The Three Most Important Considerations When Appointing a Distributor in Singapore
Written by: Will Gordon, Commercial Director at Incite
Singapore presents great opportunities for food and beverage brands, but with only a small number of retail banners dominating the grocery landscape in Singapore, surviving and growing in the Singapore market requires a strong collaboration between brands and their local importers and distributors. When appointing a local partner, there are many factors to consider and Will Gordon, Commercial Director at Incite, shares his top three.
Strong Existing Buyer Relationships
A successful distributor will ‘hold the keys’ for the conversations with the category managers at major retailers. These relationships are essential for generating initial interest in a new product listing proposition and progressing to the negotiation phase before closing a deal. Conducting thorough due diligence is recommended to ensure that these relationships and networks exist before appointing an in-market partner. It's important to note that distributors may specialise in different sub-sectors such as premium, mass market, or convenience, and have special relationships with a particular retail banner, so aligning these strengths with the brand is key.
Distributor’s Knowledge and Experience
Prior experience representing food and beverage brands in a given category is crucial when considering distributors. Evaluate the distributor's portfolio and assess their success in distributing, marketing, and merchandising similar products in the local market. Becoming the test case for a distributor would be time and money wasted. Aim to establish a long-term partnership based on mutual trust, transparency, and shared business objectives. Regular communication and collaboration are key to sustaining a successful distributorship. In addition, ensure that the distributor's sales team is knowledgeable about your products and can effectively communicate their features, benefits, and usage to customers.
Investment in Listings
Singapore operates as a 'pay-to-play' market, where listing fees constitute a significant portion of upfront setup costs. However, once a product is on the shelf, retailers expect to see offtakes matching the original business case. Implementing a solid advertising and promotion plan is vital for driving early stage awareness and momentum. An in-market partner should be capable of outlining and executing such a plan to capitalise on the various levers available. A reputable distributor should understand the importance of sampling, price-off promotions, and digital activities. It's common for both the principal and distributor to share these costs, and clear communication on expectations regarding this aspect should be established from the outset.
The best and brightest distributors do not send cold emails, they are busy and need to be courted. I recommend targeting as many high potential distributors in the market as possible and appoint the leading candidate based on the strength of the business plan they put forward.