Global marketing
Your distributor’s first order is not customer demand
By Prof. Alessandro Buffoli, PhD
A shipment can make an export launch look successful while the product sits in a warehouse. Ask for a different set of numbers.
A distributor orders 10,000 units. The export team celebrates. Three months later, the distributor asks for a discount on the next shipment because the first one has barely moved.
This is a hypothetical launch, but it captures a distinction I would insist on in an international marketing plan: a company agreeing to hold your stock is different from customers choosing to buy it.
The first order answers a question about the distributor. It tells you something about its expectations, incentives and willingness to commit cash. It cannot, by itself, tell you whether the intended customer understands the product or considers it worth the retail price.
Follow the stock past the warehouse
Suppose those 10,000 units were intended for 50 shops. Before discussing another country, I would want to know how many shops actually received the product, when it reached the shelf, and how much each shop sold per week. Ten weeks in a warehouse and ten weeks on a shelf are different tests.
A single national sales figure can hide the useful result. Perhaps five shops are selling well because they serve the right customer. Perhaps the product is displayed beside the wrong alternatives everywhere else. Perhaps half the shops never received the staff explanation that made the original pitch convincing.
Those possibilities call for different responses. A blanket discount can make all three harder to diagnose.
I would agree on a simple weekly report before the first shipment: opening stock, deliveries to stores, sales to customers, closing stock and returns. Keep track of the retail price and any promotion alongside it. The point is to see where movement stops, not to create a report nobody reads.
Give exclusivity something to depend on
My commercial preference would be to connect any proposed exclusivity to observable progress: suitable outlets reached, agreed launch work completed, usable sales reporting and a review date. The eventual contract needs to reflect the actual relationship and local requirements. But the marketing team should first be clear about what progress means.
I would also separate a distributor’s reorder from a customer’s repeat purchase. The distributor may reorder to secure a volume rebate. A shopper may have bought once because of a promotion. Neither automatically establishes a dependable market.
The promising launch is the one in which the business can explain who is buying, from which outlet, at what price, and why stock needs replacing. Another container is a consequence of that evidence. It should not be the evidence itself.
Prof. Alessandro Buffoli, PhD
Assistant Professor of Marketing at The Hang Seng University of Hong Kong.