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Medical Distributors - A dying breed?

  • By Sascha Winter

There are several medical manufacturers around the world whose mission it is to establish a presence in foreign markets. They usually start with hiring a consultancy, which is conducting a market analysis, looking into several factors that are key for the manufacturer. They might be even traveling to those markets to test the waters locally. They will hold talks with Distributors and evaluate whether it would even make sense to establish a physical and permanent presence in that market.

I am writing from Dubai, which is host of the largest healthcare exhibition in the region (and beyond) and the sheer number of exhibitors participating at the Arab Health only proofs the hunger of getting into the Middle Eastern Market (and using the region as a hub to Africa) the exhibition is constantly booked out, the organizers are even erecting tents outside the area, in order to satisfy the number of participants.

Having spoken to so many of those companies, the takeaway is always the same. To my question “Do you have a presence here” I usually here “Not yet, but we are planning to do so” or “No, but we are looking for distributors” The latter, although a natural reaction, is something I want to highlight here.

Seeing the size of the stands of those distributors, it only tells me that they are doing well. That they are representing a large number of companies and I have to give them Kudos. However, here already lies the problem. They are representing too many companies. Imagine, you are a manufacturer and you want to use a distributor and their sales channels to promote your product. Now imagine that this distributor represents 400 other companies, and perhaps even worse 10 of your competition. Now ask yourself, how well do you think, this distributor will represent you, with what perseverance? What is their reporting system look like? You might receive a monthly report in where it is stated that, so and so many companies have been contacted, so and so many companies are showing interest etc. but let us be clear, this is the best you will get. Are you happy with that? Of course not. The unspoken rule says, that if you pay a little extra, the efforts of promoting your products are becoming more and better. Is that what you think is fair?

I predict, this business model in its current existence is dying, the move towards a more automated distribution is unstoppable. I am not saying that having physical products in several markets is obsolete, not at all, if the Covid-19 pandemic has shown us, it is even more vital to have logistical hubs in place worldwide, but the way your company and your products are being promoted is about to die. It is time for you to take on new ways, to cope with new challenges and to look into a more transparent way conquering new markets.

An e-commerce platform can help, where you can upload all your products and be exposed to hundreds of clients. You can even login to your backend and see a product ranking and understand how many clicks your products have received in what time and by whom. Something no distributor will be able to tell you. Take matters into your own hands.

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