Choosing the Right Distributor

Distributor Identification

The Importance of Choosing the Right Distributor/Business Partner

A distributor is your partner in the market.  They are your eyes, ears and in the context of Japan, if they are communicating with you in English, your interpreter.  Note ‘interpreter’ encompasses a lot more than ‘translator’. 

They are your advisors, your company’s promoters and champions, in many cases the representatives and guardians of your brand.  To an enormous degree you entrust your IP, your goodwill and reputational capital to these partners.  And in most cases, you cannot be fully aware of the details of how they are presenting your brand and products in the Japanese market. 

The above also applies incidentally, to the people you directly employ to manage your operations in Japan.  However, you can exercise greater control over their messaging and actions, but only if you are determined to do so.  There are countless examples of representative offices, branches and even wholly owned subsidiaries of foreign companies in Japan who have ‘gone rogue’ and defied head office policies and/or communicated information damaging to the global corporate reputation directly to the market.  These situations mainly result from a lack of attention on the part of the head office.  Busy with other priorities and put off by the difficulty in communicating with the Japan office, head offices tend to rely on the local office for virtually all decisions impacting the business in Japan. 

This can go spectacularly wrong when business critical decisions regarding pricing, regulatory oversight and certification, capex, hiring and firing etc., are left to the local office without proper head office oversight and control.  And the exact same thing applies to your distributors.  Allow them too much control over your operations, your branding and your messaging, either out of neglect or through a lack of vigilance at the contract negotiation stage, and you can find yourself at their mercy, ‘captured’ by a ‘partner’ whose interests diverge in significant ways from your own.

In subsequent articles we will try to outline ways in which you can avoid these pitfalls when choosing a distributor.