Reviewed August 2009.

Mary Holz-Clause
Co-Director, Ag Marketing Resource Center
Iowa State University Extension
mclause@iastate.edu

Below are checklists you can use to help find and evaluate a distributor for your product and a checklist of what to expect from a distributor.

Checklist 1 - Finding a Potential Distributor Partner

• Ask the end users of your products what distributors they prefer to buy from.
• Ask current distributors if they are interested in expanding their territories or know of other distributors who might be available.
• Find out what distributors your competitors are using.
• Identify distributors of allied products.
• Consult directories published by distributor associations by doing a Web or library search.
• Attend meetings and trade shows sponsored by industry associations.
• Place ads in industry trade and association publications.
• Post messages to news groups available on the Internet.

Checklist 2 - Evaluating Potential Distributors

• Financial stability — credit history, timeliness of payments, etc.
• Sales and marketing capabilities — size of outside and inside sales force, ability to generate leads, selling skills, technical competence, etc.
• Sales performance — past sales history for same or similar products.
• Knowledge of the local market — ability to accurately forecast future sales and identify changes in customer needs and expectations.
• Product mix — types of products carried, including competitive, supplementary and complimentary items.
• Growth potential — capability of distributor to keep pace with any anticipated growth in the local market.
• Inventory handling capabilities — warehouse space, ability to track turnover rates and other important statistics.
• Technology capabilities — possession of and familiarity with the technology required to do business together most efficiently.
• Management ability — viewpoint of distributor on human resources, planning, training, financial management, communication, etc.
• Succession planning — arrangements in place to continue the distributorship in case of retirement or death of distributor principal.
• Overall fit — how well your goals, operating philosophies and business practices mesh with those of the distributor.

Checklist 3 - What to Expect from a Distributor

• Maintenance of a well-qualified and well-trained sales force that is familiar with the manufacturer’s products and is skilled in demonstrating the advantages of those products to the customer.
• Commitment of sufficient resources required for aggressive sales and marketing of the manufacturer’s products.
• The best efforts to achieve market share and other sales goals in a specific geographical or other area of responsibility.
• A commitment to stock recommended inventories of products based on the needs of the local market.
• Prompt payment of all financial obligations.
• Prompt communication with the manufacturer regarding changes in the local market and/or distributor’s own business (e.g., changes in management and other personnel, and/or operating policies).
• A level of service that encourages long-term loyalty on the part of customers toward manufacturers and their products.
• Physical facilities and technology necessary to consistently perform the above functions.

Resource
Edward S. Stecki, President, Industrial Performance Group, Inc., Northfield, IL.