DISTRIBUTOR
Distributors have established channels that allow Swedish companies to access various local and specific markets in Canada. They purchase goods directly from suppliers and arrange warehousing and storage. This option of entering into the Canadian market can have various benefits including:
No Overhead: A distributor will take care of the hiring, managing, payment, and optimization of its channel. Your company is essentially outsourcing the operations of distribution to the distributor, while they handle the maintenance.
Established Channel with Local Knowledge: Distributors will already know all the laws and customs of the market you're intending to enter.
Understand Pricing and Purchasing Power of Market: Besides knowledge of the laws and customs, distributors will also have knowledge about the most successful ways to price and market your product locally.
Cost Effective: Since your company will not have to pay the items listed above, the distributor relationships are much more feasible for small businesses trying to enter a new market and become established.
There can be downsides that exist with using a distributor, however these can be minimized by establishing a good relationship with the distributor:
Not your company’s personnel: You won’t have as much control over the sales process. You can manage the risk by establishing early on a transparent relationship with updates and feedback from both sides to ensure the relationship early on is going as expected.
Distributors represent many other companies and products: The distributor may not consider you the top priority at any given time, and you want to be sure your product is not being neglected. A well-established relationship with constant contact will ensure that your product is getting the attention it deserves.
Not a "turn key" solution: Relationship management is essential as it is not advisable to just give your distributor the product and hope for success. Helping your distributor by providing product details catered to their specific market and product knowledge will help their sales team. Although it can take some time to have your product successfully distributed, it is less costly than trying to install a direct sales team from scratch.
