Interview: Four mistakes vendors make in Germany
Germany is the number one economic engine in the EU. With its 80 million inhabitants and a relatively high standard of living, many manufacturers already believe they know everything. ChannelHub spoke to Marc Eylmann, CEO of 1000 Deals in Germany, to find what vendors need to consider before entering the market.
ChannelHub: What should vendors entering the German consumer electronics sector need to consider?
Eylmann: In all the years since I’ve worked for various consumer electronics manufacturers, I’ve found that the same mistakes are made time and again:
- Market Entry: It is generally not prepared properly
- Insufficient knowledge of the market complicates a successful market entry
- There is no knowledge of legal requirements for products in the trade
- No financial resources are created
ChannelHub: How would they prepare for market entry?
Eylmann: Germany is one of the first targets when it comes to selling products in the EU. Often, first of all, online market access is chosen, which is relatively easy to manage from abroad, it seems. This saves money and instead of investing in local sales, the products are offered as they are. This is a mistake because in order to successfully sell products from online trading to offline trading, market knowledge is required. Vendors that do not invest in local knowledge are running the risk of being warned because the products are not properly marked and do not have a required German description (manual).
ChannelHub: What are the legal requirements of doing business in Germany?
Eylmann: There are some product registrations necessary to sell goods in German trade. In Germany, many lawyers specialize in reminders in this area. Violating these policies can be costly, and products are also be taken out of the market and confiscated by customs without the right paperwork.
ChannelHub: Can you elaborate around market knowledge?
Eylmann: There are many potentially suitable co-operation partners for manufacturers. Who are the right ones? Who has the appropriate experience and market penetration for the manufacturer’s products? Often a wrong decision is made here and therefore much time and money is given away. Unfortunately, a failed start very often makes second start even more difficult. The only thing that can help, for example, are independent sales professionals who know the market well, can find the right partners and thus save a lot of time and money.
ChannelHub: When you say, “financial resources”, what do you mean?
Eylmann: Entering a new market requires financial resources. These resources run from registering the products to marketing to localized services. Larger distributors will not necessarily offer the option of registering products but could support with collaborating marketing and localized service support. However, smaller distributors provide this service, and pass such costs to the manufacturer. Many often charge service fees for providing such services.