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, another six months, 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 make them.

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. The criterion isn't which product is best. It's which is easiest: the one he knows, has materials for, won't get a question he can't answer about, and won't get blamed for if it fails.

Your product is tenth in his head. Not because it's bad, but because 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 is the entire content of "the distributor isn't motivated." 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' first reaction is more margin: others give 20%, we'll give 30%. This does almost nothing to the ranking. The rep is paid a salary and an overall commission; one brand's margin going up a few points barely moves his monthly income and does nothing for how easy it is. Margin is for the distributor's owner, who already looked at it when signing.

What actually changes the ranking is making your product the easiest one for the rep. Three things.

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 receives an internal incentive you fund. His function is so that every other rep knows "for this brand, ask him," which moves the ease rating up a notch immediately.

Without this person, your product inside the distributor is a rope with no single owner: dozens pulling, each a little less.

Two: ride along on the first ten deals

Reps don't sell what they've never sold. There is one fix: sell the first few with them. Your person goes on the visit; the rep opens, your person presents, 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 industry practice, not a favor you're asking.

All materials for those first ten deals should be built around the questions his customers ask, not around HQ's product manual. 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, not all at once

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, another on hitting the annual target, and make sure part of each step's difference flows visibly to the named owner and the rep who closed, not only to the distributor's account.

This is the same point as Four kinds of relationships: you and the distributor's owner are in a market relationship, converted by ratio. Between you and the distributor's reps, what's needed is money they can see, tied to their own actions.

When to switch distributors

Only after all three are done and six months still produce nothing is it the distributor's problem. 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: 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 the entity's first person shouldn't be a salesperson; the same logic extends here: on the distributor line, the first job isn't finding more distributors, it's moving your product from tenth to the top three inside one.

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