Foreign manufactures which come to Germany for the first time are often surprised about the various company structures when compared with their own country. While in other countries franchise systems or multiple-branch organizations are the dominant dealer structure, in Germany you find something called the German “Mittelstand”. These small and medium enterprises (SMEs) are the typical distribution system: owner-led, independent, 5-100 staff members. Indeed, sometimes they are even organized in sales alliance groups, but usually with their own, individual IT system, accountancy and sales strategy.
So, if foreign manufacturers plan to take the German market by storm using established dealer channels, they have to talk to a lot of people in a lot of different companies instead of just one set of negotiations with one manager responsible for a dozen branches. To win a German dealer as a partner and to develop your own dealer network, the following 4 rules are very helpful:
- Show the dealer that you accept and respect her/his independence – this is of great importance to the dealer’s self-esteem. Don’t say how good it would be to be a part of a bigger dealer organization. If the dealer had liked this idea – she/he would have done it before. We, cm&p, know how to talk to dealers and can help you to address them in a correct and proper manner.
- Help them to integrate quickly into your sales organization by providing support and information about your products. Support can also be sales training or simply a manual for the right signalization of your products. The more you help, the more they will work for you. We know just what (kind of details) the dealer is looking for.
- A key factor in winning a German dealer is a very good after-sales concept. First you have to sell yourself and your ideas to the owner. But after signing the contract, you have to persuade the after-sales manager and/or the staff members in the office. Since most of these persons don’t speak foreign languages, you will need to prepare the people in your company to answer in English or – much better – in German. Ask us for more information about a suitable after-sales approach here in Germany.
- If the dealer needs a big stock of your products, you will have to deliver financial solutions for the dealer. Hence, it is important to talk with specialized German banks before you talk to the dealer. We know these banks and can help you to find the best programs to help financing your products.
These 4 rules are fundamental to getting into the German market. If you are interested in more specific information about this quite unique market, feel free to give us a call or send us an email at any time.