How do you do it? Finding Buyers II
Last post we quickly went over how to locate a place and a specific potential buyer for your products/distributor. This example was rather quick, however repeating it will yield numerous locations and numerous potential buyers/distributors. What do you do now?
The first step is to limit your choices. Yes, its possible that you could sell your products to a buyer/distributor in New York or China but it might be easier to negotiate with a distributor that’s close to you. In this business face to face interactions, and establishing trust, is essential as methods of payment can vary widely. I have found that narrowing your selections to between 3 and 5 is a good start. At least one of these should be local or driving distance from your location.
Second you must research the terms that some of these buyers/distributors are offering. Are they asking for exclusivity? Will they buy from you to keep inventory or just-in-time? In the blueberries example that I used on the previous blog some questions to ask is if the distributor buying my entire crop? If so at what price per pound? What happens if the market price fluctuates? What are my responsibilities in getting the crop to the distributor? Is this a multi-year or yearly contract? The list can go on and on but you get the picture, drill into the details. Many buyers/distributors are shrewd negotiators but these are questions that any sales manager should easily answer. Be smart about creating a deal that is beneficial to both parties.
Finally, this is a continuous process. Just because you close a deal with a buyer or distributor does not mean that your job is done. Immediately start looking for other buyers or distributors. This is key for two reasons; first terms always change and so does the market. If you wait until you have lost a buyer to find another one your bargaining position is not quite as strong. Second, this allows you to focus on your scaling. How many buyers/distributors I can supply? How may do I want to supply? Knowing where your business is and how do you want to scale it is key to having a successful business. As always I look forward to your comments.