Blog contribution by Edgar Kasteel. Companies wanting to sell their devices in Europe should consider not only where they want to sell, but what they need to accomplish. Loading up a crate of goods, calling UPS and crossing fingers do not make a viable business plan.
Obtaining CE Marking certification is a crucial step for medical device companies seeking to commercialize their products in the European Union. But in the rush to comply with European regulatory requirements and get all required documentation in order, some firms overlook the fact that their devices, no matter how innovative or beneficial, cannot sell themselves.
Manufacturers sometimes do not take enough time to properly research and evaluate medical distributors that play a key role in successful European market sales. This can and does result in lost business opportunities and disappointing sales rates.
Which type of medical distribution partner?
Once you have identified where in Europe you plan to market your device, you must identify distributors best suited to support your business plan. Key considerations include:
- Is your device relatively simple or complex?
- Will service and maintenance be required often?
- Are you initially targeting only one or two countries, or multiple EU markets?
- Is your device new to the EU market, or is it more of a high-volume, low-margin product?
Based on your answers to the questions above, you can develop a profile of your specific distribution requirements in order to screen potential partners. Companies sometimes skip due diligence of potential distribution partners due to time constraints, opting instead for a simple list or directory of medical distributors active in Europe. This can lead some firms to enter into agreements with the first distributor they come across.
The process of finding a suitable distributor should be undertaken carefully and deliberately. Yes, the Internet is an amazing tool for market research, but there is sometimes no substitute for talking to a potential partner over the phone or face-to-face. Partnerships rarely succeed without strong relationships.
Pan-European versus national distribution
Smaller regional distributors may make more sense if you plan to focus on one or a few countries with a relatively simple product. More complex, high-margin devices to be marketed throughout the EU however, may require a larger distributor with a pan-European network
One distributor for each European country is ideal; German distributors can often cover the Austrian and Swiss markets, but should have branch offices in both countries, not just sales staff supported by their headquarters in Germany. Scandinavia, too, can sometimes be covered by a pan-Scandinavia distributor, but again, you should ensure that such a partner maintains actual offices in each market to support business development. Swedish and Danish distributors often organize sales forces in all Scandinavian markets.
While “master” distributors may offer international networks through which you can sell your product, you should ensure that each country the “master distributor” purports to cover is not simply a sub-distributor, adding another layer to the end-user cost and diluting the information you want sales people to master. Distribution companies are rarely pan-European, although some claim to be. Original Equipment Manufacturers (OEMs), which take on other company’s products, are usually pan-European, but here, too, you must evaluate each subsidiary individually before granting exclusivity. Easier is rarely better.
Now that you know what to look for, you have to go find the candidates that fit your requirements.
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About Emergo Group
Emergo is a single resource for helping you access the largest and fastest growing markets worldwide. With local offices in 24 countries, we offer the expertise to help you research new markets, comply with national medical device and IVD regulations, maintain control of your device registrations and partner with high quality distributors.