Going with the big, established distributor isn’t always the best strategy. Relationships matter, but not always like you think. Jokari, a U.S. manufacturer of kitchen and household gadgets along with storage and organization products, utilized a large, established distributor in Japan and enjoyed some success. When three key executives of the distributor decided to leave and start their own distribution company, there was a tough decision to make. At the time, I was acting president and CEO at Jokari/U.S., Inc., and so I was right in the flow of the decision.
Staying with the large, established distributor was the safe thing to do. Or we could go with the startup distributor created with the three executives, Aozora. That was a riskier choice! We had worked closely with the three executives at the large distributor, and had a good relationship with them, but going forward they would not have the resources at their disposal to get, and keep, distribution at key retailers.
We decided to go with the new distributor based on their collective knowledge of our products, our personal relationship with them, and our belief in their ability to keep our current distribution in place and expand our distribution to additional retailers. After notifying our existing distributor of our decision, the chairman promptly paid us a visit in the U.S. to persuade us we were making a mistake. Despite this pressure, we followed through on our commitment to Aozora.
From then on, we enjoyed many years of a successful partnership with Aozora, and we watched our distribution grow in the Japanese market. This somewhat risky and difficult decision ended up working out. The process and result are testimony to the importance of developing personal relationships with your international partners.
Pace Solutions International has more than 30 years of experience developing global distribution networks for a variety of consumer products. PSI helps companies grow their top and bottom line revenue by taking their products to international markets. Together with its clients, PSI develops an export plan determining which products and which countries offer the greatest opportunities to generate quick results. PSI covers key retail channels, including food, drug, mass, hardware, department stores, specialty stores and gift stores. Pace Solutions International is a member of Global Chamber.
Doug Taekens is with Pace Solutions International