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How to Develop an International Distribution Prospectus: A Critical Tool for Exporters

On: September 13, 2021    |    By: Alberto Rodriguez-Baez Alberto Rodriguez-Baez    |    6 min. read

How to Develop an International Distribution Prospectus: A Critical Tool for Exporters | Shipping SolutionsOne of the most useful tools to help select the right international distributors is an International Distributor Screening and Selection Process that helps interested candidates self-qualify or self-disqualify as potential distributors (see my previous article). A critical element of the Screening and Selection Process is the International Distribution Prospectus (IDP).

The IDP plays a central role in the Screening and Selection process. Let’s do a quick recap of the Screening and Selection Process’ first steps: If a candidate completes and sends back the Distribution Inquiry Form (the very first filter in the Screening and Selection process), then the next step is to send them the IDP for review.

The IDP is a tremendously useful tool because you communicate in one concise document the information candidates need to make an informed decision. Let’s explore the benefits of an IDP, what an IDP looks like and how you can develop one.

What are the benefits of having an IDP?

  • Standardized information for candidates: Explaining verbally or writing an email to every candidate explaining the type of distributor you are looking for, their ideal profile, investment level, industry experience, wholesale pricing examples, corporate support, etc. is not only tremendously time consuming, but also leaves room for communication mistakes, misrepresentation of information given to all candidates, and other errors.
  • You don’t have to repeat this information over and over: Without the IDP, you would have to explain this information verbally to every candidate, every time or try to cram all the information into one email, which is not the right channel to communicate the information and pictures that make up a quality IDP.
  • Helps the candidate self-qualify or self-disqualify: In my experience, using an IDP not only keeps you from explaining the same information repeatedly to different candidates, but also provides candidates with the information to make an informed and educated decision to self-disqualify or self-qualify themselves as potential distributors and move on to the next step in the Screening and Selection Process.

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Below is a cover and index page for a made-up company. The index page is a real example from an IDP I developed for a client. I chose it because it is a very good example of what should be included in the contents of a solid IDP.

You can develop an IDP yourself. I created the example below for this article using PowerPoint. However, I recommend having a graphic designer develop the final version. 

How can I develop an IDP?

Use the index above as inspiration to develop your own IDP. The ideal length for the index is just one page. The key is to provide information in each section that will help the candidate understand if this opportunity is a good match.

The sections mentioned below are basic elements for a solid IDP:

1. Welcome

Usually signed by the company president or CEO, it provides a warm invitation to review the prospectus, demonstrates excitement about international expansion and thanks the distribution candidates for their interest in the company’s products.

2. Company History

Company history provides background information on the company’s founder, longevity, growth and present situation. This is the place to showcase the company’s culture, uniqueness, location and any other interesting aspects.

3. Product Overview

Why should potential distributors be excited about the company’s products? What makes the company’s products different/better than competitors’ products? This is explained in this section, which is the place to ensure candidates understand why the company’s products are a better option than other alternatives.

4. Product Lines

The specific product lines available for distribution are showcased here. It’s critical to not only explain what product lines are available for distribution for specific countries/regions, but also to explain what products are included within each product line.

5. Ideal Candidate Profile

Both the exporter and potential distributors need to have a very clear understanding of this section. The exporter should articulate the desired background of an ideal distributor. Some of these aspects include:

  • Industry experience
  • Professional/business background
  • Company size
  • Type of products/brands in the company portfolio
  • Number of products/brands in the company portfolio
  • Previous experience with similar products

6. Requirements

These are must-do actions that potential distributors will commit to to earn exclusive rights to territories/products, if they are selected. For example:

  • Opening X number of stores
  • Carrying a specific level of inventory
  • Meeting annual sales quotas
  • Hiring a dedicated brand manager
  • Reporting activities on an ongoing basis

7. Investment

This section should provide potential distributors with very specific and clear information regarding the type and level of investment needed to successfully launch the brand, penetrate the market and position the brand for long-term success. The figures provided here should focus, at the very least, on the first year. For example, it should include approximate figures regarding:

  • Inventory 
  • Promotional activities
  • Store launches
  • Personnel
  • Specialized equipment

8. Corporate Support

Potential distributors should clearly understand what they can expect from the exporter in regards to operational, promotional, developmental and financial support. The information provided in this section should leave no doubt as to what type of help the exporter will provide and at what cost, if any.

9. Wholesale Pricing Sample

The objective of this section is to provide a general idea of the wholesale prices and volume discounts, if any. It is recommended to show the wholesale prices only for a selection of some of the most popular products, rather than providing all the prices for all products at once.

10. Distributor Testimonials

This is a very powerful element seldom used by exporters in their promotional materials. Include three or four quotes from satisfied distributors from different regions. This shows the potential distributor the excitement and success from current distributors.

11. Next Steps

After reading and analyzing the information in the prospectus, what should potential distributors do if they have questions and/or want to continue in the application process? The answer to this question should be included in this section. At the very least, it should include contact information for the person in charge of international business development at the exporting company. It also should include a short explanation of the distribution application process, as well as the next step for interested candidates.

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Examples of Actual IDPs

Click here to see an IDP I developed for a client. You will see what each section looks like and the information it includes. (Some information was covered for confidentiality.) Here is a second example. 

Using an IDP provides many benefits to you and potential candidates, and most likely you already have most of the information needed to develop a solid IDP. I highly encourage you to consider developing one and add it to your tools for screening and selecting potential distributors. Work on one section at a time, and you will have a solid IDP ready in a few weeks.

Questions to Ponder

  •     What information do you already have to develop an IDP?
  •     What information do you need to compile and write to complete an IDP?

Read the first two articles in this series if you missed them:

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Alberto Rodriguez-Baez

About the Author: Alberto Rodriguez-Baez

Alberto Rodriguez-Baez has spent his entire professional and academic careers in the field of international business development and marketing.

Alberto’s work experience spans from large global corporations to small businesses, private and public organizations, as well as non-profit and for-profit companies.

Alberto earned his MBA at the University of Nebraska. He is also a Certified Global Business Professional (CGBP), a CGBP trainer (the sole trainer in Texas) and a Certified Business Consultant (CBC). He is the International Marketing Manager for TBM Consulting Group.

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