Recently I was talking to an entrepreneur about international product distribution. The company already had a few clients overseas, mainly in the UK and Western Europe, and was looking for ways to proactively grow the base. To date, customers had come in as inbound leads from regular marketing campaigns. Here are a few considerations when thinking about international product distribution:
- It is expensive to open a physical office and staff it with management, sales, marketing, and support.
- Plenty of international companies specialize in reselling products, especially from American software companies, and are a good starting point.
- If the international partner does product support, expect to do a more aggressive revenue split along the lines of 50/50 instead of the usually 10%-30%.
- Look to sign up at least 10 international clients on your own to better understand any details or nuances of customers in foreign companies.
- Product support including hours of operation become a much tougher issue with international clients.
I think international expansion is a great way to grow but should be taken slowly unless you are already a $10MM – $20MM business and have the resources to make a major push.
What else? What are some other considerations for international product distribution?