What you should consider when selecting a distributor in Africa?

Entering into a new market is always a challenge for any company. One way to reduce the burden is to use local distributors.

Entering into a new market is always a challenge for any company. One way to reduce the burden is to use local distributors. Nevertheless, the decision to select a distributor shall not be based on simple opportunity but based on a clear strategy and expectations.

1. Be clear on what you expect

Finding a distributor in a foreign market is one of the most strategic decision a company can make as it has such a large impact on your business and growth developments. Take the time to assess exactly your needs and be clear about what is expected from your  distributor. 

 

2. Select the right distribution strategy for your business

Two options are available to you: 

  • End-to-end distribution with the distributor taking care of everything,
  • Last mile distribution which can be very costly

In both situations, the number of partners and the internal resources needed to support your distribution strategy will vary. 

 

3. Marketing support

Some partners will only be able to push your products into retail but lack the resources to support any brand development. In such a case, you will need to consider allocating some marketing budget to support your partner and create a brand development. trade your products but lack the resources to push  to position correctly your product. 

4. Distribution agreement

In order for your partnership to succeed, be clear on the targets, incentives and margins expected. In addition, you will need to consider the following elements: 

  • Are you looking for an exclusive or shared distributor partnership. In an exclusive partnership, your distributor will not be able to stock any competitors products. To be feasible, an exclusive partnership will require that both parties have scaled largely before considering this option.
5. Assets

Be careful not to forget to ask about your partner’s infrastructures as this will have an impact on the margins of your product. In the event where your partner does not have such infrastructures, you will need to develop your own infrastructures which can be costly and take time. Verify that your distributor has the infrastructure to support the distribution of your product. 

 

6. Assess your partner’s network

As with any distributor, it is important to know if your partner has a large distribution network.