Finding a distributor in China is not hard. Finding a good distributor is. There are multiple ways to find Chinese distributors; through trade fairs, referrals, service providers and Chambers of Commerce. However, the key to selecting the right distributor is to ask the right questions. And more importantly, to get those answers verified through due diligence. In this article I’ll explain how we usually select distributors and where you can find Chinese distributors for your products.
Finding the right Chinese distributor for your products
Every technology-based company, whether selling to consumers or businesses, knows how difficult it can be to find a reliable partner for distributing their products abroad. You need to have a partner that understands the specifics of your product, your company, and what differentiates your product from competing alternatives. The challenge is finding a distributor like that in China.
As in other countries, your distributors can be trained to provide customer and technical support to your end customers in China. The difference in China is that service levels are extremely low and a distributor’s in-house expertise is often times insufficient. Hence in order to control your brand you need to find the right partner that is up to the task. Which is hard.
Ok, so where do you find Chinese distributors in the first place? There are a number of ways. Besides referrals from contacts, there are an increasing number of quality trade fairs in China. Here’s a list of trade fairs sorted by industry for you to find something suitable.
Likewise, it’s possible to make contact with your country’s Chambers of Commerce in China who may be able to assist you in searching for distributors. Though this is not always the case and more often than not they refer you to service providers. Take a look at for instance the following Chambers of Commerce:
Keep in mind that chambers of commerce are not professional service providers and miss industry-specific expertise. Hence talk to industry insiders to gain more information and referrals. Or send us an email and we’ll bring you in contact with companies that offer distribution search services.
Another way to find distributors is to simply research which Chinese distributors your competitors are working with. This however doesn’t mean they are a good fit for you or that they are willing to work with you. Finding complimentary products to yours and researching the distributors selling those products could be a better bet. For example, if you’re in the business of selling high-end network cables in the IT industry, it could be interesting to find out which distributors manufacturers of high-end servers use.
10 questions to ask Chinese distributors
Whenever we are considering a distribution partner we start by asking a few basic questions to create a short list. It’s an easy way to eliminate the majority of distributors that are simply not a good fit for our clients or us. Here are 10 example questions to get you started:
- What is their turnover?
- How long have they been in business?
- How many years’ experience do they have in your industry?
- What other products do they carry (in relation to cross-sales)?
- Do they carry other foreign brands? Which ones?
- What are their office locations and which of those represent their main market?
- What kind of staff is present in their office locations?
- What is their level of English?
- Which market segments are they strong in?
- Are they (or have they been) state owned or are they privately owned?
Performing due diligence on your partners
So, now you’ve found distributors, eliminated the wrong ones, selected the right ones, and asked the right questions. Does that mean you’re all ready to go? Not quite yet. The last step before starting to work with any distributor is to conduct due diligence. You want to ensure your distributor is legitimate and is able to fulfil your requirements in terms of, for example, after-sales and technical service. Just to warn you already: you will not find a distributor that offers the same level of after sales service as back home. If offering good service is important to you, then keep it in your own hands and don’t let your distributors handle it.
To get back to due diligence: there are many providers in China that offer due diligence services. Just Google due diligence in China and you’ll find dozens of companies. Just make sure to choose a service provider that has experience in your industry to speed up the search and quickly eliminate bad partners.
Only once you have verified the legitimacy of your distributors you can get down to signing contracts. Without taking the necessary precautions, you are putting yourself at risk of finding a distributor that doesn’t fit with your company, or, even worse, finding an untrustworthy partner.
Photo: Flickr, Walmart
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