Dealer network. Agent network.
How and where to find dealers and agents? What will allow dealers to quickly be involved in a business and expand the network? How to organize the work with dealers and agents? How to set up and coordinate a dealer or an agent network? Get the answers to these and many other questions within this article.
What is the difference between an agent and a dealer?
An agent is a private entrepreneur or individual who privately promotes products of a manufacturer or dealer, attracts customers and gets commissions from sales. The agent gets a smaller share of sales, unlike a dealer.
A dealer is a company or a private entrepreneur who sells the manufacturer’s products in bulk or at retail via its retail chain of stores or sells the products to other stores, wholesalers, and also builds an agent network of sellers. A dealer can act both on its own behalf and on behalf of the manufacturer, it depends on how the parties agree. Also, a dealer can have a significant share of sales.
Why you should build a dealer or an agent network?
You can, of course, build your own sales department and engage in direct sales. You can also build your own representative offices and branches in different countries. But it requires huge resources.
An effective way is to launch a wholesale online store and develop a dealer network. Why is it advantageous to build a dealer network? The answer is obvious: The dealer will invest resources and will do the same work as you if you set up your office.
For example, many auto manufacturers sell their cars through a built network of dealers, even software products are also promoted via networks of partners. Kaspersky Lab, 1C or Microsoft practically do not directly sell their products to end users, but operate sales through authorized dealers and agents. And there are a lot of such examples.
Development of the dealer and agent network will allow you to cover large markets with minimal resources and expand sales. The main thing is the availability of a quality product and a network building system.
The Step-by-step instruction of building a dealership
Step 1. Evaluate the cost of running your own office or representative office.
In the first step, it is important for you to put yourself in the dealer’s position and calculate the necessary resources for running the representative office as if it were you who are launching a new business. In this case, you will have:
- Estimated starting costs
- The action plan for the launch of your business
- Answers to dealers’ questions
- Sales strategy to attract potential buyers
- A general plan for business development in a specific region
- Analysis of competitors
Step 2. Build a strategy to cover a new market and make a step by step instruction of running your business
Once you have learned what the dealer should do, and based on this information you can develop a step-by-step plan to enter a new market. If you or your company were engaged in sales, then, based on your experience, you will be able to set the right strategy. A strategy is a word mostly used military and means a general war plan.
Your task is to provide the most detailed document, a kind of ” installation instruction”, for example, for a newly bought fridge. The plan should include all the necessary actions for the successful start of your business in a new market.
Having passed all steps of your instruction, the Dealer should easily get into the business, fully launch the business and successfully develop it, and this will save you a huge amount of time when starting the next representative office.
Step 3. Build a list of potential dealers and agents
How and where to find dealers and agents? Describe your dealer/agent profile in detail, who would be interested in your product or service, who could promote it. Let’s say you supply auto parts and engine oils. So, your products can be of interest to car repair shops with their own database of customers. They can sell your product, in addition to their main business or as a new direction of the business.
It is always better to look for agents and dealers who also work with your target audience and have rich business development experience with these customers. Successful entrepreneurs, without experience in your area, can also become your representative, but they should have a great desire to work in this direction and develop your business.
Step 4. Prepare your proposal for potential dealers and agents
You have determined with whom you are planning to work and prepared a list of potential partners. Now set the conditions for such cooperation. Describe in detail each point, including the required sales plan, the amount of remuneration, as well as other important conditions.
Describe your product. Mention the uniqueness of it, your advantages and why it will be beneficial for dealers/agents to work with you. It is best to draw up a separate document.
Step 5. Conduct a Survey
Communicate with potential partners, conduct a survey, a kind of research, without making any proposals for cooperation so far. So you “explore” the situation and get feedback + ideas for further development.
Talk about your field of activity, share your plans for business development in this region. In the market research, ask your potential partners to answer a few questions. You will get valuable information: find out with which customers and how they work, whether they plan to develop in adjacent directions or to develop new markets, what products and on what terms they would like to promote, etc.
Such a survey will allow you to achieve several goals at once:
- You will become “closer” to your potential representatives, gather up-to-date information about them so you can improve your offer, make it more interesting, taking into account their needs.
- You will establish primary communication and in the future, you can communicate as good friends.
- You can make a favorable first impression and interest your future partners with your proposal.
Step 6. Send emails, run an advertising campaign and contact each potential dealer or agent
Armed with current information, you have improved your own proposal. Now it fully corresponds to the real needs of potential partners. The next step is to send emails to all possible partners.
Contact them a little later. So you not only remind yourself but also find out whether they have reviewed the proposal. Begin negotiations on the launch of a representative office.
Additionally, besides emailing run an advertising campaign to promote your dealership proposal. Inform on the special sites that you are expanding your markets and looking for partners to build networks in a certain region. Launch contextual advertising in Google and Yandex, as well as on the business platform of Qoovee.com, which will allow you to find partners for business around the world.
Step 7. Train your dealers or agents
To successfully promote your product, the dealer must know the features of doing business, as well as study the products in detail. You know your product in all its details, and your task is to teach it to your partners. Prepare training materials for them in a text and video format. Control the process and the result of training, for example, by arranging at the end a kind of exam.
Step 8. Stay connected with your dealers or agents
Your cooperation with dealers and agents is built in the same way as working with sales managers. It is always necessary to maintain communication, give and get feedback on the results of work, constantly train them and control their progress. Always stay in touch – communicate every week at least twice, keep abreast of all the news, arrange regular online conferences, hold a quarterly general meeting of dealers and agents. Get Feedbacks from dealers, it will help improve your product and present it well to the customer.
Collect and send them useful links, not only for business but also for personal growth.
Step 9. Expand Network
Do not stop at the achieved results. Continue to expand markets and dealer network. Of course, increase production capacity. The obvious law of nature: who does not expand that decreases.
We wish you success in building a dealer and agent network!
The article was updated on May 30, 2019