Essential Fact of the Month: Selecting the Best Channel

Marketplace investigation
When selecting the most suitable channel for distribution, the exporter should, initially, avoid distributors entirely and investigate the marketplace. Channels can then be selected by working backwards from the customer (end-user).

The two main questions to answer are:

Who are the customers? 
Customers are those who will ultimately use your product, the ‘end-users’.
In most cases a host of intermediary ‘customers’ will be encountered before
arriving at the end-user:

• wholesalers
• retailers
• manufacturers’ representatives
• system engineers
• consultants
• opinion leaders

All the above are ‘customers’ who require as much time, effort and selling skill, for success, as the actual end-user.

Why approach the customer first? 
The customers ultimately decide a product’s fate. Also, it is the end-user’s
purchasing habits which will define the requirements of the distribution
channel. It is the customers who shape the channel and determine the tides
and idiosyncrasies of the exporter’s business. For this reason customers
must be approached before selection of either the distribution channel or
the partners and dealers who will be part of the network.

Taking the time to research the market and poll the end-users before
choosing a channel or distributor greatly enhances the chance of export
success. Even in the short term this essential discipline of independent
field research is of paramount importance.