out to influencers with a hand-

written note and a sample of your best product. Engage with

the influencers after sample delivery and develop a relationship

versus a one-time campaign.

3. Uber Eats & Grubhub

Online food delivery services are expected to record more

than $28 billion in sales in 2021. Companies should adapt

their Foodservice channel strategies to include sample sizes.

The format can be a portion pack condiment, mini desert treat,

or a trial size of a related product. These can be added to a

meal delivery from a high profile restaurant as a gift to their

customers and to strengthen their overall usage of your brand

“back of house.”

4. Co-Promote

Sampling may be expensive, so it’s always good to co-promote

with adjacent products. Partnerships with other brands from

a shared distributor or through a bulk mailing from your

country’s food trade promotion organization represent efficient

options. “Think about the entire plate, not just your product.”

5. Distributor Samples

Distributors serve as your local brand ambassadors. Include

ten cases of samples with every container order. Encourage

the distributor to supply a case of “car stock” to each sales

representative to share with store managers. Donate samples

to employees’ children’s sports teams to build goodwill.

6. Trial Size Shippers

Retailers love these profitable display pieces as they generate

profitable sales revenue versus a free giveaway. Normally, these

special display units contain about 30-50 units and retail for

$1 to $2 per unit with a profit margin of 50%. Shippers can be

efficient, with no listing fees, representing a simple “in and out”

trial generating promotion.

7. Subscription Boxes

Amazon offers more than 400 monthly subscription boxes.

A typical box contains samples of 5-10 products. USA examples

include Nom Nom and Try Treats for international snacks. Delta

airlines supplied me with a tasty sample box for lunch last week.

8. Embassy Sampling

Many companies’ product portfolios represents regional cuisine,

a new taste overseas but highly appreciated by local expats.

Request that your distributor drop off cases of product samples

at your overseas embassy. Sponsor national holiday events for

the expat community. Your product may even be featured at an

ambassador’s dinner!

9. Event Sponsorship

Everyone looks forward to the return of outdoor concerts and

festivals. These fun events can be impactful places to sample

beverages and indulgent products like biscuits, snacks, candy,

and ice cream.

10. Sample Truck

I love the story of a European protein bar manufacturer who

painted a truck with his brand colors. His team drove all around

town distributing samples. The truck arrived at stores, buyers’

offices, and even major trade shows. No surprise that this

manufacturer gained a loyal, youthful following with this

adventurous approach.

Be generous with your samples! Delight potential buyers

and distributors with your wide range of innovative products.

Always include a memorable gift with your company logo.

Remember that no potential new distributor will sign an

agreement with you until their team has tried your product

and given it the “thumbs up.”

Introducing

America’s Favorite Brands

Executive Board

Export Solutions Smucker’s Tabasco

Greg Seminara, CEO Danny Berrios, President Megan Lopez, Vice-President

General Mills Sun-Maid

Eric Saint-Marc Carsten Tietjen

Advisory Board

Bazooka Candy Blue Diamond Bob’s Red Mill

Santiago Ricaurte Dale Tipple Jan Chernus

Bush Beans Campbells Church & Dwight

Dave Bauman Julio Gomez Arun Hiranandani

Ferarra Candy Heartland Idahoan

Daniel Michelena Tom Theobald Ryan Ellis

Johnsonville Sausage Kao USA Keurig Dr. Pepper

Cory Bouck Julie Toole Billy Menendez

Mizkan Reynolds Welch’s

Noel David Chris Corey Marc Rosen

19 Companies | 200+ Top Brands | $80 Billion Combined

View our activities for export managers – www.usafoodexport.com

How much do you pay for a display or special promotion

at your top customer? Retailers from Argentina to Vietnam

capture manufacturers’ promotion money to drive sales and

profits. Brand development and market share are frequently

proportional to investment level. In the world of export, you

must “pay to play.” However, different models exist to fund

trade activities. Leading distributors confirm that they work

with a variety of different structures. “It’s all money” and the

key question remains: under which cost line do you want this

investment to sit in your price calculation?

Manufacturer Funded Promotion Budget

The classic approach is for the brand owner to develop a joint

business promotion plan with the distributor. A spending budget

is developed, funded 100% by the manufacturer. The overseas

distributor pays the local retailer and sends a billback to the

producer, with proof of performance. The rationale for this

practice is that the supplier owns the brand equity and can

change distributors. Distributors are reluctant to invest their

own margin into another companies brand.

Split Fund – “Skin in the Game”

In some cases, the brand owner and distributor split the

marketing plan costs, usually “50-50.” A further variation

exists where the brand owner covers the cost of consumer

marketing and the distributor pays for the periodic trade

promotion discounts. The philosophy is that the distributor

will benefit from higher sales and will also be motivated to

execute successful promotions if their own money is invested.

This structure appears most frequently with an existing brand,

with a minimum three year history of shipments. In reality, the

distributor calculates the expected investment and builds it into

his cost structure. A “50-50” shared model will usually not be

accepted with a new brand pioneered for the first time.

Best Price – Dead Net

Dead net pricing is the third model. In this scenario, a

manufacturer provides a distributor with his very best

price. The distributor builds in all promotional support and

his margin into his calculation. In this case, the manufacturer

does not receive a constant stream of requests for more

promotion funding. However, the brand may lose control

of their pricing model or be under supported if the distributor

fails to promote at adequate levels.

10% of Sales – $1/Case

Another common model is for a manufacturer to establish a fixed

funding rate per case sold which the distributor invests to build

the brand. Normal funding begins at 10% of case cost, but can

accelerate to 20% or more for a competitive category. Some

manufacturers offer a flat rate per case or amount per container.

As mentioned before, it ultimately converts to a pile of money

to invest in brand building. This approach functions best with

a brand with a current sales history, as percentages don’t mean

much when the brand has zero sales.

Listing Fees

These one time payments are primarily covered by the brand

owner as part of upfront launch costs. Sometimes these fees can

be rolled into introductory promotions, spread out over twelve

months, or paid via free goods. Please check out Export

Solutions’ article Ten Tips: How to Minimize Listing Fee Payments

for more ideas on how to reduce these payments.

Most Eﬀective Promotion Vehicles

Every key account manager should know the best promotion

vehicles to drive incremental sales at their customer. At some

supermarkets, promotional leaflets drive tonnage. At others,

deep discounts (30% +) or displays are winners. Distributor

sales teams are market experts and can source best practices

from their other brands.

Post Promotion Analysis

Tools are available to measure promotion effectiveness. These

evaluate sales lift, boost in baseline consumption, and cost per

incremental case. A good idea is to analyze mutiple scenarios

such as different price points, seasonality, and display support.

Creativity Counts

Many of the best trade promotion success stories involve

field activated promotions. This allows a brand to break

through the clutter of too many “me too” events. The sales

team maintains ownership and enthusiasm to drive support.

Another positive strategy is aligning with a retailer’s favorite

charity to contribute to the community while building your

brand. Manufacturers must avoid the dull routine of repetitive

15% trade promotions. Boring!

Key Issue – Distributor Underspends

Distributors are businesses, aimed at achieving a fair profit, just

like your company. A risk occurs whenever distributors claim

responsibility for managing the trade discount plan for their

country. At times, these trade discounts can be under spent

versus category and brand requirements. For example: when a

distributor says that he will fund four promotions per year, does

that mean at a 10% level or 30% level? Will the distributor funded

promotions be for all channels and retailers or just a few

customers? How do you know?

Compliance and Audit

Most distributor contracts include provisions for audit of trade

promotion payments. Larger suppliers include trade promotion

payment software. Good practices are complex and require piles

of paperwork. A core message is that the “distributor respects

what the manufacturer inspects.”

Export Trade Promotion Funding

Searching for New Distributors?

Export Solutions makes life a little easier for more than 3,000 export managers.

Our time saving distributor database serves as a “helper” for identifying more

than 9,200 qualified, local brand builders in 96 countries.

“Select Your Distributors,

Not Let Your Distributors Select You”

www.exportsolutions.com

Local Experts

Distributor Coverage

Asia: 2,030

Europe: 3,139

Latin America: 1,574

Middle East: 937

USA/Canada: 1,464

Category Experts

Distributor Coverage

Beverage: 1,691

Candy/Snack: 2,713

International Food: 3,276

Health & Beauty: 1,800

Natural Food: 837

Country Experts

Distributor Coverage

German Brands: 648

Italian Brands: 1,397

UK Brands: 682

USA Brands: 1,189

Search by Country, Category, or Country of Origin

Coverage: 96 countries and 2,700 retailers

Supermarket

Convenience

Drug Store

Natural Food

Club, Cash & Carry

Supplying profiles, store counts, formats,

news and info for Top 100 international

retailers plus all overseas branches

Example 1: Who are supermarket

retailers in Canada?

Example 2: How many stores does Loblaws

operate by banner, in Canada?

NEW!

ORDER NOW!

Search by Retailer NameSearch by Country

Combo Search

www.exportsolutions.com

Search By Format

Retailer Search Made Simple

Canada Example

Why did you create the retailer database?

Export managers dedicate a lot of time

to researching countries, retailers and

preparing business plans. A standard KPI

measure is tracking product listings for

key customers. I believe that our industry

could benefit from a global retailer

database to instantly locate retailers

and their store counts in 96 countries.

The retailer database is a logical extension

of our leading distributor database which

has helped more than 3,000 companies

build export sales during the last 10 years.

What is your geographic coverage?

96 of top 100 GDP countries worldwide.

This includes most Asian, Middle Eastern,

and European countries. Our database

covers every country in the Americas.

In Africa, we cover South Africa.

What is your format coverage?

Excellent coverage of chain supermarkets,

hypermarkets, clubs, cash and carry, and

convenience formats. Solid initial coverage

of drug stores, natural food stores, and

e-commerce channels. Our database does

not cover DIY/hardware, toy, office,

liquor, or sporting goods channels.

Retailer database: featured info

Profile – Retailers profile and link to their

internet home page.

Formats – Retailer’s stores segmented

by format and banner.

We track supermarkets, hypermarkets,

cash and carry, convenience stores,

discounters, drug stores, natural food

stores, and e-commerce retailers.

News – Latest retailers’ news. In some

cases (Asia), we substitute a link to the

retailer’s latest promotional flyer.

Financial – Many leading retailers are

publicly traded. A link is provided to

their latest financial results. We do not

offer estimated financial information for

privately held or family owned retailers.

How is your coverage of global retailers?

We offer total coverage for top 100 global

retailers. This includes all of their

branches and banners. Searchable!

Use filters to research Walmart, Costco,

Carrefour, Tesco, Metro, Casino presence

by country. Database covers retailer’s

total store outlets as well as a breakout

by banner and format.

What can I use the retailer database info for?

• Obtain an instant snapshot of an

average of 24 retailers per country for

96 countries.

• Track presence of global retailers like

Walmart, Carrefour, and Metro AG.

• Create country specific listing maps

where distributors measure brand

authorization by retailer.

• Conduct home office based

international category reviews

and price checks from retailers’

e-commerce sites (not all retailers).

• Prepare annual reviews and reports

with up-to-date information on leading

retailers and channels.

Searchable

The database offers filters allowing you to

search by country, format, or retailer name.

You can also use a combination of filters for

your research.

Can I get a free sample of the retailer database?

Sure! Check www.exportsolutions.com for a

complete profile of United Kingdom retailers.

Do you provide retailer’s annual sales

or market share information?

Accurate annual sales information is

available through the financial link for

publicly traded companies. We do not

provide estimated financial information

for privately held and family owned

retailers. Channel blurring occurs between

supermarket, convenience, e-commerce,

and even natural food operators. We do

not provide market share due to difficulty

to accurately isolate and define channel

market share information, particularly

with so many privately held retailers.

How accurate is the retailer data?

Export Solutions’ retailer database is

updated weekly, so information is highly

accurate. Retailer names, web sites, and

formats rarely change. This makes the

database 99% accurate at the company

level. New stores open every day,

resulting in store counts that may be

95% accurate. We intend to update store

counts on a regular basis.

How much does retailer database access cost?

An annual subscription to the retailer

database is $975. This supplies one year,

unlimited access to more than 2,700

retailers in 96 countries. Special offers

available for our distributor database

customers. Note: special pricing for

government trade organizations.

How do I access the retailer database?

Visit www.exportsolutions.com and click

the retailer database page. You can place

a subscription or individual continent

(i.e., Europe) into a shopping cart.

The process takes two minutes and we

automatically send you an invoice.

About Export Solutions

Export Solutions was founded in 2004

and is based in Atlanta, Georgia in the

USA. Export Solutions serves as a leading

provider of business intelligence to the

food and consumer goods industries.

Our distributor database covers 9,200

distributors in 96 countries and has

been used by more than 3,000 clients.

Our Export Express newsletter has a

circulation of 9,900 and is viewed as an

important source of insights, strategies,

and templates for international

development. www.exportsolutions.com.

FAQ’s – Retailer Database

All your distributors express enthusiasm

and commitment for your brand. True

passion for your partnership is measured

by what distributors do, not by what they

say. Listed below are ten tips to consider

when measuring Distributor enthusiasm

for your brand.

1. CEO Commitment and Involvement

The CEO steers the distributor ship

and sets the tone for your business

relationship. Best in Class Distributor

CEO’s reach out via phone to touch base

periodically and spend time with you

when you are in town. They keep up

to date on your priorities and key issues

and ensure that his team is delivering

good service and results.

2. Responsiveness to Problems

Urgent situations erupt in every market.

Currency devaluations, product recalls, or

missed budget numbers require immediate

attention. What is the distributor response

time? Does the distributor share your sense

of urgency? How long does it take to get

problems fixed?

3. Customer Introductions

Most distributors maintain good

relationships with leading retailers.

Enthusiastic distributors are happy to

introduce you to the leadership of their

customers. These distributors will use

their personal relationships and “favors”

to benefit your brand.

4. Best People Assigned to Your Brand

The distributor functions as a team.

Every team has superstars and

developing players. How does the

distributor allocate “talent?” Are the

stars working on your business?

5. Web Site Prominence

A Distributor’s web site offers important

clues to distributor professionalism,

services, and core brands. How

prominently is your brand featured on

the distributors web site? Is a case study

using your brand results mentioned?

Is your brand logo listed at the top of

the page or buried at the bottom?

6. Distributor Visits to Your Headquarters

How often does the distributor travel

to your headquarters or factory? Does

the distributor have a relationship with

your CEO, vice president of international,

or other leaders? Many distributors are

interested in visiting companies based

in San Francisco or London, but true

enthusiasm accompanies meetings in

Chicago or Hamburg during the winter!

7. Creative Ideas

Distributors can be magicians at

developing “new ways to solve old

problems.” Good distributors bring

innovative ideas to adapt your plan

and funding budget to the local market.

How often does your distributor apply

their brilliant new idea to your brand?

8. Distributor Awards and References

Successful distributors proudly display

their awards in conference rooms and

lobbies. Is your award visible? I always ask

distributors for references from other brand

owners. Does the distributor use your

name as a reference or request a testimonial

from you on their performance?

9. Love Your Brand

I have written an entire article on

getting a Distributor to Love your

Brand. There are many ways to feel

the love. Does the distributor sales team

wear the shirts with your brand logo or

use the pens that you handed out at the

last sales meeting? Is the distributor

able to secure a customer meeting for

you on one week lead time? Are they

happy to see you arrive or just to see

you depart?

10. Exceed Expectations Everyday

The most enthusiastic distributors

exceed your expectations everyday.

This includes shipment results in excess

of overall market growth and total

organizational support behind your

new product introductions. Enthusiasm

is not measured in words and weeks,

but in actions carried out over many

years by a Best in Class partner.

Ten Tips: Measuring Distributor Enthusiasm for Your Brand

Need a hand? Visit www.exportsolutions.com.

Distributor Search Helper for:

Your

Logo

Here

Can We Help You?

Recent Distributor Search Projects

Asia Europe Middle East Latin America

Australia Germany Israel Argentina

China Ireland Kuwait Brazil

Indonesia Netherlands Qatar Colombia

Japan Nordics Saudi Arabia Costa Rica

Malaysia Spain UAE Ecuador

Philippines United Kingdom North America Mexico

Singapore Africa Canada Panama

South Korea South Africa United States Peru

Call the Export Accelerator!

Contact Greg Seminara at greg@exportsolutions.com

to discuss your business development project.

www.exportsolutions.com

You can usually spot an export manager in the fast track lane at

airport security with the diamond level frequent flyer card and

bulging passport. Many of us spend half of our business lives on

the road, serving as roving brand ambassadors for the companies

that we represent. Our friends envy this glamorous life, little do

they know how punishing it is to take red-eye flights and eat

mediocre airport food. While this lifestyle appears as normal for

most of us, it makes sense to review some fundamental ideas on

how to obtain the most productivity from our companies’

investment in our business travel.

1. Deﬁne Purpose for Each Market Visit

Export Solutions identifies seven management roles for

a market visit:

Doctor: visiting to handle a problem

Architect: design new plan for achieving objectives

Coach: trip to teach distributor about your brand

Babysitter: follow up on key priorities

Gardener: cultivate new business and relationships

Fan: cheer good distributor on to great results

Tourist: we enjoy the country

In reality, a productive visit encompasses parts of all

of the above roles.

2. Schedule: Minimum Six Weeks Lead Time

Organize your visit with six to eight weeks lead time. This

guarantees that all key people will be available during your

visit. It also reminds your distributor that you are coming

soon and there is time to fix problems before your arrival.

3. Agenda and Analysis

Send market visit agenda four

weeks in advance. Review progress

versus key initiatives and annual

objectives. Obtain updated “Listing

Maps,” schematics, pricing, and

merchandising plans. Analyze

syndicated data (Nielsen), shipment

trends, and marketing spending.

What has been achieved since

your last visit?

4. Serve as Category Expert

Distributors appreciate brand owners

that share category expertise. What

are the global and regional trends

for your category? Any product

innovation from your company or

competition? Are there success stories

from other markets or common

retailers that you can share?

5. Store Checks: First Priority

I am a big advocate of checking stores

as soon as I get to the market, before

formal office meetings. This allows

me to capture the rhythm of the

market, category and my own brand

performance in advance of philosophical meetings that may

ignore “Retail Reality.” Request that the retail sales manager

accompany you to secure his “pulse” of the market. Visit stores in

different parts of town. Always use the retailer’s schematic as the

“official” record. Beware of stores that look “too good to be true.”

6. Build Relationships with Entire Team

Frequently our visit is concentrated on meetings with the brand

manager and a 15 minute chat with the distributor CEO. Visit

the distributor’s warehouse at least once per year. Actual

warehouse inventory supplies an accurate snapshot of their

entire business. Schedule time with the finance manager. Better

to get to know him in advance of the inevitable problem. Treat

the administrative team to a casual lunch to say thanks. We know

who keeps the ship running! Invite the Distributor owner or MD

to dinner. The best business insights are obtained after 9:00 pm.

7. Customer Visits

Schedule an annual business review or participate in a new

product launch to serve as a category “expert.” Volunteer to

try to solve problems, but avoid situations where the buyer

tries to extort money from you. Meet with other people at

the retailer beyond your buyer. Most retailers have Marketing,

Merchandising, Internet Sales, and Supply Chain managers

interested in sharing insights with overseas suppliers.

8. Brainstorm New Ideas

Allocate some time to think about new ways to achieve your

business results. Too many times we get in the repetitive rut

of offering the same programs year after year. What ideas have

worked in other markets or for other brands that the distributor

represents? Co-promotion ideas?

Charity tie in? How can we generate

positive social media buzz?

9. Getting a Distributor to Love Your Brand

See page 7 for an article dedicated

to this goal. Each market visit is a

valuable opportunity to cultivate a

powerful relationship. We want the

distributor to maintain our priorities

as “top of mind” after we are dropped

off at the airport to return home.

10. Trip Report – Thanks

The best trip reports are the ones

that are written on the plane ride

home when all issues are still fresh.

Say thanks and send a balanced

report of achievements and

opportunities. Remember that all

accomplishments and problems are

a joint responsibility of both the brand

owner and distributor. A detailed

report with clear and measurable next

steps serves as the official benchmark

for your next trip!

See you in the airport!

Ten Tips: Improving Market Visit Productivity

1. Quarterly MBO Meeting

with Distributor Senior Management

One of the most effective tools

for increased focus is to create a

regular process for Distributor senior

management engagement in your

business. The Management By Objective

(MBO) system (or similar approaches)

allows you to meet quarterly on a pre-

planned schedule to review past quarter

performance on key initiatives and firm

up plans and commitment for the new

quarter. Discussions should focus on key

business metrics and account specific

results. Meetings can be held via

teleconference if you can not visit

personally 4 times per year.

2. International Distributor

Network Conference

This can include all your global

distributors or those from a specific

continent/region. Program can be 1-2 days

in length and can include Corporate

Business Review, New Product Roll-Out,

and requirement that each distributor give

a presentation on a success story from their

home market. Meeting location can tie in

with a major trade fair such as SIAL or

FMI to reduce expenses. Alternatively,

the meeting can also be in a resort location

to serve as an incentive. Export Solutions

is available as a conference meeting

speaker to discuss a variety of distributor

optimization strategies and retail trends.

3. Sales Contests

Sales contests bring energy, excitement,

and focus to your brands. Sales contests

should be about six weeks in duration

and offer the opportunity for “everyone”

to win. Prizes can range from cash

incentives to trips to merchandise for

the winners. Sync contest objectives and

measures to your key initiatives for your

peak season or a new product launch.

4. Key Account Business Reviews

It is appropriate to conduct key

account business reviews with each of

the distributor’s top 3-5 accounts once per

year. Meetings should include senior level

management of the retailer. This strategy

requires distributor analysis of the

accounts business and opportunities for

mutual growth. This also provides you

with an avenue to develop a personal

relationship with local customers.

5. Retail Audit

Retail execution is critical to the success

of any brand initiative. An important

element in a new product launch or

preparation for your peak selling season

is the pre-scheduled Retail Audit across

a market. The Manufacturer would bring

2 or 3 people from their company and

match them with distributor personnel

for a day in the field checking retail

conditions. In one day, the 2-3 teams

can see 30-50 stores in the market to judge

the markets “readiness” and progress.

Distributor personnel are competitive and

will work hard to make the market “look

good” for the Retail Audit.

6. Plant Visit

Invite your distributors for a plant

visit and/or a trip to your corporate

headquarters. Distributor can be

introduced to members of your senior

management team. Distributors should

be encouraged to bring a large customer

as well. This type of trip can serve as

a “bonding” experience and create

a renewed sense of commitment to

your business.

7. Bonus Payment

Incentive pay for performance usually

works well with sales teams. Sync

bonus with your key objectives. Reward

performance on achievement of retail

distribution, profitability, as well as sales

volume objectives. Volume based objectives

alone may encourage questionable

shipments that could be diverted.

8. Distributor Sales Meeting Participation

Most distributors schedule monthly or

quarterly meetings for their entire sales

team. This is a primary format for the

distributor to communicate direction and

priorities. Most distributors allow their

manufacturers to make a presentation on

a new item or key sales drive. Supplement

your meeting presentation with a small

gift for all meeting participants such as

a pen, key chain, or calculator with your

company logo.

9. CEO Market Visit

Distributors appreciate a visit from your

CEO or other member of your senior

management team (CFO, VP International

etc.). This gives them the opportunity to

demonstrate their results and share their

input on the markets development. It is

magical to watch certain market issues

get “solved” immediately prior to a senior

management visit!

10. Share Best Practices

Create a process for sharing best practices

and success stories within your global

distributor network. These can be

communicated via a monthly newsletter

or email. Distributors are proud to share

their achievements or innovative new

strategies that they are using to build

their business. Manufacturers may elect

to reward distributors with the “best

success story” each month with a “free

dinner” or other incentive.

Ten Tips – Increased Distributor Focus on Your Brands

Export Workshops & Speeches

by Greg Seminara

Export Workshops & Speeches

by Greg Seminara

Export Workshop Overview

• On-site and web options available

• 8 Export Development & Distributor Management Modules

• Includes 25 Common Export Problems group work

• 200+ topics available for tailored workshop

• One hour keynote or motivational speech

Contact Greg Seminara for

more details and references:

gseminara@exportsolutions.com.

Buyers: New Product Assessment

High Interest Low Interest

Category Opportunity Large or high growth Declining or niche

Brand Owner

Multinational or proven local.

Category expert

New foreign supplier

or start-up

Innovation

Something new, supported

by consumer research

“Me too” product

Proﬁt Margin

Enhance current

category margin

Equal to or less than

current category margin

Sales Generates incremental sales Cannibalizes existing sales

Marketing Investment Sampling, social media, PR None

Trade Programs Invests in retailer “push” programs Periodic discounts/rebates

Brand Track Record Successful at other local retailers Unproven in the country

Terms/Conditions Attractive deal structure Typical terms/conditions

Representation Dependable local distributor Small, niche entrepreneur

Retail buyers are challenged to maximize profits and sales from every available inch of shelf space. Every new item accepted must

improve on the performance of the brand currently occupying that space. Buyers are overwhelmed by new product offerings, all with

ambitious promises. Improve your chances of success by incorporating Export Solutions’ 10 point check list on how to excite your

category buyer about your new product.

How to Excite Buyers – New Product Checklist

1. Respect For Their Right

to Make a Reasonable Proﬁt

Distributors have profit targets just like

manufacturers do. Distributors measure

total supplier contribution, defined by

sales multiplied by gross margin. How

much value do you receive from your

distributors relative to your contribution

to their profits?

2. Investment in Brand Support

Distributors love companies that

invest in above the line activities

such as television advertising, radio,

social media, print, and sampling.

Distributor volume is proportional

to your investment in brand support

activities. More marketing dollars

usually translates to greater sales

and profits for the distributor.

3. Awards

Most distributors proudly display

their Distributor of the Year awards in

their office lobby or executive conference

room. Recognition can be given for

distributor of the year, or achievement

of $1 million in sales, most improved

store conditions, or ten years of service.

4. Market Visits (But Not Too Often)

Periodic market visits allow you to

share ideas, monitor progress, and

discuss issues. These trips serve as

motivational, relationship building

events, particularly if you can spend

time together “out of the office.”

5. Endorsement of Local Marketing Events

Best in Class partners maintain the ability

to create unique local programs to build

your brand. Voting with your marketing

dollars stimulates the team to deliver and

continue to bring you their best ideas.

6. Trip Contests – Quota Makers Club

Many believe that achieving your annual

target is a job standard. This is true, but

watch distributors ship cases like crazy

when trying to qualify for a trip to a

resort location! Plus, the trip generates

incredible goodwill and all vow to meet

their objective to return “next year.”

7. Market Research

Distributors aspire to appear as category

experts. Access to syndicated data

from Nielsen plus local consumer

research allows them to distinguish

themselves from other vendors armed

with hollow words and broad claims on

a PowerPoint presentation.

8. Invitation to Your Corporate Headquarters

A trip to the USA or Europe is a dream

come true for distributor brand managers

in emerging markets. Treat them like a

VIP, and they will be loyal forever.

9. Lunch for the Support Staﬀ

Order processing, customer service,

and other administrative people form

the hidden backbone of the distributors

team. Buy the group lunch and you can

be a hero for $100-$200. Guess whose

orders will be handled first at the end

of a quarter?

10. Letter of Thanks

Our industry depends on email

too much. How do you communicate

sincere thanks when someone receives

200 emails a day? Send a personal

letter via the post office recognizing a

successful new product launch, creative

promotion,or above and beyond effort.

Extra points provided for a handwritten

note! These letters are treasured forever.

Ten Things That Distributors Like

Talk to an Expert

• Find Distributors in 96 Countries

• International Strategy Road Map

• Fix Problem Markets

• Next Level Sales Management

• Export Workshops

• Motivational Meeting Speaker

Contact Greg Seminara at (001)-404-255-8387 to

discuss your business development project.

www.exportsolutions.com

1. Unrealistic Expectations

Category growth ranges from 1% to 5%

in most Western countries. So how can

a manufacturer demand a 10% increase

in sales in a mature market? It’s possible

if the brand plans a major increase in

marketing spending. However, normally,

business growth parallels overall

market conditions.

2. Direct Contact With Their Assigned Retailers

Tricky retailers attempt to bypass a

distributor by contacting the brand

owner. Normally, the retailer has his

hand out for more money or wants to

“buy direct.” Be polite, but ask the buyer

to work with the distributor or schedule

a joint meeting for your next visit.

3. Cut Marketing Budgets

Leading distributors depend on joint

business plans, often created up to

one year in advance. Last minute

squeezes, translating to budget cutbacks

sometimes need to happen, but still hurt.

The distributor is left with delivering the

bad news and also hitting the sales target,

even with reduced support.

4. Short Shipments

Everyone loses due to short shipments.

Distributors could be assessed penalties

by retailers. Store level shelf space may

be lost and need to be recaptured. Keep

the pipeline filled, particularly during

peak seasonality.

5. Price Increases

Rising raw material input costs may

require adjustments in list prices. The

reality is that price increases are brutal to

implement in many countries. Eventually,

they are incorporated after months of

stand-off’s. In many cases, distributors

are forced to accept the price increase

from the brand, but are forced to swallow

the increase until they can negotiate with

the retailers.

6. Endless Reporting

Some brands are guilty of a constant

stream of reporting requests that take

time to complete. Ask: Is the report

really necessary? Legitimate requests are

forecasts, shipment results, major retailer

listing maps, price surveys, and new

product launch status updates.

7. Frequent Market Visits

Your partners require time to accomplish

their objectives without constant

oversight. Distributors appreciate short,

productive visits on a quarterly basis.

More frequently for a big company

and less often for a small brand. Get in,

conduct your business and off to the next

country. Week long visits to small markets

represent a distraction.

8. Margin Reductions

Distributors depend on their margin to

cover fixed overheads like logistics and

cost of their sales team. Often, their net

margin is only 3-5% or lower. Margin

reductions or increased costs challenge

their ability to operate a financially

healthy business.

9. Last Minute Requests

End of the year volume pushes and

rush orders are part of the business.

However, everything functions better

when normal lead times are respected.

Separate “must do” demands from

“nice to have” requests.

10. Delayed Response to Local Ideas

Manufacturers encourage distributors

to create unique local approaches to

brand building. Retailer buyers also

call their favorite distributors with short

term promotional opportunities to

participate in a special event. Distributors

need quick decisions on your ability to

support their idea. Few things are more

frustrating for a distributor than a

lengthy wait while their proposal is

debated by numerous levels of your

company management.

Ten Things Distributors Don’t Like

Need a hand? Visit www.exportsolutions.com.

Everyone loves a trade show.

Where else can you rent a booth

and witness lines of customers

and distributors waiting to see

you to talk about your brands?

Trade shows represent sizable

investments and valuable booth

time can be wasted with non-

productive meetings.

Read our Ten Tips to maximize

your trade show productivity.

1. Create Sign:

Distributors/Customers Wanted

List countries where you are

searching for a distributor or

retailer partner. This serves as

an invitation to distributors from

those countries to stop by. This

strategy also acts as a deterrent

to discourage distributors from

visiting from countries where

you already have a partner or

maintain limited interest.

2. Use Export Solutions Database

to Pre-Screen Distributors

Over 3,000 companies have used our proprietary database

to find qualified distributors. Quickly. A common technique

is for distributors to list the countries where they hope to expand

one month in advance of a major trade show. They then use the

Export Solutions’ database to pre-screen candidates and identify

the five candidates per country with the highest potential.

Then, they email these distributors in advance of the trade fair

to request a meeting. This approach works better than sitting

at your booth with a “hope and wait” strategy to meet

qualified distributors.

3. Create a Template to Recap Capabilities of Potential Distributors

Request that prospective distributors complete the template

in advance of a meeting. Think of the template as a distributor

CV or resume. How long has the distributor candidate been in

business, sales, employees, key brands, length of service for key

brands, and most importantly references from other brand

owners and in country retailers.

4. Prepare a One Page Recap of your Company Credentials

This should include product “beauty shot,” current export

countries, and unique product characteristics. List export

manager contacts and a photo on the back with a space for

notes. Professionally print this on a one glossy page handout.

This will serve as an important reminder for the meeting when

the retailer or distributor returns home with hundreds of

business cards.

5. Participate in Show Sponsored Matchmaking Events

Most trade fairs organize matchmaking events. The formats

can vary, but basically they can arrange meetings with interested

buyers or distributors. As always there is a mix of good meetings

and bad, but the approach is worth consideration.

6. Take Photos of Potential Distributor Candidates

First take a picture of the distributors business card. Then take

a photo of the potential new distributor. After hundreds of short

meetings, this will help you remember the candidate once you

begin serious due diligence after the trade show.

7. Bring at least 500 Business Cards

I am serious. We have all run out of cards at a trade show. Better

yet, bring 1000 business cards.

8. Schedule a Group Event for Current Distributors

This event is an efficient way to launch a new product or

announce “Distributor of the Year.” You must schedule the event

before or after show opening times. Best bet is a breakfast or a

dinner, if you schedule it four months in advance to avoid

conflicts with other events.

9. Get to the Show Early and Leave Late

As a trade show visitor, it is normally much easier to reach senior

decision makers of a supplier before 10:00 am or after 4:00 pm.

They are often less distracted and have more time to spend with

you. Similarly, Brand Owners are always more accessible on

Sunday of a trade show or the last day. Normally, the retail

buyers don’t attend trade shows on the weekends or “last day”

of the trade show.

10. Create a Trade Show Exhibit Planner

Trade Shows post a listing of all exhibitors on their web site

in advance of the show. Many also have a routing software that

will allow you to add exhibitors of interest to your private list and

plot a route based upon your selected exhibitors. Exhibitors that

maximize trade shows schedule most of their meetings in advance.

Ten Tips – Maximizing Trade Show Productivity

Retail stores serve as showcases for our products. This is

the point of sale where inventory is translated to a consumer

purchase. However, many manufacturers spend the bulk of

their energy against securing the headquarter listings, chasing

shipments, while store conditions flounder at the middle of

the priority list.

Increased focus on in-store conditions is critical because it

delivers benefits every single day. Listed below are Export

Solutions’ tips for winning the battle at the retail shelf.

1. Deﬁne and Publicize Your Shelf Objectives

The first step is to insure that each member of your sales team

is “crystal clear” on your brands in-store objectives. Create a

shelf conditions standards book, including photos that can be

distributed or shared online. I’ll always remember a store visit

in Cordoba, Argentina when I was a manager for Clorox. The

distributor representative proudly brought me to his “best” store.

The store was not bad, but below objective because our brand

only owned 50% of shelf space versus our 65% market share.

When I mentioned my disappointment, the representative

accurately claimed that “no one had ever shared” this shelf

objective with him before.

2. Create an Objective Mechanism to Evaluate Every Store

How did your brand look in the last store visited? Was it

an “A,B,C, D, E, or an F?” Why? Establishment of a grading

system allows you to provide an objective report card for each

store. Normally, a system of awarding points for share of shelf

space, retail availability, and off-shelf merchandising is simple

to execute.

3. Focus on Basics: Distribution, Availability, Shelf Space,

Shelf Position, and Oﬀ-Shelf Merchandising

All authorized brand sizes should be tagged and in stock. Brand

should maintain share of category space equivalent to or greater

than market share and placed next to the targeted competitor.

Incremental points should be awarded for off-shelf displays or

secondary locations. Fair pricing is also important, but normally

tightly controlled by central buying.

4. Establish a Baseline for Store Conditions

Introducing new store conditions tracking metrics can be a

shock to your retail sales team, as existing conditions are likely

far below minimum acceptable standards. The idea is to create

a baseline of performance and measure monthly or quarterly

progress towards objective.

5. A Market Wide Retail Audit Creates an Accurate Benchmark

This requires the participation of 2-4 people (depending on

market size) from your company matched by an equivalent

number of people from your distributor/retail sales team. Each

two person team is committed to spend a full day at retail and

is assigned a certain city or section of town. Teams can usually

visit 10-15 stores per day giving you a broad spectrum of results

across the market. Each store should be measured by the same

criteria. Ideally, the entire group should meet at the end of the

day to share observations and next steps. Audits can be tied into

a major sales drive such as a new item rollout, peak seasonality,

etc. A good distributor will work hard to fix problems in advance

of a previously scheduled market wide retail audit.

6. Sponsor a Retail Sales Contest

This retail contest can be tied to the launch of new retail sales

objectives or a “grading” system. Structure the contest for

maximum number of winners. Reward most improved from

a pre-contest baseline. Contest should be one-two months in

duration to optimize excitement and focus. Get creative with a

theme such as “A Room with a View” with first prize being an

overnight stay at a 5 star hotel room with a view for the sales

representatives stores have the best “view” for your brand.

7. Retailers Schematic/Planogram Serves as the Oﬃcial Record

Request that each distributor forward the planogram for each

of the 2-4 largest retailers for each market. Reward key account

sales people for implementing changes in the official planogram.

8. Provide at Least One Shelf Objective for Every Month

A monthly objective for your brand or company forces the retail

team to look at your brand on every store visit. The objective

can be oriented against moving your brand to an eye level shelf,

improved shelf space allocation for a particular size/flavor, or

against reduced out of stocks. Track the objective with a question

that can be answered by “yes/no” or a numeric response. This

will allow you to participate with software on handheld retail

reporting devices.

9. Focus Against Accounts With Problems With Retail Execution

My experience tells me that some retailers are better at

maintaining attractive category showcases and in stock conditions.

Other high volume hypermarkets are plagued by frequent “wiped

out” categories. Certain accounts prevent representatives from

touching the shelf due to union policy. Persistent out of stocks

may reflect insufficient shelf space, low warehouse inventory,

or problems with automatic replenishment systems.

10. Visit Stores on Every Trip to the Market

Schedule time to work with the retail sales manager. Your

attention to store conditions will linger after your plane departs.

“Retail is detail” and the “distributor respects what the brand

owner inspects” are well known comments on retail. Send a

signal that you are focused on your retail showcase and watch

your brand presence improve!

Ten Tips – Winning the Battle for Retail Shelf Space

There are 196 countries in the world.

How many is your company selling to?

International expansion to new countries

is a strategic imperative for most

exporters. The challenge is to determine

which countries will deliver the greatest

financial return for your investment of

time and resources. Listed below are

some practical considerations for

determining where to sell next.

Determine Category Size: Data exists

to allow you to capture the size of your

category in target countries. Syndicated

data suppliers such as A.C. Nielsen

and Euromonitor sell category sales

information and trends. Government

agencies track sales for core categories

impacting their local producers. Category

size may be estimated by sourcing the

information from a friendly retailer and

projecting country level sales based upon

that retailer’s market share.

Population: Just One Factor: A logical

conclusion would translate that large

countries like China and India would

represent the greatest opportunity.

Population levels are relevant, but not

the only factor. A classic case study is the

story of Brazil and Puerto Rico. Most USA

based consumer goods manufacturers

sell more product to Puerto Rico, a

commonwealth of 3.3 million people than

to Brazil, a country of 216 million people.

GDP: Follow the Money: Per capita,

gross domestic product (GDP) is an

important consideration. International

exporters are known for marketing

premium, value-added brands. The

higher the countries purchasing power,

the more likely that middle income

citizen’s can afford our brands. This

appears as one reason that European

markets such as Germany, France, Italy,

& the United Kingdom may create a

larger opportunity than countries such

as Pakistan, Indonesia, or Bangladesh

that have far more people.

Growth Rates: Think to the Future:

Export development often represents

an investment for the long term. Your

country prioritization analysis should

look at population and GDP growth

rates. I worked in Saudi Arabia in the

early 90’s when the population was

around 14 million, but growing at 8%.

Today, Saudi Arabia’s population is more

than 36 million. Which countries will be

the largest in 2025 versus 2022?

Proximity to Manufacturing Plants:

Transportation costs contribute one of

the largest line items in your pricing

calculation. Logically, shipping to a

neighboring country is likely to cost

less than shipping half way across to the

world. Citizens of adjacent countries have

probably visited your country and may

have seen your brand or a commercial for

it. Canada occupies the northern border

of the USA and is the single largest export

market for USA consumer goods

manufacturers ( and vice versa).

Extend Current Retailer/Distributor

Partnerships: Global retailers such as

Carrefour, Metro, Walmart, and Tesco

operate in many countries (and continents.)

Asian and Europe feature regional

distributors. Your brand has established

a track record with these leading players.

Your company is already proficient at

working with their operating models.

Leverage these relationships to enter

new markets. Warning: this can be a risky

strategy when you base your plan on a

large global retailer that happens to have

a small presence in your target market.

Examples: Aldi-USA, Whole-Foods UK,

or Walmart-Argentina.

Cost to Enter: There is a cost of doing

business in each market. Markets such as

Italy and Hong Kong maintain notoriously

high cost of entry into the supermarket

channel. Latin American/Asian markets

require investment, but at more modest

levels relative to Europe or the USA.

Market Complexity: How difficult will it

be to enter the market? Certain markets

are consolidated with a few major retailers

and many qualified distributors. Other

markets are complicated, with multiple

trade channels, fragmented retail

environment, and a disparity in usage

profiles for your category. Larger markets

are challenging to enter. However, a

5% market share in a large country may

deliver greater long term dividends than

a 50% market share in a small country.

Competitive Environment – Get Ready

for Battle: Evaluation of the competitive

landscape in your target market is critical.

Does the market represent virgin territory?

Or will you face 2-3 major, multinational

competitors? In competitive markets,

existing market combatants will typically

spend heavily to defend their brand

position to blunt a competitive

introduction. It is likely that you face

competition in every market. However,

it is important to calibrate the existing

competitive environment.

Availability of Enthusiastic Local Partner:

Selection of a qualified, local partner is

another key factor. Strong distributors

and importers exist in every market.

Pro-active contact from a leading

distributor indicates that this market

expert sees potential in your product.

This is favorable and may encourage you

to prioritize this type of market. However,

you must conduct due diligence to insure

that this enthusiastic distributor (that you

meet at a trade fair) maintains the critical

mass and skill set required to succeed in

building your brand.

These factors all play an important role in

determining the “Size of the Prize” in new

markets. Veteran exporters will weigh each

factor to establish the right path forward

for their export development plan.

New Country Expansion Prioritization

Create Your Own Export Library

Looking for a fresh point of view for your

next event or training workshop?

Contact Greg Seminara at

greg@exportsolutions.com

All guides available free at www.exportsolutions.com.

Export Strategy Guide

Distributor Search Guide

Export Handbook

Selling to USA Handbook

Distributor Management Guide

Finance & Logistics

300 Tips for

Export Managers

Idea Guide:

New World – New Business

Export Treasure Chest

My Favorite Templates & Forms

People Power

Strong Teams Build Great Brands

New Distributor

Cooperation Model

Export managers rarely think about how much money a

distributor is making from representing their company. Big

mistake! How often do you think about your own salary? How

do you feel when you get a raise? Or no bonus or a reduction of

salary? Most distributors are family owned operations, relying

on net profit margins in the 3-5 percent range. Distributors make

money on scale, always looking to attract companies with

existing sales versus pioneering risky new product ventures.

1. Calculate how much revenue your distributor sources from

representing your company.

A quick estimate can be generated from net sales multiplied

by the distributor margin.

2. What is the work required to build your brand?

How much of the distributor’s resources will you need to achieve

your mutual objectives? Is your brand a tough sale, or growing a

popular item? Dedicated brand manager or shared?

3. How much complexity is involved with your business?

Number of items in your product portfolio? Shelf life?

Temperature control logistics? Highly competitive category

or “niche?” Every day low price or frequent promotions?

Average order size? How much help (pressure!) from

manufacturer? Marketing budget? These inputs directly

impact distributor profitability.

4. Distributor margin is the ﬁrst place where they generate income!

Distributor executives receive salaries and “owner-operator”

benefits like travel, cars, and jobs for family members. Country

level price calculations are usually based upon the most

expensive customer. A distributor gains income when other

customers do not receive similar discounts and rebates.

5. All distributor margins are not equal!

The key is to examine “what’s included.” Some margins appear

high, but could include periodic trade price promotions. Others

margins may be lower on the surface, but then allocate separate

line item add-ons for logistics, administrative overhead, or

distributor profit margin.

6. Pioneering is extremely diﬃcult!

It may take one year from the time of your first discussion

with a distributor to the time he receives trade payment for his

first shipment. Normally, a distributor must allocate his team

resources for up to a year, with hope for a long term payout. This

is a difficult gamble. Manufacturers must remember this fact, and

understand when distributors refuse to partner with a company

with no existing sales.

7. Marketing investment drives distributor Income.

Funding required consumer and trade marketing investments

stimulates sales. Higher sales generally translates to higher

distributor profit. No investment leads to marginal sales and

lower distributor revenue.

8. Price increases: tough to execute, but pay raise for distributor

Customers are reluctant to accept price increases, because

they hate to raise prices to the consumer. However, currency

fluctuations and raw material prices force manufacturers to take

price increases. Many distributors are very open to a timely,

competitive price increase. Higher invoiced case costs deliver

greater returns at a consistent margin, except if volume suffers.

9. Consider direct talks on margin and compensation

Most employees enjoy an annual performance and salary review.

Many distributors would welcome a review of compensation

trends. This would include sales, resource allocation, currency

fluctuation, trade payment and competitive activity.

10. Open dialogue on alternate ﬁnancial models

A company with critical mass may operate on an “open book,”

cost plus model with a distributor. A large brand may benefit

from margin rebates when certain volume thresholds are met.

Another approach involves manufacturer funding of a dedicated

“team within a team” at a distributor. For a small brand or new

entry, consider a monthly retainer fee to cover six month start-up

period. Another is an incentive program which rewards the

distributor for achieving volume targets.

11. Helpers are heroes!

Many distributors literally write the check for your invoice

from their own funds. Frequently it is difficult for small-mid size

distributors to dictate payment terms to multinational retailers.

This forces distributors to swallow price increases, extra retailer

fee demands, currency impact, etc. Large brand owners that

serve as caring partners that “help” will be rewarded with a

healthier distributor and more focus on their priorities from

an appreciative distributor.

Ten Tips: Distributors Need to Make Money Too!

Need a hand? Visit www.exportsolutions.com.

Stretching thin marketing budgets is a job

requirement for most Export Managers.

Listed below are “Ten Tips” for brand

building on a “Shoestring Budget.”

1. Tap into Government Export Programs

Many countries sponsor strong trade

organizations that can aid your export

development program. Exports translate

to jobs and most countries have well

established programs to facilitate the

sale of locally produced products. For

example, the USA Foreign Agricultural

Service will co-fund marketing

investments for small-mid size USA food

producers through their MAP programs.

German Sweets and GEFA, UBI France,

ICE (Italy), ICEX (Spain), Austrade

(Australia), and AG Canada serve as

valuable resources for local exporters.

These organizations often sponsor local

“Food Events” at leading supermarkets

in international countries. For example,

Austrade sponsored G’Day USA to

showcase Australian food producers to

USA consumers. These events are highly

publicized and normally feature a

relatively modest participation fee.

2. Leverage Relationships

with Global Retailers

Wal*Mart, Carrefour, Tesco & Costco all

maintain programs to ease the export

process for their current suppliers. This

usually involves direct consolidated

shipments with other local producers,

labeling assistance, and placement in a

special section in the international aisle of

their stores i.e. USA Foods, France Foods,

UK Foods etc. The immediate benefit is

the streamlined route to market without

payment of upfront local marketing fees.

This allows you to “Test the Market” prior

to a traditional market entry with a local

distributor and heavy marketing support.

3. Joint Venture with Local Manufacturer

Another idea is to locate a local player

in your category in a country targeted

for expansion. You may be able to offer

a potential partner innovation in

taste/flavor or packaging to complement

his local expertise. A joint venture or Co-

Branding agreement can produce revenues

without significant start-up funds.

4. Build Marketing Costs

into Distributor Margin

Many manufacturers build an accrual fund

into their distributor margin calculation.

Normally the

funding level

is around 10%

of sales, but

can range from

5 -20% depending

on the category.

This creates a

fund for the

local distributor

to manage. The

accrual fund

is created on

a “pay as you

go” basis, with

fund levels

proportionate

to shipments. In

this scenario, the

manufacturer

usually provides

a small fixed sum to create a launch

budget prior to initial shipments.

5. Free Goods May Fund Trade Marketing

Free goods may be used to offset the cost

of trade marketing programs, particularly

for established brands. This can be in

form of a 1 free with 10 purchase or

similar type of promotional events.

The benefit is that your budget can be

stretched as your cost of goods produced

is less than the wholesale cost.

6. Private Label

Retailers source quality products for their

private label at the lowest possible price.

This eliminates the need for marketing

investments. However, private label is

difficult if freight expenses are too high.

7. Foodservice Channel

Foodservice/Catering offers a “low

investment” route to market versus

the supermarket channel. Foodservice

usually requires less traditional brand

marketing support. Foodservice operators

look for tailored solutions with rebates

based upon purchase levels. A small

budget for SPIF’s (SPIF- special incentive

fund) can generate purchases from

independent restaurants.

8. Specialty Retailers

Each country has specialty retailers that

serve as alternate channels for your

brands. This could include diverse

customers such as Cost Plus World

Market, Trader Joes, Big Lots or Dollar

Tree in the USA. These retailers maintain

different approaches not dependent

on heavy manufacturer spending. Their

strategy is to offer different brands (or

sizes) versus traditional supermarkets

or mass merchandisers.

9. Co-promotion with other Brands

Retailers generate excitement through

Theme events around a group of

complimentary items or common cause.

This could involve participating in

Barbecue event with other Barbecue

related products: Charcoal, Meat, Picnic

Supplies, Drinks, Pickles etc. Another

example is a retailer promotion

celebrating their anniversary or support

of their favorite Charity (Juvenile

Diabetes etc.). In many countries, leading

distributors sponsor an annual event for

all the brands they represent. Don’t forget

the country specific promotions (G’Day

USA) mentioned earlier. In each case,

manufacturers pay for a portion of the

event as costs are spread out among all

brand participants.

10. “In & Out” Packs/Gift Baskets

These special packs can generate

incremental business without investment

in listing fees or shelf space. Examples

could include modular displays, trail

size shippers, or bonus packs with

free product or gift. Gift Baskets are

very popular during the Christmas

Holidays. This is a good vehicle for

“Fine Foods” brands to gain exposure

with gourmet consumers.

International Expansion – Shoestring Budget

Selling more to Bermuda and Bahamas

versus Brazil? More business in Hong

Kong than China? Join the club. The

long road to BRIC success is filled with

dangerous curves and uncertain junc-

tions. “Low hanging fruit” opportunities

in these countries have long disappeared

replaced by a scrum of category

combatants from all corners of the world

wrestling for market share in what could

be small categories for a long time to

come. There are no miracle solutions! Our

ten tips apply to large emerging markets

such as China and Mexico as well as

companies having troubles penetrating

Germany, Japan, Italy or the USA.

1. Apply Fundamental Lessons Learned

from your Home Market

Think about the factors that drove your

success in your home market: Unique

product, Consumer Research, Local

Production, Competitive Pricing,

Marketing Budget, Strong sales team, etc.

The same fundamentals apply to entering

large new markets. I always challenge the

senior management of my clients with the

following Business Case Study: What

would you do if competing Global Brand

“A” from another continent tried to enter

your home market? The response is filled

with aggressive plans to defend the home

turf. My next question is “Don’t you think

that the local competition will react the

same way when you plan to enter their

home market?”

2. Stop Treating Large Countries

as Export Markets

Shipping small quantities of product

thousands of miles and visiting twice

a year will not win in a large market like

Germany, the USA, Mexico, or China.

Large markets need to be treated

strategically, with a separate business

strategy and resource commitment versus

a small export market. In some cases, it is

better to exit a large market if you can not

commit versus potentially harming the

brand image with lackluster shipments

through a subpar effort.

3. Conduct Market Research

Extensive category research is required

in strategic markets. Is your category

developed or evolving? For developed

categories, what unique characteristics

does your brand deliver and how much

do you plan to invest to source share from

existing brands? In new categories, what

does the consumer say about your brand?

Is the taste profile

appreciated, even if it

foreign versus the local

cuisine. Syndicated data

is available which will

help you gauge the “size

of the prize.”

4. Pursue Local Manufacturing

Export programs to large

countries infrequently

generate substantial

businesses. The incremental

overseas freight costs and

duty structures normally

translate to retail prices far higher

than competition produced in country.

Building a factory represents a long term

commitment. Contract packing could

provide a less costly, interim option.

5. Prepare Your Board for

a Long Term Investment

Creating a meaningful new business in a

large country is not a 1-2 year event. More

realistic is a 5-10 year plan depending on

existing acceptance of your category.

Brands and habits and practices take

years to create except in the case of true

innovation. A significant investment in

marketing is mandatory, even in the case

of a true category innovation.

6. Buy a Local Competitor

The quickest way to gain a presence in a

large market is to acquire a local competitor.

Conduct a category review and see which

competitor would be the best “fit” for your

company from a product portfolio and

cultural standpoint. Price is always a

consideration, as you do not want to

overpay for future growth in an emerging

market or pay too much for market share

in a mature market.

7. Don’t Tackle Many Large Countries At Once

Companies multi task. Morning meeting on

Mexico and we’ll attack Russia after lunch.

A better idea is to pick one major country

and plan to focus the teams resources on

winning in that country for the next 1-2

years. This includes deployment of human

resources as well as investment dollars. Get

it right and management will be pleased to

fund a broader expansion. Spread yourself

too thin and you may fail everywhere.

8. Invest in an Expatriate

Companies need a soldier from your head

office on the ground in the country of focus.

This facilitates the transfer of best practices

and company culture to the new country.

The expatriate knows who to call at the

home office to get things done. He can

report the true status of initiatives and has

a long term dedication to the company. Best

bet is to partner the company soldier with

an experienced local player who knows

the local market, culture, customers etc.

Language barriers can present a challenge,

but the benefits far outweigh the issues.

9. Scorecard against In Store Fundamentals

Your sales team must be equipped and

measured against the fundamentals of

securing strong in-store presence at

leading retailers. Too many times, a

team’s progress is judged solely upon

shipment numbers. Another scenario

reflects positive reports regarding chain

headquarter authorizations, but no follow

up execution at store level. Our business

succeeds with a team focused with

winning the battle store by store.

10. Consider a Local Partner

Plans may be fast tracked through a local

partner. Partnerships can take many

forms including a joint venture, licensee,

services contract, or distributor type

relationship. Extensive due diligence is

required as unsuccessful partnerships can

be difficult to exit. Export Solutions has a

thorough nine step process we deploy on

our many partner identification projects.

Lessons learned including alignment

from your partners senior management

to the retail merchandiser, as often the

partners commitment gets diluted

through the supply chain. It’s advisable

to have your own representative “in

house” at the partner to look out for your

company interests. Partner results are

directly proportional to your investment

as even the best sales teams require the

right financial resources to allow them

to obtain optimal performance.

Ten Tips – Fixing the Problem: Small Shipments to Big Countries

Exporters love the thrill of creating plans

to conquer new markets. The reality is

that our annual sales quota is dependent

on driving new sales from our existing

markets and distributors. This appears

as a challenge in a low growth country

or mature category, particularly if you

are not blessed with baskets of money to

invest in brand support activities. Listed

below are our ten tips for sourcing new

sales from existing markets.

1. Fill in White Spaces on your Listing Map

Most manufacturers focus their energy

on the total sales number for a country.

The one template I recommend for each

market is a Listing Map. This grid lists top

10 customers in the first column and your

brand SKU assortment in a horizontal

row. Where are the distribution voids?

Which new listings will generate the most

cases? What resources are needed to fill

the white spaces? What is the plan?

2. 10% Challenge

Trade spending may be a wise investment

if it drives profitable, incremental sales.

This is a good time of year to challenge

distributors with the question: “What

type of spend levels would be necessary

to secure a 10% increase in shipments

(consumption) in the next 90 days?.”

Of course, in emerging markets you

may want to challenge the distributor

for a 20-40% increase or higher.

3. Retail Sales Contest

Competitive sales representatives love

contests. Everyone enjoys winning a prize

or supplementing their income. Brand

owners should consider a sales contest

that is tied to “Pay for Performance.”

Measure incremental pallet displays for

volume brands or most creative display

for smaller brands. Sync your competition

with your peak seasonality or a new

product launch. Awards such as iPads or

weekend trips are motivational. Structure

the contest to maximize winners. Create

a theme and “have fun.”

4. Senior Management Visit

Schedule a visit for your company

president or other senior executive to visit

an underperforming market. Arrange for

the visit 2-3 months in advance. You

would be surprised at the serious market

issues that are resolved prior to your

bosses arrival. The executive’s visit is

boosted by new ideas and a commitment

for future performance.

5. Evaluate Your Pricing Model

Pricing drives volume. Most pricing

models were designed at the beginning

of a relationship and rarely revisited

except for the periodic price increase.

Conduct a retail pricing survey. What is

your price gap versus your competition?

What would happen if you adopted an

“every day low price” approach? If you

took a price decline of 10%, would the

incremental volume compensate for

the price reduction?

6. Co-Promotion: Leverage

Distributors Portfolio

Many of the most successful distributors

run quarterly or annual promotional

events featuring all their brands. Normally,

there is a charity tie-in or special theme

overlay. The beauty is that each of the

distributors brands pays only their share

of the event. These Co-Promotion events

turn out to be a big win for the distributor

and each of their brands.

7. Annual Customer Business Review

It’s appropriate for a formal review

of your business at each major customer.

This could be a data intensive review at

a key customer in a developed market

or a “two pager” in an emerging market.

The process is the key. Focusing each

sales representative to analyze their

business results and identify their

largest opportunities adds visibility

to your priorities.

8. Spend Time at Retail

Most market visits program the

export manager from hotel to office

to customer followed by dinner.

Periodically, we’ll squeeze in a store

visit or two before a customer call or

flight departure. Why not dedicate a

day at retail with the retail manager

during a market visit? You’ll get a

good pulse of market conditions

and communicate your brand insights

directly with the retail sales manager.

Brands that are obsessed with in store

performance win incremental retail

sales team focus.

9. Offer a Bonus Pack or On-Pack Promotion

Most brands source 90% of their

sales from the shelf. Generate some

excitement everyday with a bonus

pack or other special pack promotion.

Many distributors can manually apply

small gifts or premiums at their

own warehouses.

10. Distributor Change

Organizational change is a last resort.

However, if a distributor continues to

deliver uninspiring performance, you

may be forced to look at market

alternatives. How is the distributor sales

growth versus overall category and

market growth? A new distributor

typically brings a boost of energy and a

renewed sense of commitment to a brand.

Ten Tips – Sourcing New Sales from Old Markets

Changing distributors is a messy business, filled with hurt feelings,

business disruption, and legal implications. The good news is that

when you have transitioned to a new distributor, you will benefit

from the enthusiasm and commitment of a highly motivated new

partner. Recapped below are Export Solutions Ten Tips for

managing the process of changing distributors.

1. Secure Agreement on Distributor Change

from your Senior Management

In many cases, a terminated distributor will reach out to your

company president or owner to appeal your decision. It makes

sense to brief your management on the situation and your rationale

for the change. If they are not aligned with your point of view,

better to learn in advance of creating a disturbance with a

distributor termination notice that could be retracted.

2. Long Term Distributor vs. Short Term Distributor?

Your approach at handling the process will vary based upon

the length of time of your partnership. Dissolving Long term

relationships( 5 years or more) requires careful handling,

documentation of situation, and consideration of marketplace

repercussions. Ending short term partnerships is usually less

complex, as it is normally clear that mutual objectives are not

being met.

3. Probation Period

Putting a distributor on probation sends a warning signal that

termination is possible. Normally, probation periods last 3-6

months and include specific objectives to achieve during the target

period. This approach gives the distributor a “second chance” to

meet expected standards. Termination following a probation period

reduces the risk of a distributor complaining that “he didn’t know

that your company was that unhappy with his performance.”

4. Check Your Contract

Distributor contracts outline termination process and procedures.

The contract will guide required steps to make a distributor change.

Contract terms are negotiable, particularly when a distributor

relationship is ending by mutual consent. In certain cases, there

may not be a contract which naturally provides a brand owner

greater flexibility. On the other hand, you still must consider local

laws and business practices which may be in place, even without

a contract.

5. Review Local Laws

Many countries have well defined laws regarding termination

of distributors, brokers or “agents.” These laws often dictate a

compensation formula for payments due to the distributor. The

legal rationale relates to the concept that the distributor invested

his own resources to build awareness and “good will” for your

brand in his country and must be compensated for this investment.

Puerto Rico’s Law 75 applies even when there is no contract signed

and only one direct shipment to a local Puerto Rico distributor

or agent.

6. Document Inventory in the Supply Chain

This includes current inventory, orders en route, and pending

orders. One of the biggest issues in any distributor change revolves

around inventory management. Angry terminated distributors may

attempt to “forward buy” or fill the market with discounted goods.

Or they may refuse to transfer inventory to the new distributor. I

have also seen cases where the old distributor attempts to transfer

damaged or outdated inventory to the new distributor.

7. Conduct New Distributor Identiﬁcation Activities

These should be in process or completed prior to termination of

the under-performing distributor. This will allow you to minimize

the time between termination notification and transition to a new

distributor. It is likely that your current distributor may learn that

you are “interviewing the market” to understand alternatives. This

is all part of the probation process and may further stimulate the

distributor to ramp up his performance levels.

8. Minimize Notiﬁcation Periods – Contract Buy Out?

Contracts may specify a 3 month to one year notification period

for a terminated distributor. A Brand owner should not want

a terminated partner representing his business any longer than

they have to. The risk to the brand is too high. I prefer 1-2 month

transition period, even if a brand owner is required to “buy out”

the last few months of a contract. It is better for everyone to move

on for a fresh start as quickly as possible.

9. Trade Notiﬁcation Strategy

It is likely that some customers will be upset with a decision to

make a distributor change. The good news is that “they will get

over it.” On the other hand, it is important to identify potential

sensitive accounts and for the brand owner and the new account

handler to have a prepared response for an unhappy customer.

10. Fast Start Program – Six Months

Your new distributor will be highly motivated to get off to a fast

start to make a strong initial impression. We need to balance this

desire to run fast to “sell” with the critical steps of focusing on the

fundamentals: Sufficient inventory throughout the supply chain,

update new vendor information in customer’s order management

system, education of the sales force on product benefits etc. “Crawl,

Walk, Run.” Normally, the process takes six months to successfully

complete a transition to a new distributor.

Future

Distributor change used to represent a challenging proposition

due to the lack of information on alternate distributor candidates.

Export Solutions database tracks over 9,200 distributors in 96

countries. This translates to an average of around 85 different

distributors for each market. This has eased the process of

identifying alternate candidates when distributor change is being

considered or required. Visit www.exportsolutions.com/distributor

Directory.aspx for more information.

Ten Tips – Changing Distributors:

“The Right Way”

1. Determine Brand Ambition for Country

Will your brand be a category leader, player,

or niche participant?

2. Establish Distributor Selection Criteria

Big brand distributor, category specialist,

or smaller entrepreneur?

3. Create a Pool of Candidates

Export Solutions’ database tracks

9,200 distributors in 96 countries.

4. Determine Candidate’s Preliminary

Interest Level

Send introductory email, followed

by phone call within 48 hours.

5. Introductory Web Interview

One hour meeting to share credentials

and conﬁrm interest.

6. Local Interview at Distributor’s Oﬃce

4-6 weeks lead time. 2 hour meetings.

Send advance agenda.

7. Independent Store Checks

Provides category insights and real distributor

performance for current brands handled.

8. Interview Preparation: Scorecard, Samples,

Your Presentation, Key Questions

Export Solutions’ templates: Assessment

Scorecard & Ten Questions for Every Interview

9. Distributor Interviews – Target 3 Candidates

Review capabilities, warehouse and interest

in your brand.

10. Cooperation Model

What is the plan? Year one plan, pricing

calculation, and timeline.

10 Step Distributor Search Process

Looking for Good Distributors?

Export Solutions’ database covers

9,200 distributors in 96 countries.

www.exportsolutions.com

Distributor interviews can be compared to a first

date. There is no second date after a bad first date,

even if both parties are interested in each other.

On the other hand, a good distributor first

interview can lead to a lifelong relationship.

Listed below are Export Solutions’ ten tips on

enhancing the productivity of your distributor

interview process.

1. Schedule Interview With Four to Six Weeks Lead Time

This allows you to program several candiate

interviews on your preferred timeline. Long lead

times enhance the chance of distributor senior

management availability and provide sufficient

time for motivated distributors to research

your category.

2. Meeting Agenda

Send a meeting agenda three weeks in advance

of meeting. Typical discussion topics include

Distributor credentials, organization model,

coverage by channel, success stories, category

insights, and distributor margin philosophy.

3. Store Visits – Pre-Interview

Export Solutions always conducts independent

store visits prior to our distributor interviews. This supplies

a snapshot of distributor’s performance for other international

brands. It also permits us to quickly become familiar with local

category dynamics, competitive activity, and pricing.

4. Distributor Assessment Grid/Questions

Prepare an assessment grid template highlighting and

weighting core assessment areas prior to your first interview.

Create a list of potential questions to be asked during the

meetings. Export Solutions provides free sample Distributor

Assessment grids and “10 Questions for Every Distributor

Interview” on our web site.

5. Distributor Presentation: Template or Tailored?

A key indicator of distributor enthusiasm is whether they

created a personal, tailored presentation for your meeting or

swapped brand logos and provided their “standard pitch.” Best

in class presentations allocate equal time for Distributor’s CEO,

functional heads, and your proposed first point of contact.

6. Your Company Presentation

Be prepared to share a 10-15 page presentation on your

company credentials. Stick to the key facts: company metrics,

product point of difference, export success stories, and plans

for the market. Bring plenty of samples for everyone to try.

Note that the distributor will ask for your presentation, so keep

it brief as you do not want a lengthy strategic presentation in

the hands of a distributor that is not selected.

7. Tour Distributor’s Office and Warehouse

Would you buy a house without visiting it? Distributor

offices and warehouses offer valuable clues to distributor

activity, head count, size, and professionalism. Your quick

inspection will validate that the distributor’s activities match

claims from their presentation.

8. What’s Their Plan?

A core question in a positive interview is “What would the

distributor’s plan be if we awarded them the business starting

next Monday?” This provides insights on their plans, timelines,

and process for transitioning and building new brands.

9. What Do You Like About Us?

A good way to measure distributor interest is to ask their

feedback on your opportunity towards the end of the meeting.

Framing the question from a positive point of view allows the

distributor to express interest or concerns.

10. Provide Homework Assignment

Conclude each positive meeting with a request for distributor

to provide a deeper category assessment and a suggested entry

or transition plan. Distributors should supply references for five

of their existing clients. An important insight will be the quality

and response time for completing the “homework.”

Ten Tips: Distributor Interview Preparation and Insights

Need more information? Visit www.exportsolutions.com.

Why do Export Managers Partner with

Export Solutions for Distributor Search Help?

4 Industries Leading Distributor Rolodex

• Excellent relationships across 96 countries

• Database tracks 85 distributors per country

• 300+ distributor search projects completed.

4 10 Step Distributor Search Process

• Logical, thorough due diligence process

• Professional approach yields positive results

• Publisher: Distributor Search Guide

4 Independent Expert Assessment

• Expert partner to export managers

• Focused on all aspects of distributor search

• Working for you!

4 Results

• 90%+ success rate

• Align with “Best in Class” distributors

• Typical project takes 4 months from project brief to distributor selection

4 Make Your Life Easier!

• Identifies 5-8 qualified candidates per country

• Organize meetings with top candidates

• Sounding board during assessment process

• Export Solutions participation sends positive message to distributors.

Export Solutions Can Help!

• Distributor Search helper in 96 countries

Contact Greg Seminara at

gseminara@exportsolutions.com

or (001)-404-255-8387

www.exportsolutions.com

Your new product launch is a big deal, comparable to the birth of

a child. The first days are critical if you want to raise a “healthy

brand.” Listed below are Export Solutions’ ten tips for launching

your company for the first time to a new distributor or

expanding through a new product introduction.

Firm Calendar

Distributor and brand owner should align on a “firm calendar.”

This includes dates for sales materials development, launch

meeting and key account calls. All dates are dependent on arrival

and customs clearance of the first order. No product, no meeting!

Get Ready

Allow adequate time for printing of point of sale materials

and development of key account presentation. In some cases,

translation or local adaptation of brand owner supplied tools

may be required.

Memorable Meetings

I still remember motivational meetings with themes around

boxing and magic. Create new memories with a special theme or

an external speaker. Off-site meetings contribute to making your

launch special, with an added sense of commitment. Have fun!

Mandatory Attendance

The distributor CEO, brand manager, and export manager must

all attend and have speaking roles. Best is to have one meeting

with sales and merchandising teams together. However, in some

cases, a follow up meeting may be required. Invite logistics,

finance, and customer service people to make it a “team effort.”

In-Store Objectives

Establish clear measures for in-store presence. This includes

shelf positioning, space allocation, pricing, and off-shelf

merchandising. Share a photo. What qualifies as a “good store”

versus a “bad store?”

Frequently Asked Questions

Prepare a list of potential questions and logical responses. Role

play with the team. Share a printed one pager with sample

answers to tough questions.

Samples, Samples, Samples

Provide generous quantities of samples for all distributor

employees to enjoy and take home. Prepare recipes if your brand

is a food product. Samples are your best advertisement.

Personal Goals

Each team member should have personal goals for your launch.

For a key account sales person, this could be acceptance of the

core product lineup. A retail merchandiser could be assigned a

target of a specific number of stores with displays or eye level

shelf placement. For the launch, focus on implementation goals

versus case shipments.

Key Account Calls

In many countries, large supermarket chains dominate sales.

Develop a personal strategy for each key account. What are the

buyers internal goals? How do we fit with the chains consumer

base and plans? Which chain “push” programs can we

participate in? Schedule a “lead call” with an easier key account

to get feedback that will help you with a tougher buyer. Invite

the export manager or distributor MD to participate in the sales

call if it will help.

Audit

Schedule a retail audit of stores to coincide with the expected

retail availability of product. Bring other people from the brand

owner’s company and have 2-3 teams auditing the market

against a specific set of goals. Visit secondary cities, not just the

stores around the distributor’s office. Recognize that conditions

will not be perfect and celebrate progress to date.

New Product Launch: Ready, Set, Grow – Ten Tips

Need more information? Visit www.exportsolutions.com.

Fifteen Tips: Achieve Preferred Supplier Status

A natural goal is to achieve “Preferred

Supplier Status” with retailers and your

distributors. Satisfied trading partners

generate superior results. “Vendor of

the Year” does not mean “Spender of

the Year.” Listed below are 15 tips to

be viewed as a Preferred Supplier with

your distributors and retail customers.

1. Invest in Brand Support

Marketing activities drive incremental

sales and cultivate the health of your

brand and category. Supplier investments

in consumer awareness and retailer

development activities help everyone

achieve their sales objectives.

2. Innovate, Innovate, Innovate

The CPG/FMCG industry is fast paced,

with frequent new product introductions.

Companies which invest in research to

deliver new product ideas out-perform

and lead the category.

3. Keep the Supply Chain Filled

Short shipments cause a chain reaction

of problems throughout the supply chain.

Seek to attain a 98% case fill rate or better.

4. Distributors Need to Make

Money Too!

Retailers, Manufacturers, and

Distributors seek to achieve a reasonable

profit. Distributors (Importers/Brokers)

are often “squeezed” as middlemen.

Distributor Margin reductions translate

to cutbacks in sales personnel, customer

service, investments in technology, and

ultimately impact results for your brand.

A financially healthy distributor is a

productive partner.

5. Focus on Priorities versus Minutiae

All partners are guilty of getting absorbed

in the details of the business. Maintain

attention on the key elements which

drive business success. Minimize

“non-essential” reports.

6. Serve as Category Expert

It’s a challenge for Retailer buyers and

distributors to master all the categories.

Preferred suppliers provide fresh and

unbiased insights into category trends,

product development, and analysis of

category data.

7. Visit the Market, But not Too Often

Distributors and Retailers welcome your

periodic visits. Insights on market

development and problem solving “face

to face” are

invaluable. On the

other, you need to

provide distributors

the time and freedom

to build the business

without distraction

of preparation and

management of

frequent supplier

market visits.

8. Calibrate Time

Commitment to

Compensation

A first step is

to evaluate what

your brand represents

to a distributor (or

retailer) in terms

of annual revenue/

profit contribution.

Reflect on the

activities requested

to service your

business in relation

to your contribution.

9. Keep Your

Commitments

Preferred suppliers

are viewed as trusted partners. Reliable

suppliers secure more than their fair

share of retailer and distributor focus.

Last minute cutbacks in marketing

support are sometimes necessary, but

damage your credibility.

10. Respond to Local Ideas

Distributors and Retailers know their

markets. Give them the support they

request on a new promotion idea or sales

campaign. Let them build ownership of

an idea and the ultimate results. Good

ideas will build credibility and sales.

11. Pay Bill-backs on a Timely Basis

Many distributors are small businesses

with tight cash flow. It is always positive

to be viewed as a “Prompt Payer” of

legitimate invoices.

12. Support Distributor

with Corporate Headquarters

Many companies enjoy long term

relationships with their distributor

network. The Distributor depends on

you to serve as their advocate with senior

management of your company. Fight for

their ideas and defend their business

performance, where appropriate.

Remember that all organizations

experience a mix of “good years and

bad years.”

13. Share Best Practices

Industry participants are all “students

of the game” and are generally open

to learning about strategies from other

markets/retailers. On the other hand,

we must recognize that all markets have

subtle differences and not all approaches

are transferable.

14. Provide Proper Lead Time to Achieve

Desired Results

The consumer goods industry is relatively

organized with established protocols

and timelines. Exceptions can be made

in case of product recall or breakthrough

innovation. Everything functions better

when timelines are adhered to.

15. Recognize Achievement

Take the time to say “Thanks” or “Well

done.” This acknowledgement may be

in the form of a personal note, phone call,

or public recognition.

Export represents a dynamic growth

opportunity for most companies.

However, most companies make

mistakes, particularly in the early cycles

of their export development. Listed

below are some common mistakes:

1. No Category Research

Some companies assume that their

category development is consistent

everywhere. They fail to conduct basic

research on competitive dynamics and

pricing. This research can be as simple

as a day of store checks in your target

market. I remember having an argument

with a leading producer of branded

Indian Food about export opportunities

to Latin America. He refused to believe

that the market for Indian food was so

small, because he had not conducted

research or visited the market. Do

your homework!

2. Limited Investment in

Marketing & Trade Spending

Few brands are so innovative and

exciting that they will sell without

investments in consumer awareness

activities and trade incentives. Yet,

many exporters believe that they can

offer a “net price” and a distributor

will create a significant business, without

support. There is a cost of doing business

in every market. Ultimately, your results

will be directly proportional to your

marketing investment.

3. Another “Me-Too” Product

Innovation sweeps the world at a rapid

pace. Manufacturers fail when they do

not create a unique selling proposition

(USP) for their brand. Why is your

product different versus current options?

Is the differentiation meaningful? A

better price (value) or heavy marketing

investment can also differentiate your

brand. I recently visited Europe’s largest

food trade show. I saw a “lonely”

exhibitor from the USA with little

interest in his commodity food products.

Why would a European retailer or

distributor want to import a product that

can be sourced locally at a better price?

4. Pricing is Too High

On many export projects, the price to

the consumer can be twice the price from

your home market, by the time that you

add in logistics costs, duties, distributor

margins, and taxes. Yet, much of export

growth is sourced from emerging

markets, where

spending power is

low. So, the result is

high priced product

being marketed to

people with limited

funds. In many cases,

the consumer will pay

a premium (10-30%)

for a quality,

imported product.

However, once your

product is priced 50%

or higher than the

local competition, you

are just appealing the

top 10% of the population in most cases.

5. Product not Labeled in the Local Language

English is a global language, but

obviously your brand will obtain a

better reception if it is labeled in the

local language. Many countries have

laws requiring labels or at least

nutritional information in the local

language. Another similar issue is that

some brand names do not translate on

a global basis. What does your brand

name mean in the local language? Does

it sound similar to something else which

has no correlation to your brand?

6. Insufficient Due Diligence during the

Distributor/Partner Selection Process

I am amazed at the number of

relationships based upon only a short

meeting at a trade show. I love trade

shows and believe they are a great

place to meet prospective distributors.

However, you must conduct due

diligence on your prospective partner

in their home country, before beginning

your relationship. This includes

interviewing the distributor as well

as other candidates at their local offices.

Visit the stores to see their performance

for their current brands. Conduct

reference checks and run financial checks

with Dun & Bradstreet or similar credit

check agencies.

7. Diverting – New Customer

Pick Up at your Plant

Export managers are flooded with

requests by distributors/buyers wishing

to purchase well known brands. Many

of these inquiries are legitimate, but a

significant percentage are from diverters.

I’ve written a separate article on this

subject, so I’ll only share a few

comments here. If your export price is

less than your standard price, display

extreme caution in dealing with new

distributors/buyers.

Complete the required “Due Diligence”

referred to in point 6, including a visit to

the distributors warehouse. Do not allow

pick up at your plant or at a local port by

a new distributor, if your price is lower

than your standard price. Ship to the

distributor product labeled in his native

language and be cautious about promises

to sticker the product at the port.

8. No Focus on the Shelf

Too many exporter/distributor

discussions concentrate only on

container shipments and orders. A

critical element is the need to focus

on activities to generate consumption.

Some export projects fail, because the

exporter does not dig deep to track

progress against fundamentals of

acceptance at major retailers, assortment,

pricing, shelving, and merchandising at

store level.

9. Exporter Fails to Visit the Market

The internet has facilitated global

communication. However, there is no

replacement for a periodic, face to face,

market visit to discuss issues and

measure progress. “Out of sight…out

of mind.”

10. Unrealistic Expectations

Exporters are optimistic by nature.

Launch plans project volumes based

upon category size and the famous

statement “If we secure only a 10%

market share…” You know the rest of

the story. Reality is that the 10% market

share is possible, if you focus on

avoiding the mistakes discussed

in points 1-9 above. Good luck!

Ten Tips – Common Export Mistakes

10 Questions for Every Distributor Interview

1.Company History

How long have you been in business? Who are the owners?

How many direct, “payrolled” employees do you have?

Approximate annual sales volume?

2. Company Brand Portfolio

What are your top 10 companies/brands represented?

For which channels do you represent each brand?

How long have you represented each brand?

Can you provide senior level references at each “brand owner?”

3. Key Account Buyers

Who is the buyer for our category at the largest retailers

in your market? What other brands do you sell to our buyer?

How frequently do you visit each major customer?

4. New Product Launch Success Story

Provide a recent example of a new brand launch success story.

Key retailer acceptance? Cost of entry? How long did it take?

Key elements of the success strategy?

5. Creative Selling

Provide an example where you took an assigned

marketing/brand support budget and created a successful

local program. How do you measure success?

6. Retail Servicing

How many full time employees do you have visiting retail

stores? Are they located countrywide or just in the capital city?

How do you measure a “good store” in terms of brand presence

versus a “bad store?” Describe your retail reporting system.

7. People

Who would be our point of first contact? Would our contact also

“sell” our brands to major accounts? What other brands is our

contact responsible for? How do we insure that we get our fair

share of attention from your sales force?

8. Business Planning Model

What would your action plan be if we made an agreement to

start with your company? First steps? 90 Day Plan? Reporting?

9. Cost to Serve

How do you model your distributor margin? Range

of margin for our brands? Are you open to promotional

spending split (50/50)?

10. Enthusiasm for our Company

Why is our brand a good match for your company?

Why are you the best partner in the market for our brand?

What commitment are you willing to make?

Talk to an Expert

• International Strategy Road Map

• Fix Problem Markets

• Entry Plans

• Find Distributors in 96 Countries

• Export Workshops

• Motivational Meeting Speaker

Contact Greg Seminara at (001)-404-255-8387 to discuss your business development project.

www.exportsolutions.com

Everyone knows their own salary.

But have you given much thought

to the compensation structure for

your distributor partners? Distributor

compensation is often a “murky” issue,

buried in a calculation created years ago

focused on a combination of distributor

margin plus other income for services

rendered. Brand leaders periodically

review their distributor compensation

structure and compare it to the

requirements to service their business

in 2022. Listed below are Export Solutions

“Ten Tips” for analyzing your distributor

compensation model.

1. Convert Distributor Margin

to Gross Dollars Earned

Margin percentages are important,

but another critical measure is absolute

income derived from representing your

brand. This simple calculation of gross

margin multiplied by invoiced sales

provides a baseline number. If applicable,

manufacturers should add bonuses or

subtract retailer rebates.This is the first

step to understanding your true

distributor compensation.

2. Shared Service Model

Typical distributor services may include

importation, warehousing, delivery,

selling, merchandising, invoicing, and

collections. In some cases distributors

reinvest a portion of their margin in trade

discounts or in store marketing activities.

Another major distributor expense is

people, including senior management and

a brand management team. Income from

your brand margin buys your company

a share of total distributor resources.

3. Value Equation: Distributor

vs. Local Subsidiary

An important exercise is to evaluate the

services received from the distributor

relative to what they would cost if you

needed to create your own independent

subsidiary in a country. Your analysis

should include subsidiary allocations

for buildings, information technology,

telecommunications, travel, and

entertainment. Normally, the result

demonstrates that the distributor model is

an efficient outsourcing alternative. The

key is to balance your many company

objectives versus the requirement to

function in a “shared services”

environment where you are “buying”

only part of the distributors time.

4. Pay For Performance

Most food and consumer

goods industry executives

operate in a compensation

structure which includes a

bonus incentive for achieving

and exceeding assigned goals.

Some brand owners have

extended this approach to

distributors so that the entire

team is aligned on a common

plan. All distributor bonus

schemes should reward cases

moved into consumption

versus warehouse inventory.

5. Price Increases mean

Distributor Pay Raise

Many suppliers were

fortunate enough to execute

price increases. In a margin

driven structure, this often

translates to a pay raise for

the distributor, with little

incremental effort other

than implementing the price

increase. On the other hand,

a price decline means a

reduction in distributor

compensation and the

distributor needs to execute

his own “salary” reduction!

6. Contracts and Margins from the 1990’s

Many distributor contracts and margin

calculations date back to the 1990’s or

many years earlier. These agreements are

rarely revised or reviewed based upon

the realities of competing in today’s

marketplace. When was the last time that

you reviewed your Distributor contract,

margin, and service requirements? Does

it still make sense?

7. I don’t know my distributor’s margin

This happens more frequently than you

might imagine. In many arrangements,

the distributor buys your brand at a dead

net price and applies their own internal

methodology for margin development.

Some distributors are protective of this

practice with a rationale that manufacturers

should not “pry” as long as shipments

maintain a positive trajectory.

8. Best in Class Distributor Compensation

Leading Distributors offer an open book

approach based upon a cost to serve

model. Financially astute distributors

provide new suppliers a detailed

template identifying key services and

manufacturers requirements to operate

the business. Smart manufacturers will

benchmark their distributor margin

versus similar brands in the market.

Key inputs include complexity of your

product line, logistics inputs (temperature

requirements, case weight) and size of

your business.

9. Total Compensation: More

than Gross Margin

Examine every line item in your market

price calculation to understand total

distributor revenue sourced from your

brand. Distributors may increase their

income through promotional funds,

added margin for logistics services,

or periodic bill-backs.

10. Distributors have Proﬁt Targets Too!

Distributors are in business to make

money too! It is quite reasonable to

expect that the distributor should realize

a net profit of 3-5 percent. Everyone

hopes to grow their salary base and

receive bonuses for excellent

performance. Winning long term

relationships exist when both parties

profit from business success.

Ten Tips – Distributor Compensation Analysis

There are 196 countries in the world

and there is always a financial crisis

somewhere. Recently, Western European

countries have suffered issues. Emerging

markets display a history of “boom-

bust” cycles. A friend from Argentina

explained this story. “I do not worry

when things are bad and the country

is suffering. At least, I can face my

problems directly and I know that

recovery is ahead of me. I am more

afraid in good times, when business

has been growing for a few years. In

these cases, I know that a new crisis

is around the corner and surprises

are tougher to deal with.” Recapped

below are Export Solutions’ Ten Tips

for dealing with countries experiencing

financial instability.

1. Assume every market will be

affected. Naturally, certain emerging

markets carry a higher degree of risk

versus others. However, even large

countries such as the USA and the

United Kingdom have been burned

through the bankruptcies of Bruno’s

and Woolworth’s. Total risk should

be measured by the amount of credit

outstanding as well as each countries

risk factor.

2. CFO to CFO discussions make sense.

Bring in the financial experts. Let your

company CFO or financial manager

speak with your Distributors (or Key

Retailers) financial manager. These

financial experts speak the same

language and will allow your financial

team to accurately gauge the situation.

It also spreads out the responsibility

beyond the sales and marketing

department for potential problems.

3. Request New Distributor/Retailer

Credit Information – Most of this

information was submitted years ago

in advance of the credit crisis. It is timely

to request new information every year.

2021 year end financial reports should

be available from every distributor.

4. Watch Distributor/Retailer

Inventories – Shipments to retailers may

not correlate to consumer demand.

Inventory levels measured in terms of

weeks supply on hand should be

monitored at both distributors and

retailers. Higher inventory levels signal

slowing consumer demand. Reduced

inventory levels may indicate a cash

flow/potential credit problem.

5. Connect with Peer Non-Compete

Suppliers – Every retailer and

distributor trades with a myriad

of suppliers. I recommend setting

up formal or informal groups of peer,

non compete, suppliers. These valuable

contacts facilitate the exchange of

benchmarking information on shared

retailers and distributors.

6. Track Leading Indicators – Most of

us are not economists, but it is still easy

to develop a simple tracking form of

leading metrics for distributors in key

countries. We suggest measuring trends

in shipments, accounts receivable,

inventory, as well as country level data

on GDP, stock market, unemployment,

and currency exchange rates.

7. Payment Terms – Some suppliers

are implementing additional safeguards

to protect themselves. This includes

moving towards “brokerage style”

arrangements where the manufacturer

still maintains ownership of the goods.

Other strategies include offering

discounts for early payment or

requesting cash on delivery.

8. Run a Dun & Bradstreet Report

on Partners – On the surface, business

may appear normal. A Dun & Bradstreet

Report (or similar) creates a rating based

upon a thorough examination of financial

records, statements and dealings of the

business with its customers, clients,

investors and shareholders.

9. Beware of Unusual Shipments

or Billback’s – Unfortunately, there

are too few examples of unusual, “best

ever” promotional success stories. Look

carefully at order patterns or promotional

allowance reimbursement (billback)

requests that appear out of sequence

or abnormal.

10. Commit to Open Dialogue

with Long Term Partners – Many

exporters enjoy relationships with their

international distributors that extend

20, 30, 40 years or more. Current financial

issues likely reflect overall country level

financial status versus poor decisions

taken by a long term distributor.

Distributors need to understand that

manufacturers hate “surprises.” Best bet

is to create an environment that facilitates

open communication supported by data

to solve any credit issues.

Ten Tips – Managing a Credit Crisis

Europe is not easy, with 50 independent

countries, 750 million people, and 24 official

languages. Within Europe, you have the

European Union of 28 countries, including

18 who use the Euro currency. The

supermarket business includes a few multi-

country players such as Carrefour, Tesco,

Rewe and Auchan. However, each country

tends to have its own dominant retailers

with unique operating practices and

distributor communities. Europe appears to

be bouncing back, with strong GDP growth

in Germany, United Kingdom, Nordics and

improved conditions elsewhere. Europe

appears attractive for USA exporters due

to the size of the prize and respect for

innovation. American lifestyle and products

are appreciated by many. Export Solutions

provides Ten Tips on cracking the code to

develop new business in Europe.

1. What is Your USP?

Europe shares many eating habits with

the USA, creating a difficult environment

to compete with higher priced, “me too”

products. Success stories typically involve

categories such as Peanut Butter, Microwave

Popcorn, or Tex Mex that are viewed as

“uniquely American.”

2. Labeling & GMO

Most European countries require labels

with nutritional information in the native

language. A frequent approach is to create

a “Euro Pack,” with multiple languages

crammed on the back of the package.

There are only a few countries that accept

the “stickered” approach. Most European

retailers do not accept products with GMO

ingredients. This is a hotly debated issue

that we will not solve here. Bottom line is

to offer non GMO versions or don’t waste

your effort in the strict countries.

3. Deﬁne Your Ambition

Are you looking to become a player in your

category, prepared to invest in marketing

support and trade activities? Or are you just

looking for incremental shipments based

upon an “America’s favorite” platform?

Either option is acceptable, but you should

align expectations and choice of partner

with your investment model.

4. First Stop UK, Then Nordics

Made in the USA brands should consider

the UK and Ireland as their initial point of

entry. Common language, familiarity with

USA brands, and organized trade structures

enhance your chances of success. American

retailers such as Waitrose, Ocado, Costco

and Whole Foods may be charmed to add

your product to their UK shelves. Nordic

countries are worth consideration. Many

food brands are imported into the region

from other European countries, so the price

gap for American brands is not as great.

An educated consumer base with strong

spending power add to the attractiveness.

Cost of entry is modest, at least compared

to Germany or France.

5. Distributor Model – Best in Class

The European distributor model provides

an integrated solution of key account sales,

country level marketing, logistics, and

financial services. These exclusive partners

service all country retailers and actually

serve as your primary “bill to” customer

in country. The USA broker model is

not common in Europe, as most brands

require financial and logistics services,

not just “selling.”

6. 3,139 Distributors – 34 European Countries

Export Solutions database covers 3,139

European distributors across 34 European

countries. This provides an average of

84 distributors per country of various

specialties: Gourmet Food, Confectionery,

Beverage, Natural Food, HBC, and other

supermarket categories. We also cover 287

“Americana” distributors handling “Made

in the USA” products.

7. Investigate ESMA

ESMA is the European Sales and

Marketing Association. This is an

organization of 70 of the top distributors

across Europe. These best in class

distributors are serious companies, with

a history of brand building for companies

with unique products and a willingness

to invest. ESMA features an annual

conference (Vilnius in June), that provides

a venue for manufacturer members to

network with leading distributors across

Europe. For more information, visit

www.esma.org, and tell David O’ Neill,

ESMA CEO, that Greg sent you!

8. Trade Shows: SIAL, ISM, and CIBUS

Participation in European industry trade

shows is a must. These shows attract from

50,000 to 150,000 visitors including most

European buyers and distributors. In 2022,

SIAL in Paris will be the best show for most

brands. ISM is Europe’s version of the

USA’s Sweets and Snacks show. Biofach is

important for natural foods and PLMA for

private label. Each country also features an

exhibition such as CIBUS in Italy, IFE for

the UK, and Alimentaria for Spain. The USA

features a pavilion at each of these shows.

Rent a booth and test reaction and interest

for your product line.

9. Americana Strategy

Each European country has retailers and

distributors that specialize in America’s

favorites. Dedicated stores like Taste of

America in Spain or Gray’s in Sweden offer

a broad assortment of USA brands to fans

of American lifestyle and homesick

expatriates. Other leading supermarket

chains offer dedicated sections of American

products. This approach is about availability

and visibility not pricing and slotting

allowances. An Americana strategy may

appear as a low cost way to test market

acceptance of your product.

10. Cracking the Code – Look in the Mirror

USA exporters considering Europe should

think about what it takes to get on the shelf

at Kroger or Stop and Shop: innovative

product, slotting fees, promotion plan,

competitive pricing, and a strong broker.

The fundamentals for entering Europe are

not that much different, other than you are

the “new guy,” with the added expense of

freight from the USA. Start slowly, with

realistic expectations of starting in a

handful of European countries versus

selling across Europe. American products

are well received, but Europe is not the

destination for those just looking to sell

a few extra cases.

Europe: Cracking the Code

The USA represents the world’s largest market. A small market

share in the USA can represent a bigger business than owning

a 50% market share in a smaller country. Many international

brands fail to reach their potential in the USA as they treat it as

just another export market. Listed below are Export Solutions’

ten tips for improving your results in the USA, a consumer

market of 330 million people.

1. Develop a Channel Strategy

The USA Food business is segmented into 13 channels, with

supermarkets claiming an average of 52% of the business. Other

important channels include Supercenters, Mass, Foodservice,

Value, Club, Convenience, Natural, Gourmet, Internet, Military,

Gift, and Ethnic. One strategy is to concentrate efforts on winning

in one channel to gain traction, versus spreading efforts in too

many areas.

2. Optimize Results at Top 10 USA Retailers

Think Walmart, Kroger, Publix, and Food Lion that all operate

more than 1,000 stores. Many companies claim that they “sell

to Walmart.” The key question is to identify a chain’s store count

and measure how many of those stores your brand is available

in. Last year, an important European beverage brand told me

that they were “selling to Walmart.” Turns out that his follow

up investigation revealed that he was selling to only 46 of

Walmart’s 3,570 supercenters.

3. Think Beyond New York

None of the top 5 grocery retailers maintain a presence in metro

New York. The USA has experienced a population shift to the

South and West, with the Northeast actually representing the

smallest of the four regions. Visit Atlanta, Houston, Los Angeles,

or Miami to get a more accurate gauge of industry dynamics.

4. Use a Broker

In the USA, the brokers play a unique role, touching virtually

every brand in the supermarket aisles. Even importers use

brokers to supplement their own efforts. Export Solutions’

database tracks 524 USA brokers, including the “Big 3.”

5. Retail Services are Required

Great news! You just received a listing at Kroger or Albertsons.

Your work has just begun. Planogram integrity is an enormous

issue in the USA. Compliance levels of new items at store level

may reach only 60% without a broker at store level to “cut in”

your product and monitor its availability.

6. Data Driven Decisions

The USA market is blessed with the most sophisticated analytic

tools that are used on a daily basis. This includes availability

of point of sale data at the chain (and sometimes store) level

to measure everything that scans. Business building and selling

incorporates use of post promotion analytic tools, market basket

studies, and brand sales by demographic cluster.

7. Try a Coupon

USA Sunday newspapers are jammed with coupons offering

consumers small discounts (.25 - $1.00) to purchase a product. Many

supermarkets up the ante, by doubling the value of the coupons.

This is a proven strategy to drive listings, generate trial, and repeat

purchase. A coupon can force a retailer to carry your product, as he

does not want to disappoint a customer with a coupon.

8. Hire a Sales Manager

An international company should place at least one person in

the USA to manage their interests. Hire a veteran sales person

and locate him in a home office in a city with a great airport

like Atlanta or Chicago. This role will allow him to manage your

distributor and broker network. You can also hire a contract sales

management group like Ram to perform this function. Hiring an

employee based in the USA signals that you are serious about

building your business in the USA.

9. TPR

This stands for Temporary Price Reduction. USA supermarket

aisles are filled with hundreds of these tags. The consumer

recognizes these tags to signal a special discount and “time

to buy.” TPR’s are normally 10% of everyday price and can be

an efficient spend particularly on a “scan down” program.

10. Ethnic Channel: First Stop

Your product will be well received in channels specializing

in your country’s products. There are well established retailers

specializing in Hispanic, Asian, British and Italian Foods. Whole

Foods and Cost Plus World Markets offer good assortments of

international brands.

Export Solutions has published a Selling to the USA guide.

This free 58 page guide is packed with insights, templates,

and retailer information. This popular guide even includes

a Dictionary of USA industry terms. For your copy, email

[email protected].

Ten Tips for Foreign Brands: USA Growth Strategies

Good USA Chains for

International Brands

Retailer Stores

Ahold-Delhaize 2,050

HEB – USA 355

Meijer 260

Wakefern/Shop Rite 361

Whole Foods 510

Hy Vee 285

Giant Eagle 216

Wegmans 106

Harris Teeter 260

Sprouts 370

Raleys 126

Fresh Market 159

World Market 242

Gelsons 27

Kings 19

A Gentle Approach

Changing distributors is never easy, because we usually like the people involved. Best approach is

to accept part of the blame for the failed relationship. Provide the old distributor a believable sound

byte that he can repeat to maintain dignity in the marketplace: i.e., brand owner was looking for a

distributor with more foodservice or small shop coverage. In the case of a long term partner (5 years or

more), it may be appropriate to offer a lump sum goodwill payment, payable 90 days after transition

in return for their cooperation. The good news is that a new distributor will emerge as motivated

partner, anxious to take a “fresh look at old challenges” and deliver on their commitment to you.

Every company includes distributors

that appear as chronic under-performers.

Year after year, management listens to

excuses and we patiently “give them

a little bit more time.” 2021 results are

in and it’s easy to spot the problems:

big country, small shipments. The new

year is the right time to implement a

process of upgrading your distributor

network to a partner more aligned with

your business goals. Listed below are

key action steps.

New Year’s Resolution -–

Preparing for a Distributor Change

3 Secure agreement from management to change distributors

3 Review your original distributor contract

3 Send official letter to distributor recapping disappointing results

3 Obtain current distributor price calculation

3 Document and monitor inventory in the system, by SKU

3 Watch account receivables and bill-backs

3 Confirm in writing 2022 spending and promotion plan

3 Interview and pre-select an alternate distributor

3 Establish realistic transition timeline with new distributor

3 Advise old distributor of change in person

Export Solutions conducts over 100 distributor

interviews/meetings per year. Many distributors ask…

What are these big brands looking for? How do we prepare

a standout presentation? What will it take to win the business?

See our fifteen tips below.

1. Professional Communications: Frequent email communication

in advance. Send re-confirmations. Offer to help with hotel

reservation or pickup. Share mobile contact for emergencies.

2. Creative Welcome: Raise flag from visitor’s country or a banner

with brand name on it. Serve food paired with their brand.

Create immediate “wow!” Skip, if confidential interview.

3. Purchase Product Samples: Potential new brand and

competitors. Supply price for each item.

4. Participants: Owner/MD, sales, marketing, and potential

brand manager. All should have speaking roles.

5. Presentation – Page 1 Company facts: Founding date, sales

revenue, # employees, # field sales, warehouse size, key

categories and principals.

6. Category Sales Data: Try to obtain category sales data from

Nielsen or a leading retailer. Prepare basic analysis.

7. Category Photos and Pricing: Provide recent photos and

pricing from target retailers.

8. Retailer Margins: Share estimated retailer category margins,

cost of entry, and listing fee expectations.

9. New Principal Management: CEO involved in update calls,

retail tracking, and total team approach.

10. Retail Reporting: Demonstrate retail technology and reporting

if you have it. Share sample reports.

11. Warehouse Visit: Short inspection, if located on premise.

12. Social Media and E-Commerce: Share local updates.

Reinforce your capabilities with recent examples.

13. Case Study: Brand owner’s category or aisle. Results

and costs. Show photos of shelf and displays.

14. References: Testimonials are impressive. Executive contact

information from top five current principals represented.

15. Action Steps: Immediate CEO/MD follow up via email.

Deliver presentation stick with your company logo.

Distributors: Fifteen Tips for Winning the Big Brand Interview

5 Questions for Every Interview

1. Where do you see your company’s business in 3 years?

2. Tell me about best practices from a country where your brand

has a high market share. What strategies work well?

3. What characteristics do you see in your best

performing distributors?

4. Are you open to distributor visit (plus customer?) to your

manufacturing facility and corporate headquarters?

5. How do you maintain category leadership?

5 Interview “Bad Practices”

1. Do not send Rolls Royce to pick up brand owner at hotel.

Do not laugh, it happened twice last year!

2. Skip company videos: sends old-school message.

3. Avoid speaking badly about other distributors. Be positive!

4. CEO should not handle entire presentation. Let the “workers”

who handle the day-to-day business speak.

5. No dinner invitation on first date: brand owners will prefer to

meet alone to discuss meetings. Many risks if meal does not

go well. Plenty of time for dinners if you win the interview!

Distributor Search Guide

Export Strategy Guide

Selling to USA Handbook

All guides available free at www.exportsolutions.com in the Export Tips section.

Export Scorecard Guide

New Distributor Cooperation

Model Guide

“From First Meeting to First Order”

Create Your Own Export Library

USA Sales – Next Level Strategies: 10 Tips

Most European brands remain frustrated by their lack of progress in the USA market. Many companies completed a first step,

with listings at World Market or Eataly (7 stores), but failed to gain traction at big chains with 200+ stores. June Fancy Food optimism

fades by October. Your boss is committed to the USA, but demands better results before bigger investments. What do you do? Call

Export Solutions!

Assessment Area Considerations Insights

Consumer Target

Who is your target consumer? Millennials, foodies, homesick expats

Channel Strategy

Unique strategy required: upscale supermarket,

e-commerce, specialty, and mass retailers

Priority: Upscale supermarkets, gourmet stores,

ethnic stores, e-commerce

Route to Market

Channel, regional, and customer experts required Determine ideal broker profile.

Focus first on good brokers, then buyers.

USA Manager

Mandatory oversight of your USA development Results proportionate to salary.

Locate close to distributor or Atlanta, Chicago

Trade Promotion

Customer specific plan required Invest in strong programs at 10 key retailers.

15% TPR promotions will not excite anyone.

Export Solutions

USA market development helper for

European brands

Point of difference: Retail reality focus.

Targeted, logical road maps. Sales oriented.

Cost to Serve

Implement strategies to reduce price gaps versus

“Made in the USA” products

Evaluate options to create more efficient cost

structure: factory gate to store shelf.

Digital Savvy

What is your social media plan?

How much are you selling through Amazon?

Digital is targeted and cost effective.

Amazon grocery: growing 30% + in USA.

Lessons Learned

What is working? Why has business not scaled?

Barriers to progress?

Independent validation and solutions provided

by USA market expert.

Benchmark Brands

Which overseas brands are winning in USA? Study best practices: Barilla, Bonne Maman,

Colavita, Filippo Berio, Lee Kum Kee, Rana,

San Pellegrino, Walkers Shortbread

Retail Safari

How do I accelerate sales in the USA? Export Solutions retail safari program yields

tailored insights and best practices for succeeding

in the mainstream USA market.

Hire a USA Expert

• USA strategy recommendation

• Category analysis and

plan development

• Identify priority channels,

regions, and retailers

• Brok er/Distributor

identiﬁcation specialist

• Have a USA pro with 20+ years

experience on your team

Contact Greg Seminara at

[email protected] to

discuss your USA development project.

www.exportsolutions.com

Export managers are overwhelmed with

phone calls and emails from companies

desiring to sell their brands. Some

proposals are worth evaluating, as we

all seek incremental sales in new countries.

Other requests originate from diverters or

“time wasters” who do not have sufficient

capabilities or financing to commercialize

your brand. Export Solutions has completed

several projects with brands looking to

streamline the process of filtering

international representation requests.

Listed below are our ten tips for efficiently

identifying serious inquiries from

potential partners.

1. List Current Distributors on your Web Site

This practice provides potential customers

and consumers a local contact for your

brand. It also discourages non productive

calls from other distributors from that

country from contacting you. Distributor

representation information is in the public domain, so web

publication does not breach any confidentiality issues.

2. Export Partner Philosophy Statement

Create a standard letter explaining your criteria for selecting new

partners. Suggested text should include comments like “Brand X

is available in 12 countries and is a leader in the Y segment. We

are looking for established local distributors in certain countries

to participate in the next chapter of our growth. Candidates

should maintain a successful track record pioneering other

international brands and offer a complete portfolio of

importation, supply chain, key account sales, and in store

coverage services.”

3. Distributor Candidate Data Sheet

A one page template captures core information from the

candidate. This template can also be web based and appear on

the “contact” section of your web site. Key inputs include years

in business, company size, web site, number of employees,

and current brands represented. Reference contacts are critical.

A sample Export Distributor Data Sheet can be located at the

bottom of the Export Tips section of the Export Solutions web site.

4. First Response: Send Philosophy Statement & Distributor Data Sheet

Send your philosophy statement and distributor data sheet as

an initial response to all unsolicited phone and email inquiries.

Instruct the candidate to review the philosophy statement and

complete the data sheet if they feel that there is a match with

their capabilities and your company’s export strategy. Inform

them that someone from your export department will contact

them once the data sheet has been 100% completed. A key

learning is that unqualified or “suspicious” candidates will

not complete a data sheet.

5. Post “Distributor Wanted” List

The export page on your web site should list countries where you

are searching for a partner. This listing will encourage inquiries

from target countries and help you “fill in the white space”

in your export coverage map.

6. Reference Check Promising Candidates

My first step is to visit a distributors web site. The second stop

is to review references supplied from other brands on his data

sheet. References listing contacts of export managers for other

leading brands is always a positive indication. A credit check

makes sense, particularly in emerging markets.

7. Watchout #1- Candidate Has No Web Site

This indicates that the distributor or entrepreneur is small or

is possibly making claims that are erroneous or misleading.

Candidates who refuse to provide references from other brands

represented also should be avoided.

8. Watchout #2- All About Low Prices

Warning bells go off from inquiries from companies urgently

focused on obtaining your export price list. I get suspicious of

international distributors volunteering to pick up product at

your factory or those who prefer English language labeled

product even when their native language is different.

9. Due Diligence Questions

What would the distributor launch plan look like if you agreed

to sell to him?

What are the local category dynamics?

What does the price calculation look like?

Can the candidate share a success story for another brand from

your country?

10. Invite Serious Candidates to Your Headquarters

The preferred option is to visit a distributor in his home market

to see his operation. This is not always possible, particularly for

small or remote countries. A visit by a pre-screened candidate

signals interest and initiative on their part.

Export Solutions’ database covers 9,200 distributors in 96

countries. This serves as a quick reference tool to check the

validity and credentials of a potential distributor candidate.

Ten Tips – Translating Export Inquiries into Incremental Sales

Savvy exporters deploy modern

web based tactics to identify new

distributors and connect with global

consumers. Most companies maintain

a basic web site featuring an

“international section,” but few sites

are designed to promote export sales.

Listed below are Export Solutions

“Ten Tips” to unleash the power of

Web 2.0 to drive new business in 2022.

1. Language Translation Software

increases your Reach

Popular software from Babel Fish or

Google can be installed on your site

to translate your International page

to multiple languages. These tools

provide instant translations without

formal redesign of the web page.

2. Code Your Site for

Tracking Analytics

Available reports measure visitors by

city/country, time spent per page, and

key search phrases driving web traffic.

Search Engine Optimization (SEO)

raises your ranking with Google.

3. List Current Distributor Contacts

This makes it easier for potential customers and consumers to

locate your brand in their home country. The distributor listing

on your web page also reduces distributor inquiries from

countries where you already have a partner.

4. Distributor Wanted Postings

Define countries where you are searching for a partner. Your

“Distributor Wanted” section should sync with your Companies

Distributor Selection Criteria. A sample statement could outline

basic requirements such as “Beverage Company A seeks partners

with significant beverage category expertise and demonstrated

success marketing other international beverage brands.

Distributor can-didates must be highly motivated with

countrywide coverage across all trade channels.”

5. Automate Process to Capture Distributor

Candidate Credentials

Create an online template to summarize a new distributor

candidate’s basic information: Com-pany size, current brands

represented, references, web site etc. Alternatively, you can

develop a process to auto-matically email a similar template

to interested candidates. Create an email box called

[email protected].

6. Establish an Intranet Portal for Existing Distributors

This password protected gateway serves as an entry point to

a data warehouse of information. The Intranet could include

product catalog, brand images, syndicated data, presentations,

and a chat function to share ideas.

7. List Local Retailers Stocking Your Product

Basic approaches include a simple drop down menu

stating now available at with names and/or logos of leading

customers. Advanced applications include ability for consumers

to search for retail stockists by postal code.

8. Product Request Form

An online product request form captures names and contacts

of consumers interested in your brand. This information can be

used to prioritize export expansion areas measured by level of

inquiries. Upon entry into a new country, the product request

data facilitates targeted marketing or to demon-strate to a

retailer a level of existing consumer interest.

9. Publish an International Newsletter

This newsletter may share new product information,

success stories, recipes, contests, or any other method to create

engagement with distributors, retailers, and consumers. Tools

such as Constant Contact make creation and delivery of online

newsletters simple and cost effective.

10. Photos Add a Personal Touch

Pictures of the Export department team members add life to the

international web page, particularly for small-mid size exporters.

Other web pages include photo’s of the “Distributor of the Year”

or senior manager visits to international markets.

Web 2.0 – Your New Export Sales Partner

1. Extensive Due Diligence

on all New Distributors

Visit each new distributor’s office and

warehouse to calibrate the size of his

business with other principals. This

includes reference checks from existing

manufacturer clients as well as from

leading retailers in his home country.

Run a Dun & Bradstreet or Equifax

financial report.

2.Design a Distributor Fact Sheet

Require each potential distributor

candidate to complete a one page

template recapping their capabilities.

Pay particular attention to sales

turnover, number of employees,

and references from existing

brands handled.

3. Ship Directly to Distributor

in his Home Country

Do not allow for distributor sponsored

consolidation at a USA port such as

Jersey City, Miami, or Los Angeles

during the initial launch phase. Allow

distributor pick-up at your factory only

after your relationship and brand have

been established for a year or more.

4. Label your Product in the Local Language

Stickering is acceptable only if it is done

in the destination country or at your

own in-house contractor.

5. Sell Only to Distributors Based

in your Target Country

Avoid shipping product to foreign

distributors with offices and

warehouses in your own county.

The goods have little incentive to leave

local ports. Export Solutions Distributor

Directory contains more than 9,200 local

distributors in 96 countries.

6. Create an “International Package”

This could be multilingual label or a

different size. One tactic is to label

packs “Export Only.” This reduces the

risk of it being diverted back to the

domestic market.

7. Establish an International Price Structure

A model could consist of export base price

plus freight charges. This prevents one

country from enjoying a price advantage.

8. Don’t Believe Stories About Cruise Ships

and Mining Camps

Sophisticated diverters come up with

elaborate stories to convince you that

your product will be sold to legitimate

outlets. Is it really worth the risk?

9. Analyze Orders Versus Size of Country

Leverage technology to alert you to

unusual order patterns outside of

historical trends. Believe me, it is not

possible that Greece or Bermuda are

selling that much product! Analyze

Nielsen consumption data versus

shipments to the market, if possible.

10. Unannounced International Market Visits

Check retail outlets independently,

without a distributor “tour guide” to

confirm a problem. Visit distributor

warehouses with short lead time to

check inventory. Recently, I visited

a distributor claiming to represent

famous brands and found that many

were missing from his warehouse or

had less than 30 cases of stock.

11. Avoid Risky Countries with Low GDP

I am naturally suspicious about

distributor orders from poor African

nations, Jordan, Haiti, or Belize.

Realistically, how many consumers in

these countries can afford premium

European or USA brands?

12. Watch Out: No Web Site

Perform a Google search on a new

distributor. Virtually all serious

companies have web sites or some

internet references. A distributor without

a web site in 2022 is either hiding

something or too unsophisticated to

grow your business. Also, beware of

generic web sites that do not show basic

information like brands represented.

There are exceptions, but lack of a web

site sets off alarm bells.

Export diverting is a serious issue at

many companies causing distrust and

lack of support for export programs. I

admire producers that regularly follow

the practices described above to “weed

out” questionable distributors. When

in doubt, offer the distributor your

standard list price from your home

country. Good luck!

Twelve Tips to Derail Export Diverting

Need a hand? Visit www.exportsolutions.com.

Most companies partner with consolidators to source incremental

business from tough to reach geographies. Consolidators are local

companies that group different products from one country into

one container. The consolidator then sells to a list of customers

that may include distributors and retailers. Consolidator business

is typically easier to handle, as you ship existing packages to a

warehouse in your home country and receive payment in local

currency. This practice generally functions well, but you must

balance additional shipments with “loss of control” and

“diverting risk.” Below are Export Solutions’ “Ten Tips”

for building your business through consolidators.

1. Use Consolidators!

Consolidators represent an efficient route to market for new

exporters, niche brands, or for hard to access regions such as

the Middle East.

2. Fee Structure

Consolidators need to make money too! Normally, their fee is

built into a cost calculation to the retailer or offshore distributor.

10% is an average consolidator margin, but there are many

variables. Note that the consolidator margin plus an extra

logistics stop will ultimately drive your price 15% higher to

the consumer than a “direct to distributor” model.

3. Avoid Region Wide Appointments

Consolidators serve as options for islands in the Caribbean or

small countries in the Middle East. However, you should rarely

give them responsibility for bigger markets like Saudi Arabia or

Puerto Rico. Better to deal directly with distributors in strategic

countries. Use the cost differential to invest in brand building

or lower retail prices.

4. Pricing

Typical pricing to consolidators is around 90% of standard list

price. This will provide a discount to compensate for promotion

pricing activity, but not a wide enough gap to risk diverting.

Good consolidator partners will share a transparent price

calculation model from factory gate to overseas store shelves.

5. Which Distributors Form the Consolidators Customer Network?

Part of your assessment process will be to analyze representative

distributors used by a consolidator. You need to decide if the

consolidator’s typical partners are a good fit with your brand

representation requirements. Note: some consolidators “guard”

their distributor lists. However, understanding their customers

is a critical step in assessing their capabilities.

6. Reference Check New Consolidators

It is a standard practice to reference check consolidators. Many

will accurately claim representation of famous brands. However,

the scope of partnership may actually be quite limited. Ask

references about years of partnership, results, and

countries/brands in the consolidator coverage agreement.

7. Mark Packages “For Export Only”

Diverting discussions are significant distractions for most export

managers. Consolidators may be tempted to divert, as they

typically purchase standard packages and receive delivery in

the home country. Labeling packages “For Export Only” or

even “Export” diminish the likelihood that your brand will

be diverted and reduce complaints and accusations from your

national sales team.

8. Beware of Local Laws

Consolidators are an integrated solution, which eliminates

measurable paperwork and stress from an export program.

However, this does not release the brand owner from obligations

to comply with local laws on labeling and distributor contracts.

Naturally, you should also maintain a contract with your

consolidator to guide terms and conditions of your relationship.

9. Request Listing Maps

A frequent complaint is that manufacturer’s lose control of their

export business when dealing with a consolidator. Brands receive

market level shipment reports at best, with limited or no data on

listings by retailer, pricing, or merchandising activity. Request

that your consolidator provide a “Listing Map,” by country at

least twice per year.

10. Periodic Visits to Consolidator Territory

Export managers should conduct market visits to leading

countries managed by their consolidator. Check stores, meet

with distributors, understand growth opportunities. These

programmed visits are likely to be positive, but send a signal

to the consolidator that you are an active partner.

Ten Tips: Best Practices for Using Consolidators

International brands find a

natural audience overseas with

homesick expatriates missing

their favorite Oreo cookies,

PG Tips tea or Kuchenmeister

cakes. “Ethnic” favorites must

move beyond their base

business as a niche American,

Italian, or German product

into the mainstream to achieve

ambitious growth targets.

Adoption as a local brand

rewards the manufacturer

with dramatically higher

sales. My Irish wife swore that

American icons such as Heinz

and Kellogg’s were British

brands because their labels

stated “by appointment to

Her Majesty the Queen.” It

was probably the one time

in our marriage when I was

actually right. Listed below

are my Ten Tips for Making a

Global Brand a local “hero.”

1. Manufacture in Country

Pride is generated when a

brand is produced locally.

The factory employs people

from the neighborhood

and spends money in the

community. It may be costly

to open a dedicated plant,

but co-packing is usually an

option. This approach may

also generate cost savings

through the elimination of

duties and overseas freight.

2. Label in Local Language

Frequently a manufacturer

cuts corners by placing a

sticker on a package or other

minor fine tuning to comply

with labeling laws. Producing

your brand with local labeling

sends a powerful message to

the trade and consumer about

your interest in their business.

Warning! Display care with

translations to avoid

embarrassing mistakes.

Google “Nova Spanish” if

you need an example.

3. Promote Recipes Using

Your Brand

A food scientist or market

research company could

study local food preferences

and your product portfolio.

Are there options to

incorporate your brand into

traditional recipes? Nutella

is finally gaining important

traction in the USA as a

breakfast spread, after years

of niche status.

4. Create an Anniversary Event

Many brands have been

available in foreign markets

for 10, 20, 30 years or more.

Why not design an anniversary

event commemorating

“25 years in the ______

Market.” Elements could

include special packages,

consumer contest, public

relations, charitable donations,

and a celebratory dinner for

your retail customers.

5. Sponsor a Sports Team

Fans everywhere love their

teams. Alignment and

support of a local sports team

yields dividends. A starting

place may be sponsorship of

youth leagues versus budget

busting football deals.

6. Core Brand –

Market Specific Line Extension

Consider adapting your core

product line to meet local

flavor preferences. Pringles

built exceptional sales and

excitement by launching

innovative new flavors such

as Jalapeno, Curry, Grilled

Shrimp, Ketchup, and Pizza.

7. Sponsor a Charity Event

There are many worthy

organizations looking for

financial support for their

programs. Normally, there are

chances to gain visibility for

your brand with sponsorship

of an event. Pick a group that

contains a meaningful link

to your product or target

consumer. Many supermarket

chains have a favorite charity

providing a route to collaborate

with a trading partner for a

worthwhile cause.

8. Co-Promotion or

Co-Branding with Local Leader

Partner with a traditional

local brand that has a long

history in the market. For

example, an international

cereal brand could align

with a local milk producer.

Similarly, an international jam

or marmalade brand might

consider a joint event with

a leading bread company. Co-

branding is also a possibility,

but reflects a long term

commitment. For example,

Post cereals markets a version

of their famous Raisin Bran

cereal which includes

authentic Sun-Maid raisins.

9. Billboards and Radio Viewed

as Local Media

Advertising or public

relations agencies are experts

at creating campaigns to build

brand equity. Billboards and

radio offer local execution

and adaptation possibilities.

10. Brainstorm with

your Distributor

Distributors are local

marketing experts with

a rich understanding of

market and consumer

dynamics in their country.

Schedule an “off site”

meeting in a peaceful

location to brainstorm

ideas for raising your brands

profile with local consumers.

This approach secures

distributor participation and

ownership of the program.

The evolution of an

international brand from

niche curiosity to local

favorite requires time,

energy, and investment.

However, each activity will

bring a step change in terms

of local brand acceptance

and sales. What can you

do differently in 2022 to

increase your brands local

profile in export markets?

Ten Tips: Making a Global Brand Local

Recipe: Best in Class Partnerships*

Ingredient Brand Owner Distributor

Results

Realistic expectations based upon

investment/market conditions.

Achieve sales increase in excess

of overall market growth.

Category Expertise

Share knowledge, trends,

and category analysis.

Serve as local category expert.

Educate the buyer.

Innovation

Contantly deliver important

new product ideas to market.

Successfully launch new products

into the market.

Investment

Appropriate Investment levels:

marketing/trade promotion.

Optimize return on investment.

Store Presence

Create clear, realistic guidelines

for in-store presence.

Share of shelf exceeds market

share. Maximize visibility.

Ideas

Support market driven ideas to

build the business.

Relentless pursuit of new and

better ways to grow sales.

Reporting

Concentrate on Basics: Listing

Map, Pricing, Merchandising Plan.

Complete reports accurately

and on time.

Focus

Periodic market visits and “rapid

response” to issues.

Appropriate level based upon

brand size and opportunity.

Cost to Serve

Remember that distributors need

to make money too!

Fair margin based upon brand

size and complexity.

Recognition

#1 Fan. Frequent recognition of

good results by all team members.

Strong commitment to exceed

expectations everyday.

*Mix Well for Best Results

How many emails do you receive a week from “distributors”

wishing to represent your brand? How much of your trade

show time is wasted on impromptu meetings with enthusiastic

“traders” who make bold promises, but never order? Why are

we surprised when you search these companies on the internet

to discover there is no information or a web site “under

construction?” Many companies’ distributor networks contain

these small, anonymous distributors who aggressively pursued

a famous brand, but rarely deliver. Give them an “A” for effort,

but distributor search must include proper due diligence of all

potential candidates, not just the small one chasing you.

Do you believe that the best distributors are waiting in line

at trade shows or speed dialing export managers? The most

powerful distributors are busy building brands for their existing

partners. However, all distributors are open to representation of

new companies. In fact, many of the more strategic distributors

assign a brand manager to new business development. This

senior person is dedicated to evaluating new company

representation inquiries like yours.

Hiring the right local partner is the third most important step

in optimizing your sales. This follows creating a differentiated

product and willingness to invest in marketing support. Listed

below are some practical tips on selecting the right company to

optimize your business in a new country.

Identify a Pool of Preliminary Candidates

Create a large group of potential candidates. This could include

distributors or local producers of related products. Include

qualified candidates that have emailed or visited at a trade fair.

Highlight companies that are specialists in the market sector that

you are aiming at. Export Solutions streamlines this process with

our industry leading distributor database containing an average

of 85 distributors (large and small) per country.

Establish Partner Selection Criteria

What are the key attributes of your most successful distributors?

Category specialization? Multi channel coverage? Synergy with

related brands? Choosing a large “Best in Class” partner versus

a “Small, Hungry” company willing to pioneer a new brand is

an important preference.

Determine Candidates Preliminary Interest Level

Send a brief summary of your product proposition and company

credentials to the 5-10 most promising candidates. An immediate

follow-up phone call to your top candidates is an appropriate

personal connection. Distributors expressing an interest should

complete a brief company overview recapping their corporate

capabilities: Sales, Coverage, Key Principals, etc.

Schedule a Meeting in the Candidate’s Oﬃce

Interview at least three candidates depending on the size

and scope of a project. Schedule the meeting 4-6 weeks in

advance. Provide a specific agenda at least 3 weeks in advance,

including pre-work such as category market analysis. Meet the

distributor’s team that would work on your business, as well

as senior management. A distributor’s office provides clues

on company culture, scale, and capabilities.

Prepare Distributor Assessment Grid

Create a list of key questions to ask each candidate. Topics could

include local category dynamics, cost of entry, and distributor

success stories. Create a standard grid to evaluate and compare

all candidates on a common platform. Contact us for our free

Distributor Search Guide with assessment grids, agendas,

sample questions and templates for every aspect of the

distributor search process.

Independent Evaluation of Candidates Performance for Existing Brands

Visit supermarkets and other retailers to observe category

conditions. At the same time, evaluate each candidate’s

performance for his existing clients. Do his current brands

maintain a strong presence in the market? Or are his brands hard

to find on the shelf? Complete these visits to leading retailers

independently, as an accompanied trip may lead you to check

stores which may not be representative of marketplace reality.

What is the Distributor’s Plan?

If selected, what is the distributors Year One plan? Customer

targets, price calculation, marketing plan, volume expectations?

Timeline and benchmarks? Key issues? Resources required?

Does their plan align with your vision and the size of the

market opportunity?

Reference Checks Represent an Important Next Step

Request references of 5 of the distributors top 10 clients. Call

at least three references and request insights into performance

and capabilities. Acknowledge that these are likely to be positive

references, but they always provide significant value. Run a Dun

& Bradstreet or other type of credit report on leading candidates.

Future

Companies conduct rigorous assessments before hiring new

employees. A higher level of intensity must be displayed during

the distributor search process When you choose a distributor,

you are selecting a whole team to represent your company in

a country, not just one individual.

Export Solutions’ Motto:

Select your distributors, do not let

your distributors select you.

Select Your Distributors, Do Not Let Your Distributors Select You!

How often do you visit your distributor’s warehouse?

Brand owners should inspect their distributor’s warehouse

at least once per year and always before the start of a

new business partnership. Warehouses serve as the

nurseries/creches for where our precious new products

are stored while the commercial team generates sales.

Warehouse managers are custodians of our sales inventory

and companies need to insure that their brands are in good

hands while awaiting sales.

Listed below are 10 Tips on productive distributor

warehouse visits.

1. Confirm Accurate Stock Levels for Your Brands

Does warehouse inventory reconcile with distributor stock

reports? How many cases are there versus agreed to weeks

supply targets? Six to eight weeks of stock is typical for

overseas brands. Walk down every aisle and check every

one of your SKU’s.

2. Identify Problems

A warehouse visit may reveal overstock or understock

conditions. Similarly, you may spot a case of poor sales

rotation or goods approaching expiration date. A common

problem is the discovery that a warehouse may not adhere

to a “first in, first out” method of stock rotation. Examine

cases to look for damaged goods.

3. Warehouse = Window Into Distributor’s Real Business

Warehouse inventory levels paint an accurate picture of

the distributor’s real business profile, not what the pretty

PowerPoint presentation tells you. What brands are stocked?

What are they selling? I remember one distributor interview

included bold claims about representation of famous

companies. The warehouse revealed one pallet of one small

SKU from the famous manufacturer. Another interview for

a distributor claimed representation of fifty world famous

brands. The warehouse check showed that 50% of business

was on a local commodity item and most of the foreign brands

had only 20-30 cases of stock.

4. Outsourced Logistics Providers

In certain countries, distributors outsource logistics to

another third-party provider. This is a mixed message for a

manufacturer. From one standpoint, this frees up distributor

management time to focus on brand building. Also, there are

excellent logistics providers that specialize in “best in class”

practices. On the other hand, the distributor has sold his

logistics contract, sourcing a fat fee for his business. Also the

external logistics provider needs to make a profit, so you wind

up with another margin line item in your calculation. Request

a warehouse inspection, even if it is managed by a third party.

5. Get to Know the Warehouse Manager

Every business runs into supply chain problems at some

point in time and its positive to know the person in charge.

Bring him a shirt or other gift with your company logo and he

will be your friend for life (or at least until the next problem!).

6. What are Distributor’s Service Levels?

Most buyer’s first concern is sales rotation. Their second

metric is service levels such as stock levels, fill rate, and

inventory turns. Your distributor’s adherence to retailer’s

supply chain scorecard objectives reflects on your brand, sales

performance, and distributor’s reliability as a provider. What

are the distributor’s KPI’s? Are they tracked automatically or

manually? How are they doing?

7. Appearances Count!

Is the warehouse clean or dirty? Does it appear to be logically

organized? Is it busy or “asleep?” These clues send an

important message on the overall status and culture of your

distributor partner.

8. Understand Distributor Value Added Services

Many distributors provide value added services in their

warehouse. This may include creation of promotion packs,

stickering or special pack displays. You may discover

distributor capabilities that you were not aware of.

9. The Heat Is On?

Products require different storage conditions. Obviously

frozen and chilled items require temperature control.

Confectionery products require different climate standards.

Health and personal care items may ship in units versus cases.

In other situations products like insecticides cannot be stored

(or shipped) with food products. What is the compliance level

versus the storage standards for your products?

10. Alignment With Expectations

Ultimately, a successful warehouse visit should match your

business and expectations. If business is good, the visit

demonstrates your interest in the distributor’s total company

and team. Request a visit just to say “thanks.” If your business

is declining, the warehouse is a perfect place to dig into what

the real situation is at the distributor. Sales to the customer

begin the moment your brand leaves the distributor

warehouse floor. A periodic inspection will insure that your

brand looks its best in transit to the store shelf.

10 Tips: Mandatory Distributor Warehouse Visit

Dramatic currency gyrations wreak

havoc with retail pricing around the globe.

Strong USA dollar, weaker Euro, devalued

China RMB, and cratering pound. These

lightning fast moves on currency

exchange may require six months or more

to wind their way through the supply

chain. Some distributors devote more time

to serving as f/x traders versus brand

builders. Unfortunately, most export

managers are distanced from the problem

until receiving an urgent call from a

distributor who faces passing on a 10-20

percent price increase to his customers.

Listed below are Export Solutions’ “tough

tactics for tumultuous times.”

Higher Prices Mean Lower Volume

Emerging market currencies usually

move in a weaker direction. This

translates to higher shelf prices. Citizens

in these economies rarely experience wage

increases in parallel with inflation. Most

consumers tend to reduce purchases of

overseas products as they become luxury

items. Exporters need to calibrate “how

much pain” they are willing to endure

in terms of lower volume.

Prices Only Go Up, Never Down

Permanent price declines or rollbacks

are extraordinarily difficult to execute.

If your currency weakens, retailers and

distributors don’t pass on lower net cost.

It is common practice for them to try to

maintain retail shelf prices and capture

extra margin. Savvy brand owners skip

the price rollback and invest in heavier

promotion levels or enjoy higher profits.

Conduct Monthly Price Surveys

In countries of extreme price fluctuation,

best to schedule monthly price surveys of

your brand and the competition. Request

that distributors use the same store base

every month to avoid regional differences.

Online grocers allow us to monitor

country pricing from our desktops,

miles away from overseas markets.

Retailers: Once Per Year Price Increases

Many retailers accept price increases

only one time per year. This may occur

in conjunction with annual negotiations.

Other retailers demand ninety days

advance notice. Sometimes “borderline”

brands encounter customers who simply

refuse to accept price increases.

Ultimately, this puts tremendous pressure

on distributors who may be facing price

increases from multiple suppliers.

What’s Fair? – Peg Rate

I advocate a model where currency

is pegged to an exchange rate at the

beginning of the year. Distributor and

brand owner agree to “swallow” price

swings of the five percent in either direction

of the peg. If the currency breaches five

percent threshold, then both parties review

the formula and assess options.

Bank Rate Versus Distributor Rate

A key metric to investigate is the

distributor exchange rate in his

calculation versus the actual bank

rate. Many distributors seek to insulate

themselves by building in a five to ten

percent protective cushion. Guess what?

If the currency doesn’t move, the

distributor just made an extra five

to ten percent on your brand, starting

from the landed cost line!

Sell in Local Currency

This forces large manufacturers to accept

the risk or benefit. This insulates smaller

distributors who may not enjoy similar

capital reserves as their larger principals.

This approach works especially well with

European brands selling to the USA or

vice versa.

Competitive Activity

Frequently, all category players

experience similar input cost increases

such as raw materials. Competitors may

use the window to hold prices low to

gain market share. Others may eliminate

promotional spending. Ultimately brands

elect a certain price positioning in a

country and should strive to stay within

the desired range.

Document Price Change Rationale

Retailers provide strict challenges to those

requesting price increases. Supply them

with hard facts on costs of raw material,

currency exchange, transportation and

other factors. Retailers with substantial

private label programs face similar

pressures on their own private label,

so they are not blind to the situation.

Watch Credit/Receivables

Distributors pay their suppliers in

advance of receiving payment from

local customers. Distributors invoice in

local currency and wait for repayment.

During periods of currency fluctuation,

the typical sixty day float could result in

a five percent reduction in receivables.

Across a broad portfolio of brands, this

could spell trouble for a distributor.

Run credit reports and monitor days

outstanding trends.

“Helpers” are Heroes

A trusted distributor who has delivered

consistent results is worthy of your help!

In the past, I have witnessed the USA

dollar appreciate more than fifteen

percent versus the Mexican peso and

Canadian dollar. Best approach is for

both partners to “roll up their sleeves”

and engage in an open discussion around

transparent examination of the facts.

Distributors are entitled to a reasonable

profit. A manufacturer who helps absorb

the pain during a “currency crisis” will

be remembered as a true partner when

the situation stabilizes.

Currency Exchange – Tough Tactics for Tumultuous Times

Slotting allowances, listing fees or as the Irish say “Hello”

money are all real estate rental fees charged in advance by

retailers for access to their limited shelf space. Many retailers

assign their buyers “budgets” for this type of incremental fee

income. Store owners seek to obtain maximum productivity

from each shelf facing and fixed entry fees are a tactic to gain

immediate income from new products without an established

sales history. At the end of the day, it’s a cost of doing

business. Our objective is to allocate as little money as

possible to listing fees to redirect our investments to

consumer awareness and trial generating activities.

Recapped below are Export Solutions’ Ten Tips on

minimizing listing fee payments.

1. Exclusivity

Some large retailers will waive listing fees in order to achieve

first in the market status with an exclusivity arrangement.

Normally, this extends for three to six months. Beware, you

may upset other customers who become “locked out” during

the exclusivity period.

2. Pay Fees Over One Year

This approach reduces your initial outlay and also increases

the likelihood that the retailer will keep your product on

the shelf for at least one year. This may also allow you to

structure the payment as a percent of case cost versus a

“lump sum” payment.

3. Free Goods

Our net cost of “Free Goods” may range from 30-50% of a

product’s retail price to the consumer. The retailer recoups

his listing fee when the product is sold. Some retailers are

hesitant to accept this option, as a slow moving brand may

force him to wait to receive his money.

4. Approach “Non-Slotting” Fee Retailers First

Every country includes retailers and channels that do not

demand slotting fees. Create a success story with these

customers first. Your track record may validate the larger

investment in paying the fees at a bigger account or success

may help you negotiate more favorable terms.

5. Create “All Inclusive” Annual Plan

Ultimately, the retailer has many “profit centers” to reach

their internal financial targets. Customers respect a solid,

year one plan, with investments in their other programs like

advertising, sampling, shelf rental and display. You may

secure your product listings as part of your annual agreement.

6. Negotiate Reductions – Multiple Items

My experience is that many retailers have published standard

prices for listing fees. However, net payment often depends

on your distributor’s clout. Big distributors, representing

multinational’s and a wide variety of brands know the

difference between what is requested and what is really paid

on high profile brand launches where the retailer needs the

new brand to be competitive. The most frequent “discount” is

receiving a reduced fee for multiple items: example, paying a

full listing fee on first two items and receiving authorization

for two extra items as part of a group listing.

7. Retailer Entertainment

Most countries still permit buyers to socialize with suppliers.

The cost of a few tickets to a high profile sporting event is far less

than most listing fees. A VIP plane trip to view your factory or

your category in a “resort” country is another way to gain access

to the shelves without writing a big check.

8. Higher Everyday Margin

Total category margin is a key assessment metric for most buyers.

Some may consider a lower listing fee, if your brand delivers a

margin higher than the category average.

9. Distributor Contribution

Some “hungry” distributors may cover or co-fund listing fees.

There are options to “case rate” fixed fees into the distributor

margin calculation. Ultimately, distributors benefit from increased

sales and margin contribution from a new product listing.

However, many are reluctant due to short term contracts. Most

maintain policies related to brand owners retaining 100 percent

responsibility for listing fees and consumer marketing activities.

10. Beg! Claim Poverty

Buyers are human and realists too. They may “bend” in their

demands if they like your brand and know that you represent

a small company. Long term distributors can request the

occasional “favor” from a friendly buyer. Most retailers have

programs to provide “low cost” chances to entrepreneurial

new or local suppliers.

Ten Tips: How to Minimize Listing Fee Payments

Create Your Own

Export Library

All Guides available free at

www.exportsolutions.com

in the Export Tips section.

Distributor Search Guide

Export Handbook

Selling to USA Handbook

Distributor Management Guide

Finance & Logistics

Export Treasure Chest

My Favorite Templates & Forms

People Power

Strong Teams Build Great Brands

Pricing is a critical element of our marketing strategy.

The “calculation” defines all pricing inputs from a designated

port to the retail store shelves. Brand owners and distributors

invest significant energy developing a pricing model during

initial negotiations. My experience reveals that the calculation

tends to drift over time, fluctuating from the original guidelines.

This is natural, given changes in cost to serve inputs. However,

the calculation represents a fundamental ingredient to brand

success. Brand owners should review current models to ensure

an understanding of pricing for each country.

1. Do you possess your current pricing calculation from each market?

Many brand owners do not have current price calculations.

In some cases, distributors are reluctant to share them. The price

calculation, with suggested retail price, should be matched with

a retail price survey. This will allow you to compare (not control!)

the official model with “retail reality.”

2. What inputs are included in the price calculation? Any extra costs?

There are no standard price calculation models, even within

the same country. All distributors employ unique methodologies.

The key is to understand what is included and what inputs are not

included. You will also need to request definitions for some line

items. For example, financing in one model could be based upon

a Bill of Lading date in one scenario and delivery date in another.

3. What services are included in the Distributor Margin?

A financially healthy distributor is a good partner. Distributors

are entitled to fair compensation for their work on your brand.

It’s critical to understand what services are included in a

distributor margin. For example, in some scenarios, a distributor

offers a flat, “all inclusive” margin. In others, they may offer a

lower margin, but add an “admin” fee or profit allocation in

addition to the distributor margin. Are distributor margins the

same for all products in your portfolio? Does the distributor

margin change if you double or triple your sales?

4. Who pays for Trade Discounts and Promotions?

In many cases, the manufacturer covers 100% of these brand

specific investments. In other models, the costs are covered by

the distributor or split. The key is to understand who is

responsible and what is the planned investment. There is a big

difference in a distributor funding 1-2 small promotions per year

and funding monthly, high value, deep discount promotions.

5. How are price increases managed?

Price increases are a common activity in our business.

Manufacturers need to adjust prices to reflect fluctuations in raw

material costs, promotional support, and competitive activity.

Manufacturers should understand that some distributors act

as “single vendors” to a retailer. In some cases, distributors can

only implement pricing actions once per year. In other cases,

distributors may apply price increases (or decreases) against all

the brands in their portfolio.

6. How do you handle Currency Fluctuation?

This represents a critical point in certain countries and at times

emerges as an issue with worldwide implications. For example,

the euro/dollar exchange rate has fluctuated from .83 to 1.60,

settling around 1.12 as of today.

Six Questions Regarding your Distributor Pricing Calculation

Looking for Good Distributors?

Export Solutions’ database covers

9,200 distributors in 96 countries.

www.exportsolutions.com

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Distributor Database Coverage

Confectionery & Snack:

2,713 Distributors

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1,691 Distributors

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3,276 Distributors

USA Importer/Distributor

598 Distributors

Middle East

937 Distributors

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2,030 Distributors

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1,574 Distributors

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3,139 Distributors

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“Spend time Selling to Distributors versus Searching for Distributors”

Australia – 274 Distributors

China – 160 Distributors

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India – 109 Distributors

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Japan – 176 Distributors

Korea – 146 Distributors

Malaysia – 128 Distributors

Philippines – 109 Distributors

Singapore – 163 Distributors

Thailand – 94 Distributors

Vietnam – 49 Distributors

Israel – 61 Distributors

Saudi Arabia – 115 Distributors

U.A.E. – 195 Distributors

South Africa – 106 Distributors

Plus 14 more countries

Austria – 68 Distributors

Belgium – 85 Distributors

Croatia – 78 Distributors

France – 125 Distributors

Germany – 188 Distributors

Greece – 90 Distributors

Hungary – 68 Distributors

Italy – 105 Distributors

Netherlands – 155 Distributors

Poland – 90 Distributors

Russia – 108 Distributors

Spain – 157 Distributors

Sweden – 103 Distributors

Switzerland – 100 Distributors

Turkey – 82 Distributors

U.K. – 274 Distributors

Plus 19 more countries

Argentina – 61 Distributors

Bolivia – 52 Distributors

Brazil – 135 Distributors

Canada – 205 Distributors

Chile – 92 Distributors

Colombia – 82 Distributors

Costa Rica – 73 Distributors

Ecuador – 55 Distributors

Guatemala – 61 Distributors

Mexico – 193 Distributors

Panama – 63 Distributors

Paraguay – 57 Distributors

Peru – 82 Distributors

Uruguay – 52 Distributors

USA – 598 Distributors

Venezuela – 38 Distributors

Plus 14 more countries

Where Do You Want to Grow?

Asia/Africa/Middle East

Europe Americas

Use Export Solutions Database

to fill in the Gaps in your

Export Coverage Map

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Free: 15 Export Guides and 50 Scorecards.
Export Express monthly newsletter dedicated to
Best Practices for international development through
food distributor networks.