Why your distributor isn't selling your product

The distributor signed. The launch event happened. The product is in the catalog. Six months later, not one order. HQ asks why. The Japan entity says the distributor isn't motivated. They switch distributors, wait another six months, and get the same result.

How to find and sign distributors is in the distributor-network post. This post is about what comes after. Why they don't sell, and how to get them to.

Start with the rep's day

A distributor isn't one entity. It's dozens of sales reps. Each carries a dozen or more brands, sometimes several dozen, and visits three or four customers a day. A customer asks "anything new?" and the rep picks one from memory. He doesn't pick the best product. He picks the easiest one. That's the one he knows and has materials for, the one that won't bring a question he can't answer, and the one he won't get blamed for if it fails.

Your product is tenth in his head. It isn't bad. It's new. He's never sold it, the materials are translated from English, he can't answer technical questions, and he doesn't know who handles support. A product ranked tenth never gets mentioned.

That's all "the distributor isn't motivated" really means. The distributor signed as a company. Each of its reps has no reason to change his habits.

Margin doesn't change the ranking

Most companies react first by raising the margin. Others give 20%, so we'll give 30%. This does almost nothing to the ranking. The rep is paid a salary and an overall commission. If one brand's margin goes up a few points, his monthly income barely moves, and the product is no easier to sell. Margin is for the distributor's owner, who already looked at it when signing.

To change the ranking, make your product the easiest one for the rep to sell. There are three ways to do that.

One: a named owner inside the distributor

Not your person. Theirs. The distributor designates one rep as the owner of your product. Every question about it goes to him first, and he gets an internal incentive that you fund. His real job is to make every other rep think "for this brand, ask him." That alone moves your product up a notch.

Without this person, your product inside the distributor is a rope with no single owner. Dozens of people pull, and each pulls a little less.

Two: ride along on the first ten deals

Reps don't sell what they've never sold. There's one fix. Sell the first few with them. Your person goes on the visit. The rep opens, your person presents, and the rep watches how customer questions get answered. After three to five, he can do it himself. Japanese distributors accept sales ride-alongs readily. It's normal industry practice, so you aren't asking a favor.

Build all materials for those first ten deals around the questions his customers ask. HQ's product manual is the wrong starting point. Japanese, one page, with prices. If he can't hand it straight to a customer, he won't carry it.

Three: release margin in stages

Margin agreed at signing has no signal value by the time it reaches the rep. Tie it to stages. One rate for the first ten deals, another after that, another on hitting the annual target. And make sure part of each step-up flows visibly to the named owner and the rep who closed. If it all lands in the distributor's account, the reps never see it.

This is the same point as Four kinds of relationships. You and the distributor's owner are in a market relationship, where everything converts by ratio. The distributor's reps need something else. They need money they can see, tied to their own actions.

When to switch distributors

It's the distributor's problem only after you've done all three and six months still produce nothing. Then check one thing. Is it putting your product in front of the right layer of customers? As SMEs are 99% of Japanese companies argued, a distributor is a channel to one layer. A distributor whose customers are mostly small shops can't sell a product aimed at mid-sized companies, however hard it tries. Then switching is right, and when you switch, look at the customer layer before the distributor's size.

One case where you shouldn't switch: the distributor is one of the industry's century-old houses holding customers you can't reach around. Keep it even with no orders, but reclassify it from main channel to access channel, and find the main channel elsewhere.

What to do before signing

All three are best written into the contract at signing. That means the named owner and his incentive, the ride-along arrangement for the first ten deals, the staged margin. Raised after signing, they feel like added conditions. The first-hire post argued that the entity's first person shouldn't be a salesperson. The same logic applies here. On the distributor side, the first job is moving your product from tenth into the top three inside one distributor. Finding more distributors can wait.

At your distributor, what's the name of the person who owns your product? If you can't say, the answer is here.