Sandra Crone is the business manager of natural products company Forest Herbs Research, which specialises in health products made from the native plant Horopito, marketed under the brand Kolorex. The Nelson-based company has a team of four, and around 85 per cent of its business comes from offshore.
What offshore markets are you in?
Kolorex is available in the US, Australia, Italy, the UK, Singapore, South Africa, Holland, Dubai and Slovenia and we only sell through distributors in those countries. We're a very small company, so we do rely on distributors.
How has the company found those distributors?
A lot of potential distributors actually find us because they have an interest in the area or condition we have products in. They've either found us by searching online, seen us at a trade fair, through word of mouth or via one of our existing distributors.
We have a system whereby if anyone successfully introduces us to distributor there's a financial incentive/reward.
I'm also often researching companies, mostly online, that sell products that are complementary to ours and those companies are often doing the same thing - looking for complementary products to enhance and support their range.
We also launched a good website two years ago, where people can note their interest in becoming a distributor. Obviously you have to vet those quite carefully; lots of people think it might be a cool idea, but they have to prove they're successful in those channels.
How do you vet potential distributors?
The first thing is to find out more about their company. We look at their expertise, what channels they are good in and why, and their track record. A good place to start is just looking at their website and looking for credibility in their field, but it's really about communicating, over a period of time, about what can they offer, what they will put into marketing and overall supporting our products. Another aspect is their ability to address any regulations that exist in that particular market.
We also look at the questions they ask us - it's a two-way thing; we want to know 'why do they want to represent our products?' Initially a lot of that communication happens by email, then telephone and sometimes it's face to face, but we don't do a lot of the latter because we're a small company and it's expensive.
And we always have safeguards. For the first order, for example, they have to pay 100% up front. That gauges their seriousness, as well as the quantity of product they order.
Have you had any bad experiences in this area?
I wouldn't say I've had any bad experiences, but I did spend quite a few months developing one relationship that just disappeared and I never found out why. Those experiences are quite frustrating because not only do you wonder what went wrong but you've also invested a lot of time. That is going to happen sometimes, though - it's the nature of the game.
What advice would you have for other small businesses looking to find distributors offshore?
A lot of it is about having the right processes in place and asking the right questions, but part of it is a gut feel. It's just like any relationship - if something doesn't feel right then find out why and test those waters.
But also keep an open mind. Sometimes something will come out of leftfield, which you could tend to ignore but it actually could be a good opportunity. Other cultures and countries might have different ways of conducting business - business opportunities come in different shapes and forms - so you need to be astute, but also open to approaching things differently to what you are used to.