3 reasons why your Japanese distributors are not selling your products
Since you are on our website, you will probably already be doing business with Japanese companies – or maybe in the near future, you plan to work with Japanese companies to help you get started. Unless you grew up in Japan and understand the business culture here in a specific sector, selling products in Japan through distributors has become challenging. Even if you sign a contract, distributors or resellers aren’t going to work for you.
Uniqueness isn’t enough
You probably say, “our product is one-and-only”, “top-notch quality”, “new in the market”, “we are the only one sell this” and etc. Which is why you decided to expand your products to Japan in the first place.
When distributors hear these phrases, what do they think? They do not clearly mention what they are thinking, even if it is negative. However, these are the questions that come to mind. “do they have competitors in Japan”, “does it fit into our customer base”, and “is this really true?”
These days, suppliers have all the research evidence, professional endorsement, and solid case studies tied up with the big companies and government agencies. They are unique, convincing materials, but not strong enough to catch distributors’ attention because with that information, distributors cannot picture the best outcome in their mind.
To understand the distributors, you will want to know a bit more about them. Also, distributors will not be actively engaged with your product.
Background of the distributors
Most of the small and mid-size distributors (SMDs) in Japan have been spun off from large manufacturers or suppliers. They started their own distribution networks during their corporate careers.
This is critically important for understanding where they come from and their existing network distribution channels. Having not understood their background, you are unlikely to make them listen to what you want to present with your proven evidence and case studies.
How distributors compete in the local market
Large and multinational distributors go with volume, while small and mid-size distributors go with small volume. If you do not export dozens of containers to Japan, you basically deal with small and mid-size distributors (SMDs). SMDs want to avoid competing with large distributors because the competition will eventually be all about reducing selling prices, high volume production capacity, and gigantic amounts of marketing spending. No exceptions.
That means you have to have extraordinarily unique selling value propositions, a higher price range, and proven effectiveness of the product for distributors to avoid mass production competition. If you have those elements covered, the information is only applicable to your home country, not Japan. Who knows the market better? Distributors do. That is why you might want to have some flexibility in what distributors have to say about your product.
Healthy relationship
Trading is about colliding professionals from two different countries, suppliers and distributors. Each side has pride and decades of experience, leading to a conversation about who is right or wrong. We have seen this happen countless times, and it ended up being nothing but a harsh experience for traders. The conversation has to be on what each party can do to achieve a successful result, instead of blaming one another.
