Using Distributors – Maximizing Sales in Latin America

METS companies looking to expand into Latin America must decide how best to service the region. The choice often comes down to whether to work through local partners or sell directly to the mines.

Many companies choose to sell their products through distributors when entering international markets. The strategy allows them to leverage the distributor’s existing relationships and market knowledge to gain faster access to customers. The key benefit is that companies can enter new markets without the upfront investment of building their own local sales teams or opening an office. However, this approach also comes with a trade-off—you lose direct control of the sales process, and the success of the partnership ultimately depends on the distributor’s ability to deliver results.

When it comes to maximising sales, the upfront work and how we manage distributors will directly influence whether the relationship will be successful. 

Choosing the Right Partner

Take your time. Finding the right partner is a long-term investment. It’s better to “measure twice and cut once.” When evaluating potential partners, consider the following:

• Cultural & Language Fit: Do they communicate well? Can they understand technical terms? Do they share your values?
• Experience: Do they sell into the parts of the mine where your product will be used? Do they have a strong reputation and provide after-sales support?
• Territory Coverage: Can they service the specific territories you’re targeting? Latin America is vast, and some mines are in remote locations.
• Portfolio & Resources: What other companies do they represent? Will your product get proper attention? Can they invest in stock?

Large vs. Small Distributors

• Large Distributors often have multiple product lines. Sales teams focus on the easiest solutions to sell, so if your product is complex or niche, it might get sidelined.
• Small Distributors can be more dedicated but may lack financial stability. They might struggle with longer sales cycles or large initial investments.
• Our preference? Small distributors that represent a few key brands and already generate revenue. These partners are usually more motivated to push new solutions while having the cash flow to survive.

Supporting Your Partners

To succeed with partners, supporting them is critical:

• Marketing: Provide translated materials, sales decks, and documentation. Get their feedback.
• Communication: Set up clear channels for quick responses on quotes, specs, and technical questions. Assign a dedicated person—preferably who speaks the local language.
• Sales Management: Establish expectations from day one. Request regular updates and pipeline reviews. Work collaboratively as a team.
• Local Support: If possible, have a local technical expert working alongside your partners. They can help qualify leads, attend meetings, and provide the on-site expertise partners need to close deals.

Ax Legal Practical Advice

• Do Your Due Diligence: Visit their clients, request references, check financials, conduct credit checks, and confirm legal standing. Don’t rely solely on what partners tell you—verify.
• Validate Local Presence: Many partners claim to have regional offices but send staff from elsewhere. Local knowledge and contacts are crucial so we always need to validate that the partner can support the territory.
• Limit Early Commitments: Avoid granting exclusivity or large territories too soon. Make partners earn it based on performance.
• Set Realistic Expectations: New sales take time. Don’t expect immediate results—but do expect clear reporting, pipeline updates, and activity.
• Protect Your IP: Use solid local agreements that protect trademarks, branding, and confidential information. Make sure they are enforceable under local laws.

Conclusion

Working with local partners can be a highly cost-effective way to enter a new market, especially in complex regions like Latin America. However, it also comes with inherent risks—particularly for foreign companies unfamiliar with the local business landscape. One of the most common and costly mistakes is appointing a distributor without conducting proper due diligence. As a result, companies often spend valuable time and energy on partnerships that fail to deliver meaningful sales—or worse, create reputational or operational challenges.

Success in these markets begins with putting in the time upfront to thoroughly evaluate and select the right partner. This means not only reviewing their capabilities and market presence but also assessing their financial stability, customer relationships, and alignment with your company’s values and expectations.

Once the right partner is in place, it’s just as important to actively support them as they introduce and represent your solution in the local market. Simply handing over brochures and expecting results rarely works.

Having your own technical expert or business development lead in the region is a game-changer. This person can work directly with your partners, accompany them to client meetings, validate opportunities, and provide the local, on-demand support that distributors often need to close deals. It also sends a strong message to clients and partners that you are committed to the region.

Ultimately, building a successful distributor relationship requires a mix of strategic selection, ongoing collaboration, and a local presence to ensure consistent results.

Ax Legal helps industrial technology, engineering, and service companies to navigate the legal and commercial aspects of operating their business in Latin America. With deep knowledge of the industrial and natural resource sectors, we provide actionable and practical advice to help streamline our clients’ entries into Latin America, improve how they operate in the region, and to protect their interests.

Over the years, our team of legal and commercial advisors have developed a track record of working with companies of all sizes from Australia, Canada, the U.S., and Europe. The one common factor that connects our clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

To better understand how we can support you in the Region, please contact Cody Mcfarlane at cmm@ax.legal