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5 Things to Consider When Choosing a Distributor

by | Jun 17, 2019

Your choice of distributor can make or break your company’s ability to succeed in the marketplace. You’ll want to know as much as possible about your distributor—about their finances, their team, their business practices, and more—but how do you know where to focus your attention? Your ultimate choices will depend on the needs of your business, but make sure you ask the following key questions before making a decision.

  1. What is their reach?

Can your chosen distributor effectively reach your target market? Consider their geographic reach as well as the diversity of products they offer. Their breadth of knowledge about your specific industry can tell you a lot about their ability to reach your audience. Can they forecast future sales and anticipate customer expectations as they change? You can take it a step further and specifically ask them about their strategy for new product launches.  

  1. What is the process?

It’s possible to get an idea of how you’ll work with a distributor before you start doing business. Ask for an overview of their business practices, operational structure, biographies on their key employees, and their training procedures. Your research should put their supply chain capabilities into focus, making sure they can keep your sales and your costs consistent without any hiccups. You should also find out about their order process, payment process, and the specific contacts who will be working with your company.

  1. Are they financially stable?

A distributor’s finances are a strong indication of their ability to serve you. You’ll want to check on their credit history and financial reputation. You should also ask about the size of their sales force, their ability to generate leads, and their overall sales process and strategies.

  1. Can they effectively sell your product?

This may seem like an obvious question, but there’s more to it. Look at their sales performance, growth, and marketing information. Do they have a strong sales history for similar products? Can they keep up with the pace of growth that you expect to see in your market? It’s also worth noting whether they sell products that supplement or complement your own, and whether they work with your competitors.

  1. Do you get along?

In other words, who are they? Does the distributor’s vision statement match up with your company’s core values? Matching goals, philosophies, and business practices might seem like the icing on the cake, but it’ll have a more substantive effect when you actually start working together. Beyond that, do they seem like they are enthusiastic about your product and genuinely want to get involved with your business?

Before you start doing business, you should have an experienced attorney look over your agreements. The lawyers at the Campbell Law Group are skilled in the fields of contract creation and negotiation. Call us and we’ll help you secure the best possible future for your business.

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