Your International Distribution Checklist

5 things you should do when selling your product outside of North America

Written by Andrew Brown & Robert Gold

On this week’s PROFIT BusinessCast, advice for Canadian business leaders looking to expand into global markets from an entrepreneur who has succeeded in doing just that. Greg Patterson is president of Technicraft Product Design, maker of Shutgun, a device that shuts off fire sprinklers fast to avoid water damage. Canadian designed and created (manufactured in China) Shutgun is selling very well outside of North America.

Patterson says the biggest challenge is letting people know that this product exists and that they need it. The best way is to work with distributors you can trust, who know their market well and can understand your product and its fit in that market.

How do you assess them? Ideally, you’ve met them and seen their facilities. But that’s not always possible. Patterson finds Skype just as effective. He also finds that the negotiation process generated by insisting on an extensive written agreement gives you the chance to assess a distributor’s business sense and ethics.

In just three years, Patterson has developed a vast distribution network in markets from Australia to the Middle East to Hong Kong. He’s learned some valuable lessons about dealing with foreign distributors.

His top five tips are:

  1. Partner with someone you can trust and is a fit with your product (they should have the know-how in your industry);
  2. Have a written agreement that lays out exactly the roles of each party and the expectations—”it’s a lot easier to negotiate over a written agreement than it is trying to reverse things after the fact”;
  3. Know the culture and the etiquette of the country that you’re approaching for business;
  4. Keep on top of your distributors, preferable face-to-face (virtually via any number of online chat apps available) and check that the consistency of your brand is being upheld. Your product’s pricing should be set in the written agreement. That, along with look and feel, should be consistent across every market; and
  5. Get paid in advance and if necessary use a letter of credit.

Finally, don’t commit without doing your research. “The biggest surprise to me is the value that various countries put on a life,” says Patterson, who found out that the U.K. and Europe don’t require fire sprinklers where others would. You don’t know that a product selling well in one market will be needed or wanted in others.

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Originally appeared on PROFITguide.com