One of the crucial parts of the commercialisation process is implementing a distribution strategy for a new product. The inventor has put in the hard- yards (both in capital and time) and now it’s time to determine how and where the consumer will buy your product through the most appropriate distribution channels. Reaching your target market is crucial for successful market entry and commercialisation. These are the key points to consider in a distribution strategy:
Consider the target market, e.g. market size, market opportunity, market segmentation and target market applications. Decide which territories both locally and/or internationally you wish to sell your product.
Some distributors will request for exclusive rights to distribute your product within a set territory or market segment. Consider the commercial implications of this type of agreement and whether this will impact your product’s ability to reach the market.
Price of the Product
What price will the distributor pay to the manufacturer for the product?
Consider the size and relevance of the distributor. A distributor that distributes medical devices in your chosen speciality or has existing products that are compatible with your device will have experience and a proven track record in reaching targeted markets.
Protect your IP
In the search for the perfect distributor, you may have to reveal commercially sensitive information regarding features of your medical device. Ensure confidentially or non-disclosure agreements are signed prior to undertaking these discussions.
How will you test, monitor and measure the performance of your chosen distributor? If a distributor is not up to scratch, clauses that allow for termination for cause and convenience should exist in the distribution agreement.
Draft a distribution agreement
These are the agreed upon terms and conditions upon which the distributor agrees to distribute the goods. Inner Maven can provide assistance with this.
At Inner Maven, with our links to industry in Australia and in key markets around the world, we can assist inventors in implementing an effective distribution strategy and to find the right distributors for your medical device or technology.