The actual process of building channels for international distribution is seldom easy, and many companies have been stopped in their efforts to develop internationals markets by their inability to construct a satisfactory system of channels.
Construction of the middleman network includes seeking out potential middlemen, selecting those who fit the company’s requirements and establishing working relationships with them. In international marketing the channel building process is hardly routine. The closer the company wants to get to the consumer in its channel contact, the larger the sales force required. If a company is content with finding an exclusive importer or selling agent for a given country channel building may not be too difficult however, if it goes down to the level of sub wholesaler or retailer , it is taking on a tremendous task and must have a internal staff capable of supporting such an effort.
The search for prospective middlemen should begin with study of the market and determination of criteria for evaluating middlemen servicing that market. The checklist of criteria differs according tot h type of middlemen being used and the nature of their relationship with the company. Basically such lists are built around four subject areas productivity or volume financial strength managerial stability and capability and the nature and reputation of the business. Emphasis is usually placed on either the actual or potential productivity of the middlemen.
The major problems are locating information to aid in the selection and choice of specific middlemen and discovering middlemen available to handle one’s merchandise. Firms seeking overseas representation should compile a list of middlemen from such sources as the following : the US Department of Commerce; commercially published directories foreign consulates chamber of commerce groups located abroad; other manufacturers producing similar but noncompetitive goods; middlemen associations business publications management consultants carriers – particularly airlines and Internet based services such as Unibex, a global technology services provider. Unibex provides a platform for small to medium sized companies and larger enterprises to collaborate in business to business commerce.
Finding prospective middlemen is less a problem than determining which of them can perform satisfactorily. Low volume or low potential volume hampers most prospects, many are underfinanced and some simply cannot be trusted. In many cases when a manufacturer is not well known abroad, the reputation of the middlemen becomes the reputation of the manufacturer so a poor choice at this point an be devastating,
The screening and selection process itself should include the following actions: an exploratory letter including product information and distributor requirements in the native language sent toe ach prospective middlemen, a follow up to the best respondents for specific information concerning liens handled territory covered , size of firm number of salespeople and other background information check of credit card and references from other clients and customers of the prospective middleman sand if possible personal check of the most promising firms. Obtaining financial information on prospective middlemen has become easier via such internet companies as Unibex which provides access to Dum & Bradstreet and other client information resources.
Experienced exporters suggest that the only way to select a middleman is to go personally to the country and talk to ultimate users of your product to find who they consider to be the best distributors Visit each possible middleman once before selecting the one to represent you; look for one with key person who will take the new product to his or her heart and make it a personal objective to make the sale of that line a success. Further, exporters stress that if you cannot sign one of the two or three customers recommended distributors you might be better off having no distributor in that country because having a worthless on costs you time and money every year and may cut you out when you finally find a good one.