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Start up and smaller sized Med Device companies, how are/did you identifying international distributors?
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As originally asked by Aditya Kotta.
What was your experience with identifying international distributors? In your opinion, what are makers for quality and success? I am in the process of identifying and evaluating potential distributors and welcome any advice regarding the process. Thanks!
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Eric T. Fox
Robert Trinka, MBA
I send letters and emails to assess interest. We exhibit at Medica and US medical device meetings that distributors from other countries attend. We find prospective distributors at these meetings. I discuss with them about their company, number of sales people, etc. I do travel to countries to interview the distributors, go to their office, etc (not to all of the distributors that I have hired, but to most in Europe, the Americas, some in Asia-Pacific). It is difficult to judge their ability from email alone. In many countries, especially outside of Europe, there are many levels of distributors. One distributor will import a product, then have ‘sub distributors’ in other cities/parts of the country. The result is that there are several ‘hands’ and mark-ups on your product.
Product registration in most countries is required. US manufactured products require FDA, CE Marking is helpful, requried for sales in the EU and other countries. Medical Devices usually must be registered in order to sell in a country. Distributors know the requirements.
It’s a very imperfect process. If a distributor doesn’t ‘take hold’ within 6 months and make good progress in selling my products, I look for another. I expect progress, timelines, objectives attained, etc.
Todd Staples, MBA
Remember, if you approach distributors with the attitude that you are desperately seeking someone to carry your product, the response will be caution from a distributor most of the time. The biggest red flag for me is the “no risk” distributors that want exclusive everything, but don’t want to extend any risk whatsoever. If a partner sees real opportunity, and they are confident in their own team and have good pricing, they should be willing to take on some risk. When I hire a distributor I am taking on risk, so it should be shared on both sides.
Lastly, never forget that negotiating a contract is an art. Like a good legal drama on TV where lawyers argue points in a courtroom, you have to make your case to justify your terms, and allow for the other party to make points of their own and negotiate certain points. Sitting across from a potential partner who just complains about proposed terms or has a tantrum over one particular point on the contract will probably not be so great at conflict resolution when dealing with their own customers.
@Doug Day Having contacts and a legitimate looking website is great, but I think with ease the internet provides these days, it is very simple for smaller distributors to look more advanced than they actually are.
@ Kenneth Bassestt Good Questions. I try to give them the opportunity first to see how they can make our device fit their plan and approach. If they aren’t asking me the right questions, they strike as the type who are just looking to add to their arsenal of devices instead of looking to promote and push.
Thus far, I have been relying on the internet to search for companies, do any of you have suggestions for networks to use, something like an Angie’s List for distributors?
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