Summary: There is a myth that signing up with a master distributor like Ingram Micro of Tech Data for European sales channel distribution is sufficient to generate massive revenues. The fact is, especially in Europe, master distributers are in the logistics business and not in the sales business. Getting signed by a master distributer essentially just gives your product a SKU number in their database and a list of e-mail addresses to their resellers.
The burden is still upon your company to sell your product through. Your company needs to develop and enable distributors on a per country basis, using in-country or regional sales people who meet with them face-to-face and drive the revenue. By ‘enabling’ we mean: you need to create and implement multi-national marketing programs; train their sales people and resellers; train their technical people; join resellers on visits to retailers; etc. You also need to negotiate terms like discounts, RMA, stock, and importing & warehousing (distributors typically want to pick up from a warehouse in Europe, not from Asia).
And you need to repeat all of that for each country. That’s why companies hire SFE for channel sales.
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In Europe, wholesale distributors such as Ingram Micro and Tech Data are managed on a per country basis and make decisions locally. While companies the size of Cisco or Barracuda might have some clout with their distributors, the distributors don’t have the economies of scale to invest in sales efforts for smaller brands that won’t immediately bring them millions in revenue per country. So a distributor may sign you on, but they do little or no work to create demand and push your products out to their resellers and retailers, and they offer no demand creation among end users or business clients. Your company must do all of this work.
Your company needs develop and enable your distributors on a per country basis, using in-country or regional sales people who meet with them face-to-face and drive the revenue. Among the things your company will need to do on your own: you need to create and implement multi-national marketing programs; train their sales people and resellers; train their technical people; join resellers on visits to retailers; etc. You also need to negotiate terms like discounts, RMA, stock, and importing & warehousing (distributors typically want to pick up from a warehouse in Europe, not from Asia).
Resellers (for enterprise software) and retailers (for consumer products) require similar hand holding. Enterprise products are complex, and resellers need to be trained on how your technology works and how to recognize appropriate sales opportunities for it. For consumer products, retailers must be engaged on a per country basis and many even make buying decisions on a per store basis — in some cases working store-by-store to sign retailers across the country. With retailers, enabling means training their on-floor sales staff and their technical support staff, providing localized marketing materials (or online content), making sure that products are appropriately displayed, and managing prices to ensure there is margin for two-tier distribution — especially when retailers are also selling on e-commerce sales like Amazon.
Because the master distributors put the burden of selling onto companies, a cottage industry of ‘specialized distributors’ has sprung up to fill the need. Be careful, however, if a specialized distributor asks for exclusivity and then promises European-wide coverage: usually they don’t have the muscle or investment to develop the entire European market for you, and often their strategy for exclusivity is to keep your product out of the master distributors entirely (and you still need them).
All of the above are the reasons why companies like EyeFi, Nexvap and Tellabs hire Sales Force Europe to drive channel sales and distribution in Europe. We work hand-in-hand with the master distributors managing them at the local level and proactively selling your product or technology through the channel and into our enterprise procurement networks and retail store buyers. Our sales professionals are located in 50 local markets and have relationships with 5000+ distributors, resellers, VARs and retailers. We are meeting our channel contacts every week to proactively sell your company and your product through the distribution system. Give us a call and let us help you.