Distributor or direct sales? How to decide when entering a market

It is one of the first questions when going abroad, and it is usually settled by instinct or by the first opportunity that turns up: someone knows a distributor, a client asks for a quote, a fair brings a contact. It is worth thinking it through beforehand, because switching models later is expensive.

What a distributor gives you

Speed and reach. A good distributor already has clients, knows the market, speaks the sector’s language and takes on part of the commercial and financial risk. You can be selling within months, not years. In return you give up margin, control over price and often the direct relationship with the end client. If the distributor doesn’t push your product, you disappear from the market without quite knowing why.

What direct sales give you

Control and learning. You know who buys, why and at what price. Every sale teaches you something about the market, and the brand and relationship are yours. But it takes investment, time and someone on the ground who understands local codes.

Five questions to decide

• How much support does your client need before and after buying?
• Can your margin carry an intermediary?
• How much control do you need over price and brand?
• Do you have the time and budget to build your own presence?
• Are there distributors already selling to your ideal client?

The middle option

Many companies start with a distributor or agent in one region, validate demand and decide later whether their own structure is worth it. Others combine: direct sales to large accounts and distribution for the rest. Validating before scaling avoids the costliest decisions.

The costliest mistakes

• Signing nationwide exclusivity with a distributor who only covers one region.
• Choosing the first one who shows up because they “already have clients”.
• Setting no minimum targets or exit terms.
• Handing over the brand entirely and losing touch with the end client.
• Opening a subsidiary before demand has been validated.

How to choose a distributor

The biggest distributor isn’t always the best. What matters more is that your product matters to them, that their portfolio fits yours and that they share the way you present yourself. A distributor who treats you as one more reference will make you invisible.

• They already sell to your ideal client, without competing with you directly.
• Your product is relevant in their portfolio, not one of many.
• They have sales and technical staff, not just a warehouse.
• They give you visibility on sales and clients.
• Other brands speak well of them.

What to agree from the start

• Territory and, if any, exclusivity and its conditions.
• Minimum targets and what happens if they are missed.
• Prices, margins and discount policy.
• Training, materials and marketing support.
• What information they will share on clients and sales.
• How and when the relationship can end.

What to measure in the first months

Whatever the model, decide beforehand what you will look at to know whether it works: meetings with target clients, quotes sent, first orders, real margin after all costs and the time your team spends. With that data, by month six the decision to continue, adjust or change model stops being a hunch.

The contract is your lawyer’s job. The strategy inside it, and the preparation to negotiate it, is what decides whether the entry works.