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10 Criteria for Vetting a Global Distribution Partner

10 Criteria for Vetting a Global Distribution Partner

By Argo Tech LLC., a wholly owned subsidiary of Argo Turboserve Corporation

When you are targeting increased revenue and profits and your company is ready to sell products in international markets, one of the better options you have is to leverage the expertise of an international distributor and partner with them for quick results.

The selection process to find the right distribution partner is your first and most critical step. Since there are several distribution organizations operating globally, the challenge is to evaluate who would add the most value to your organization and meet your key objectives of business growth, in an ethical manner.

We have outlined 10 critical criteria to evaluate during the vetting process.

10 Considerations to Find an International Distribution Partner

1. Compliance with international shipping and trade regulations

A partner must demonstrate a clear understanding of international shipping and trade banking rules and documentation requirements. They should be able to ship globally and manage all export documentation formalities.

2. Winning tenders

Tenders are increasingly competitive. A global distribution partner should demonstrate success in winning tenders in your target markets, and exhibit a comprehensive understanding on how to navigate through the local tender processes. They should have excellent relationship with the local customers and should be able to bring to you new opportunities even before a tender is published.

3. Work in local currency

The ability to do business in local currency improves the probability of winning, and the international distribution partner can help mitigate any foreign exchange risk.

4. An established local sales force

A properly trained and aggressive local sales force is a competitive asset. Your partner will have local relationships, a strong understanding of local markets—that includes cultural and business norms—and be capable of conducting business in the local language. Combined, these attributes help improve the sales cycle time.

5. Experienced with the U.S. Foreign Corrupt Practices Act

A distribution partner should be readily able to demonstrate compliance with the U.S. FCPA. This is a must. Experience with the FCPA will minimize risk—risk of prosecution, risk to the company brand—and will reinforce your company’s intention to maintain the highest levels of integrity.

6. Inventory management

A global distribution partner will be fully experienced in managing inventory stock, and related managerial responsibilities.

7. Emerging trends and awareness

Check to see that your partner can demonstrate examples of their market feedback processes to keep you apprised of local market intelligence and trends in a timely manner; and to improve your response to competitive actions. A good partner will be watchful for others who may infringe on your trademark and patents.

8. Control of critical capabilities

A true partner will demonstrate the strategic value add capability of sourcing, and integrating local services when and where they are needed by customers. This will increase the chances of closing orders.

9. Technological expertise

Your partner should provide metrics and reporting on the application of technology that is used to manage your goods and conform with your customers’ requirements. Reporting should include appropriate performance scorecards, using key performance indicators.

10. Corporate ethos

The values of your global partner should be fully endorsed by their business references.

Selecting the right partner to represent your company in a foreign market is vital to your success. It’s important to get it right from the start. Once you are established in a local market, it may be difficult to change inappropriate partners and distribution structures.

For more about a partnership with ArgoTech’s global distribution services click here.

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