Export Distributor Relationship: Underpricing And Market Risk

Small businesses must forever remain ambitious and full of energy to expand without fear. This is what makes entrepreneurs the cold blooded giant killers they are today. Large multinational corporations are always looking to avoid a full on fight with such professionals. This is of course why they just buy up newly created apps and social media companies the minute they start to outsell them. They also know that you have the guts to go abroad when they do not. Export markets are fully open to the small business owner these days, nothing like the restrictions you had in place just a decade ago. Now, because of logistical services, management software evolutions and competitiveness on an equal footing, you can challenge the big dogs. However where your ship can hit a reef, is not understanding the challenges of your chosen distributor.

You’re fighting this together

If a distributor is bringing your product in to a new nation you’re not operating in, they can see what’s going on, on the ground better than you can. They know the market risks better than you or at least, very often this is the case. Although you may want them to buy more from you, exporting more and more products to their real-world and online stores, you must be patient. They’re taking a big risk by selling a product that the domestic market is not familiar with. It's also a cultural thing as many people will want to buy products that are exclusively made in their country. So, you must make round trips to your export market and discuss how you can help the distributor to increase their sales of your product. Remember, you’re fighting a battle to win over customers, side by side.

Protection from a price gambit

Pricing is of course the hot topic when it comes to exporting. You’re dealing with many factors like currency values, exchange rates, the class of buyer, the purchasing power and confidence of consumers. Not to mention, the domestic economy and competitive pricing against larger companies. However, distributors that want the next best thing might say and offer too much which can end up hurting your business. If they happen to take a pricing gambit and it doesn’t work out, they could end up selling your product for far less than what its actually worth. This hurts your brand in so many ways. To protect yourself from this, create a pricing insurance with the help of this insurtech startup. They have made insurance far easier to use as it's done completely online, you’re always using data analysis and algorithms to price your insurance properly. Therefore when this insurance is made part of the deal that the distributor signs up to when you sign a contract, they can see the logic behind your concerns. 

Distributors are just like you, they want to grow and take out their rivals. Sometimes they can promise you too much and not deliver, which is why you need some kind of pricing insurance to protect your brand. Remember though, they’re taking on a lot of market risk so always be willing to travel and help them understand how they can sell your products more effectively.