This article aims to give you some handy tips about how to segment your Brazilian prospects and how to avoid spending time on dead-end prospects.
If you ever went to trade-shows in Brazil looking for a local representative or distributor, the chance is big that you go home with plenty of prospects or at least many new contacts. At any type of trade-show in Brazil there will be numerous independent sales representatives looking for new foreign companies to benefit from. We will try to give you some tips on what to look for in identifying dead-end prospects.
1. Well connected
This is almost always a hoax. It's extremely easy to create business connections in Brazil due to the Latin-American friendliness. You can go to networking events every day of the week and meet interesting people. However well connected does not necessarily mean effective.
Simply stating that someone is well connected without referring to the capability of someone's contact network is often a sign of a dead-end prospect.
2. More interested in himself than you
This second sign might apply in any market in the world. It might just be that the density of self-centric personalities is higher at Brazilian trade-shows.
The majority of serious Brazilian distributors and sales representatives have the mentality that you as a foreign vendor need them more than they need you. If you get a feeling that your prospect is trying to sell himself instead of learning about your product and services you are most likely facing a dead-end prospect.
3. Covering the entire Brazil
Brazil is 8,514,877 km2 with more than 5000 municipalities. How likely is it that one person or a small company can actually claim that they cover the entire Brazil? Depending on the industry of course. But any serious businessman would not claim to cover the entire country just because he has one or two clients in North-East of Brazil.
If you are in doubt, ask your prospect how he would handle requests from Amapá (a small state located in the extreme north of Brazil).
4. Avoid to discuss conditions
Brazilian will in general often be considered as vague by foreigners. Be aware that Brazilians often will use this as a strategy to act as a representative for your company in Brazil without any firm commitment.
It should not be difficult to imagine that this type of non-formalized distributor agreements can cause all sorts of difficult situations.
5. Offer outrageous conditions
This might be the most common reason why agreements with Brazilian sales representatives and foreign vendors do not succeed. Over the years we have heard many outrageous conditions set by Brazilian sales representatives, this including:
- Paying for Brazilian employees salary
- Sales commission without added value on 50% or more
- Paying a fixed amount to become their preferred vendor
- Joint venture where the foreign part take all the legal risk
Sadly enough there are foreign companies that accept these conditions but you could rather send your money to a lottery in Nigeria.
6. Too positive
Being positive isn't necessary a negative thing, but as mentioned before, most serious Brazilian distributors and sales representatives have the mentality that you as a foreign vendor need them more than they need you.
Too positive distributors or sales representatives might be an indication of a less experienced prospect.
7. Are surprisingly quick to answer
The myth that Brazilians are slow is not entirely true, however it's not very common to give quick answers by e-mail even though it occasionally happens.
If your Brazilian prospect always replies to your e-mails instantly it might be a sign that he doesn't have too much to do.