You may have a great brand, a strong business at home and a well-thought out international strategy, but without a great international partner, your business will never reach its full potential.
The most common mistake that brands make when they go global is not doing enough partner research and signing with the first company that approaches them. A great partner is one that needs to be guided, not controlled. If you find that you are working too hard, trying to run their business or just have serious trust issues, this is likely the wrong partner for you.
So when is it time to cut your losses and part ways with your partner?
Consider the following 10 scenarios. Do any of them seem very familiar to you? If so, it may be time to find a new partner.
1) Slow communication and follow up. You find that it takes many attempts to receive responses to your emails and/or business or other reports that you request from time to time. And, when you finally do receive something, the information is never complete or quite what you requested.
Warning: Your partner is either short-staffed, disorganized or just not totally committed to your business. Any of these scenarios puts tremendous stress on your team and spells trouble for the future growth and development of your brand.
2) The need to check the contract often. You or your team feel the need to refer to your contract over and over to clarify terms or find breaches made by your partner. You also feel the need to put things in writing so you have a paper trail to address the next misunderstanding.
Warning: With a good partner, you should rarely ever have to review the contract. This is a sign that there is a lack of trust between you and your partner. Most likely, your business is not progressing the way you had envisioned and there is a good chance that this partnership is on a downward spiral.
3) Frequent misunderstandings and unexpected surprises. It seems that no matter what you request or agree to, your partner always sends you something different. And during market visits, you always discover some “surprise” (unapproved ad or retail account…) that was never communicated to you or part of their business plan.
Warning: Usually, this is more than just “lost in translation”. In many cases, your partner is not really acting as a partner, but rather, as an independent operator. Your partner cares about his own interests, not your brand’s interest.
4) Poor presentation of your brand in stores. No matter how many times you instruct the sales staff, your product is never merchandised properly. This occurs even after proper training and/or sharing your visual merchandising manuals or planagrams with your partner.
Warning: What this shows is that your partner either has 1) no established retail merchandising process in place 2) inexperienced or incompetent in-store sales or visual merchandising staff or 3) little to no desire to protect your brand’s image.
5) Marketing, retail or other approvals not received on time or at all. You ask to review and approve all marketing materials, retail development plans and store concept drawings prior to execution. Yet, your partner never seems to have time to send you these things before implementation.
Warning: The partner that does not respect your approval procedures and makes changes without asking you first does not understand or value your brand or the importance of consistency. This can really hurt your brand in a country if your partner does a poor job of communicating and executing your brand’s values.
6) You need to chase payments. You are promised payment on a certain date yet it seems that you always need to chase your partner to receive it. You threaten to hold shipments until payment is received which then puts your company and your partner in a very precarious position.
Warning: Obviously, your partner is having financial issues and cannot pay you until they sell the product (if they have stores) or until they collect payment from their customers (if they sell wholesale). This never ends well as you will most likely get stuck with a ton of inventory at some point and the partner will be unable to sustain the business without in-season product.
7) The staff keeps changing. The people that are assigned to your brand always seem to change, making it difficult to have any continuity in the business. With managers constantly being moved around, it is impossible to discuss prior discussions or track progress since no one seems to know the history.
Warning: If the staff is leaving by choice, force, or is being transferred to other departments, this is a big sign of internal problems in the company. Constant staff changes means that you must always keep paper trails which brings you to warning #2 and #3…..mistrust, communication issues and the need to refer to your contract or files frequently.
8) Difficulty scheduling visits either to your country or to theirs. You present your seasonal collection in your country at various times per year but recently, your partner has stopped attending….asking for line sheets instead. You try to schedule trips to their country but more often than not, management is unavailable to meet.
Warning: This is usually a sign that business is poor in the market. The partner does not want to invest in traveling to your market nor does he want you to see what is really going on in his market. This is when you must get on a plane and find out first hand the state of the business.
9) Marketing money not being spent. Your partner seems to spend very little money marketing your brand. You may or may not have a minimum guarantee in your contract but that shouldn’t matter because strong companies know the importance of marketing and will spend the money regardless of a legal commitment.
Warning: If you find that your partner is not investing enough money into your brand, this is a warning that they may have financial issues or are not dedicated to fully developing your business. World markets have become very competitive so without proper marketing support, your brand’s likelihood of strong growth is very limited.
10) Asking for more territory when business is slow. Your business is not “firing on all cylinders” yet your partner is asking for more territory. If the partner is doing well, this isn’t a problem. But, often companies try to get more territory in order to make up for weak sales in their primary market.
Warning: If business is not great in the primary market, the chances that it will improve with more territory is highly unlikely. Rather, you will now have two weak markets instead of one. Most strong partners will want to get the model right at home first before deciding to roll out to additional markets.
In conclusion, changing partners almost always will set you back 1-3 years in the market. But….keeping a bad partner will set you back many years, as eventually, the business will fall apart.
The one thing that I have learned in over 26 years of doing international business is that you cannot transform a bad partner into a good partner no matter how hard you try.
So…if any of the warning signs listed above resonate with you, it may be time to cut your losses and move on to better partners and ultimately, a better international business!