Assessing the Quality of Intermediaries

  • • Range and Depth of Distribution Network
  • • Relevance to target consumer demographic
  • • Length of time distributor has been established
  • • History on quality of service provided (is there quality service mark)
  • • If distributor is distributing a similar or analogous range of products or services
  • • Financial stability and payment terms vs. market benchmarks
  • • Fit with existing product/service portfolio and categories
  • • Capacity to give sufficient time to new product/service ranges
  • • Seeking recommendations from others using their services

Selection and Engagement

You are as much selling your product/service to the distributor as they are selling their service to the you, as such firms should:

  • • Develop a simple product sheet with target market, portfolio, pricing, and key benefits vs. competition – value proposition. What is your USP – Pitch deck
  • • Identify the most appropriate and effective channels through which the distributor can be contacted
  • • Draft a sample outreach emails, written in the appropriate business language and using the specific business terms
  • • Outline sample questions and a draft agenda for initial interviews and meetings
  • • Identify potential conflicts, including competing products or services
  • • Have a clear understanding of pre-transaction risk and conduct online research, due diligence and reputational screening of potential distributors in order to minimize these risk
  • • Engage a lawyer to draft a contract including payment arrangements to ensure all legal requirements are met, in order to mitigate risks in dealing with the distributor. Some distributors may already have a standard contract which should also be vetted