For over ten years now, I've been actively operating in the American market, selling European tech products to end customers, OEMs, distributors, integrators, and many other customer segments. Time and again, I ask myself whether my US journey actually went as smoothly as a storybook—or whether there are lessons learned that I can pass on to others.
I still remember quite clearly when, before establishing our own US subsidiary, we had a sales partner covering the entire USA. Interestingly, this sales partner in Texas not only handled US distribution for the Austrian electronics company but also ran his own manufacturer's rep firm on the side.
After extensive research and shared observations, we came to the conclusion with our sales partner that it would be better if we built our own sales network.
If It Sounds Too Good to Be True, Investigate Again
Especially with such setups, you need to ensure they're actually built solidly and in your customers' best interests. In our example, our distributor not only imported the products from Europe as the master distributor into the USA but also paid himself a commission when products were sold to customers in his manufacturer's rep network in Texas.
Essentially killing two birds with one stone—at least for the rep/distributor.
This exact scenario gave me the impetus to establish our own subsidiary. And that was in addition to the realization that it's virtually impossible to gain significant market share across the entire USA with just one sales partner. When you look at the size of the country and the size of the automation and robotics market, you quickly realize you're dealing with 50 countries plus territories.
Especially if you set your goal to gain significant market share across all of America, you can't avoid your own solution to profitably convert the size of the country and the scope of your target industry (keywords: TAM-SAM-SOM).
How Can an EU Manufacturer Enter the USA Efficiently?
Once you realize that a manufacturer's actual responsibility—especially from Europe—is the development and production of tech products, you should be particularly selective and conscious when deciding where to choose a direct sales force with your own office OR build a strong dealer network. Of course, in our case, much spoke in favor of our own subsidiary, yet as an SME, we didn't have the resources and capabilities of a billion-dollar company.
I often describe that a 100-person company can't have the same prerequisites for market explosion as a Siemens, Schneider Electric, ABB, or Rockwell Automation. I often tell state economic development offices that we can't just pump billions into an expansion or sales office.
That's why it's very important to strategically decide whether you sell in the USA directly, through distributors, through brokers, through integrators, through manufacturer's reps, or even a hybrid model.
Direct Sales vs. Indirect Sales Through Partners
Even though direct sales might initially seem better for closer customer contact, you need to realize that sales partners and reseller networks in the USA have cultivated and nurtured decades of existing customer networks.
Especially because in the USA, the personal touch counts more and networks are celebrated. I've also discovered that with partner proximity and joint customer meetings, you can convert most leads and opportunities into active customers.
Without investing hundreds of thousands of euros in your own sales force.
Only Those Who Sell Get Paid
Because one thing is the beauty of working with independent sales partners:
They only profit from the joint business when something is actually sold.
For instance, distributors get a discount on the list price and thus secure their profit margin, while sales reps (commonly called manufacturer's reps in the US) work purely on a commission basis.
What Does the Salesperson Do and What Does the Technician Do?
"Shoemaker, stick to your last," goes an old saying. And rightly so:
The supplier's task is therefore to provide innovative products that make selling easier and to train the sales force without trying to convert them into super-engineers. The sales team is then able to cultivate customer relationships and look out for new project opportunities.
Do You Need Support for US Market Entry?
At StateMinded, we help European tech companies enter the US market quickly, effectively, and efficiently.
With our experienced sales network, you reach your USA ROI faster and only establish your US entity when you already have existing customers—before you invest heavily in the market.
Feel free to reach out to me, and I'll share how my USA journey happened in detail and how I drove US business for an Austrian company from $14,000 to millions—solely with the help of distributors and sales reps across all regions of the USA.