What Does a Latin American Distributor Expect from a Supplier?

Distributors that have sold products successfully in Latin America, and have endured, share two main characteristics:

1. Good Product
2. Good Service

Having a hot product is not enough to succeed for the long term in the export business. This will assure a high initial demand but not long term success. A high-demand product has to be supported by good service otherwise the supplier will get beat by the competition. Getting the product promptly to the distributor is extremely important since there is a small window of opportunity to sell before the competition reacts and before the knockoffs start to appear. This is why service is crucial for the success of the supplier as well as the distributor.

A supplier should be able to provide the following services:

A Guarantee

All merchandise should be guaranteed against factory defects. To cover faulty merchandise, a credit toward future purchases are usually given to the distributor.

A Fast Reaction to Import

To have the product on the air and on the shelves at the right time is essential in our business. All successful suppliers understand this and respond to document requests promptly and effectively. It’s amazing how often suppliers spend a lot of energy in the selling process and then fail in the export and delivery process. Oftentimes the merchandise arrives too late and the supplier misses the chance for a re-order.

Know-How

Many suppliers are very enthusiastic about selling in Latin America but that is not enough. Before a supplier attempts to export he should learn the ins and outs of the process thoroughly. Each country has very specific import procedures and if a step in the process is overlook or mishandled by the supplier grave consequences can result for the distributor ranging from fines to legal issues related to smuggling charges.

Export and import are to be taken seriously. It seems obvious but we have seen some suppliers approach the issue with carelessness causing the distributor and themselves all kinds of problems. If the supplier doesn’t feel sure about their expertise in exporting they should use the services of a broker or another company that may guide them in the process. The supplier has to be able to report to the distributor the status of the shipment and the related paperwork promptly and accurately. Sometimes suppliers ignore the status of an order or have confusion as to the movement of documents. This is essential to ensure a prompt and trouble-free delivery.

Knowledge about the Market’s Characteristics

Not all countries in Latin America are the same. Not all distributors are the same. Not all import requirements are the same. These facts are often overlooked.

Unfortunately Latin America is still far from a homogeneous market. Each country has its own economy and demand. A minimal knowledge of the market is recommended. To be successful in the region it’s important to have an idea of the market and of the capabilities of the distributor. There are simple but important differences in video and electrical standards. Many times a supplier will spend time and money sending many videos for consideration of the distributor in PAL format when that country works with NTSC. Then the supplier has to send another batch with the proper standard. Many times we have received samples of electrical products for 220 volts when we work with 110 volts. Argentina works with 220v, Chile with 110v and Peru with 220v and they are contiguous countries! To avoid costly mistakes we advise that the supplier do some basic research.

Language

Believe it or not. Some suppliers seem to think that it’s easy for Latin American distributors to translate full length English infomercials. Even some old friends in the industry still find it hard to accept the fact that an English infomercial will hardly be noticed by distributors. The market has matured in such a way that most distributors will only consider infomercials that have been translated into Spanish. Successful distributors usually will fully test an infomercial in the English market and then invest in the translation before they try to market the product. With spots this is not a problem since most distributors are capable of translating them even though in some countries the availability of airtime for spots is quite limited. Sometimes a distributor will translate the infomercial but not the product packaging and instruction manuals. This is very frustrating for the customers and will lower the probability of long term product success. Again, it seems obvious but this is often overlooked. The information contained in the product must be translated into Spanish. I have seen cases of samples that are sent with all the instructions in Korean. In one such case even the controls of an electrical appliance were in Korean and yet the supplier spent money and time sending the samples. The price seemed good but not much else.

Long Term Vision

This characteristic applies here as well as to other businesses. The number of strong distributors in Latin America is small. Sometimes a supplier will focus more on a single sale than in the long term potential of the relationship with the distributor. Sometimes a supplier may sell a product and be unprepared to protect the distributor with an adequate warranty. In Latin America to assure profitable business a supplier has to be prepared to work with the distributor for the long term. If a relation is severed or if the service provided by the supplier is substandard the distributor will think twice about buying again from that supplier and in a market as narrow as the Latin American this is something that a good supplier must avoid. There are excellent suppliers for the Latin American market. Suppliers that have speedy service, handle the paperwork proficiently, support and communicate adequately, provide the goods in a timely manner and that keep their time tables and their commitments. On the other hand there are suppliers that will go as far as make the sale and collect payment and then fail in the speed of delivery, knowledge of the paperwork, and fail to meet timetables and sometimes deadlines critical to the inspection and import process. The market has matured and therefore the expectations of the distributors have been raised. This is good news since it will in most cases force the potential supplier to improve in their overall capabilities to be ability to compete.