Facing the Fear - Changing Agents in China
“Actually, we’ve been with them for years, but they don’t do much for us”.
It’s remarkable how often I’ve heard this response, or something like it, when asking a manufacturer about their agent or distributor in China.
This isn’t a reflection on Chinese distributors of course – far from it! But the frequency of this response is a reflection of how difficult it is, in a market where many western companies understand neither the language, culture, online environment or domestic competition, to identify suitable business partners, work effectively together, and make changes when needed.
Needing help to get out of the "fear trap"
I remember when one British manufacturer asked for our opinion regarding their long-term agent in Beijing. Within a few minutes of discussion, it became clear that no-one currently at the company had ever spoken with or visited this agent. Nor did they know the agent’s web address (we found out that he didn’t have one, nor any social media accounts for marketing, for that matter). Nor had that agent ever shared the names of his customers with them. The company did not feel there was any chance of this situation improving, either.
So why were they still “with” this agent? Two reasons: first, because they were afraid of what would happen if they left him, and second, because they were even less confident now that they could find a good replacement than ever before.
Of course, our preference will be to help you restore a good working relationship with your current distributor if possible - but sometimes you just need to change, or add a new partner to your existing distributor list.
Our proven process - how we search for distributors and agents
Having been through this process successfully, many times, we know how to make it work. We’re confident in our ability to identify good distribution partners and agents in China. Here's how the process we use:
We begin by asking you for a set of criteria – What would make the perfect agent? And what would rule an otherwise good candidate out of the running? We’ll review and refine these initial criteria with you, drawing on our own China business experience.
During this step we take note of your own company’s culture and values – because a good agent or distributor will need to be compatible with you in these ways too, for the relationship to be fruitful and effective.
We start to search, both online in Chinese and through our professional network. We draw up a “longlist” of potential partners, including as much diversity as we can, within your criteria, to help you consider a full range of options. We’re acutely focused on a business really looks to potential customers in China (Do they promote other brands well? Do they look professional? What evidence do they show of being active?), as well as how they will appear to you. The longlist will include basic company information, including web addresses.
You review the the longlist, and narrow the field down to just a few. At the same time, you may find you want to refine your search criteria, and even add or remove requirements.
At this stage we begin more detailed due-diligence checks, still without contacting the candidates. We return a dense one- or two-page report on each, which includes company registration details, director names and shareholdings, related companies, court and IP information, digital profile, and (if publicly available) basic financials.
Equipped with all that information, you're well prepared to start talking with a few candidates. You may choose to do this yourself, or you may prefer we do it for you. Some companies ask us to be part of initial meetings with the candidates (often by video conference, but sometimes in person). We provide a valuable independent "sense check", and insights from our deep China experience. We can also help with deal thorny matters like accurate interpretation, translation, NDAs, discussion around ethical issues, distributor contracts, and so on. In fact, we’ll handle as much or as little of the process as you like.
If you're wishing for a improvement in your China business, let us help you face the fear of change! Contact us today for a free consultation.