At first glance, finding sales channel partners and distributors in Russia is about the same as anywhere else, and the same principles apply. There are some culture and market-specific aspects you do need to consider, though.
The first thing you need to know is that Russia is not very transparent, so sometimes getting the information you need might not be easy.
A simple example is finding the contact information for a person of interest in the organisation: you might have to really search to find a name and an e-mail address as they are often not available on the company websites.
Many open sources for information are generally not as readily available in Russia, and you should double-check information regularly, as not all sources are reliable.
You should also note that most information is only available in Russian and Cyrillic. In addition, the older generation of managers will mostly only speak Russian, so you will need someone with language skills to do business in Russia and other Russian-speaking countries.
The second thing you will encounter is bureaucracy and a clear distinction between official and unofficial information. Companies still very much need round seals to give documents and agreements official status.
Any contacts from your own country living locally who might be willing to make an introduction can help you bypass some of it, but ultimately high uncertainty avoidance is built into the Russian culture and is reflected in complex and bureaucratic procedures in the society.
In this blog post, we’ll go over the things you need to know and the resources you’ll need when you want to find a suitable partner and form a successful partnership on your own. We’ll also show you the points where you can get outside help and find it if you want to outsource some of the work. This is a common approach for foreign companies, especially when they don’t have Russian-speaking employees with business experience in-house.
What kind of a partner or distributor should you try to find?
Finding the right partner to work with involves keeping a lot of balls in the air, and sometimes it’s easy to forget the fundamentals of working in the Russian market. That’s why setting the right expectations is a good place to start. While simply finding a partner to get things going may look like the most fundamental piece in the puzzle, focusing on just that one aspect can lead to problems further down the road.
At the end of the day, it is not enough to find just any partner, but you should be looking for a company that:
- Is capable and experienced in dealing with the local complex logistical systems and import procedures.
- Ideally has experience working with foreign companies and understands their requirements.
- Has the network and business relationships required in Russia either in-house or through brokers (both for business and administration).
- Has foreign currency systems (not only equipped to buy from importers).
Russian companies usually look for long-term partnerships, so finding a suitable partner can save you a lot of money and time down the road. That’s why we came up with these 5 steps every exporter can take to find and contact the right partners in Russia. Let’s begin by looking at how you can help guarantee that long-term success from the start.
1 Market analysis stage vs hitting the ground running
It’s tempting to try to hit the ground running and rush to partner search as the first thing. Companies too often want to skip the market analysis stage to save time and money but often find themselves spending more fixing the situation later on.
In practice, without market analysis, you may end up doing business with the entirely wrong partners and using the wrong competitive strategy. It’s not uncommon that rushing things lead to positioning your offering wrong, for example, or not finding any partners at all.
This is where a professional “go-to-market” service provider can be an advantage. That includes specialised consultants like our parent company Sarus Ltd, but you might also find help through the chambers of commerce or your country’s local embassy. These services help you with professional market analysis and partner search for the specific market and product or service.
After the market analysis stage, you are better prepared to set proper search criteria and ideal partner profiles for partner candidates, saving you from making strategic mistakes you will have to deal with later.
This step will also help you find partners and distributors in Russia who are experienced enough to understand the requirements foreign partners exporting to Russia usually have for their business partners.
2 Where to focus your sales partner search
Russia is a vast country. That’s probably why most vendors head to the two largest cities, Moscow and St. Petersburg, first and expand to other regions later. It might be good to know that Russia is very Moscow-centric when it comes to business, and the headquarters of most companies are located in Moscow.
Still, you can find many importers in St. Petersburg too, and this is not to say that there are no good distributor and dealer companies in the big regional cities.
The problem with these regional cities is that many of the companies you find there are not experienced in import procedures or don’t have foreign currency systems. Hence, they often prefer to buy locally from importers.
3 Finding information on potential partners and distributors in Russia
As we have already touched on, it can be a bit trickier to find information in Russia unless you have contacts who can help you open some doors. That doesn’t mean you can’t get your hands on information, though.
You should know that if you decide to do the job without outside professional help, you need a Russian speaker for this, as most company websites in Russia are only in Russian.
It’s a good idea to get a local business consultant’s analysis of the partner candidates anyway. You get a lot of value out of it as they can help you with local nuances that might escape you otherwise.
Kick off your search with these information sources:
- Searches in Cyrillic in Yandex
- Industry trade fairs and trade fair catalogues
- Competitors’ and companies’ websites where they list their partners and importing companies in Russia
- Searching your product category name or competing products in Russian search engines
- Business sector and trade associations and publications etc.
- Russian imports customs statistics (TNVED) providing names of importers and import statistics of your product group.
If you are not familiar with Yandex, it is a popular Russian search engine and generally provides more extensive results on Russian businesses than Google, which is also used. You will need to use Cyrillic search terms to use Yandex.
4 How to contact potential sales channel partners and distributors in Russia
Besides searching for partners, this phase is quite time-consuming, and you might run into some culture-specific steps.
The first issue is that Russian companies don’t usually publish contact names on their websites. You have to call the company to find out who the right person to contact is.
Many companies have “gatekeepers”, and to get past them, you should know the target person’s name. Just asking on the phone to connect you with somebody responsible for something does not necessarily open doors.
You basically have two options:
The first one is the most common route. Usually, it is advisable to write a letter first and then call. Your mail likely ended up in a bin. During the call, you address the letter you sent and ask the secretary to send it to the appropriate person.
The second one is that you call first and ask to whom to send a letter with your topic. Usually, they give you a department. After sending your letter to the department, you should make a second call to the department and ask for the right person to talk to.
This usually takes at least a few rounds.
As Russia is a very hierarchical country, remember to target the decision-maker level to move things along. Relationships can help a great deal here, so if you have someone in your network who can help, it can help you open doors and save a lot of time. When you’re ready to move to the negotiating stage, we have a detailed article on business negotiations in Russia for you.
5 Background check
We can’t stress this too much: do not skip the background check of your potential partner company and distributors in Russia.
As you already know, Russia is not very transparent, and getting information from open sources is not as easy as you might be used to. That’s why many vendors have made the mistake of skipping due diligence and being overly trusting.
A background check of your potential partner is essential and will help you understand their real status: ownership, financial situation, reputation, possible problems with the tax or other authorities.
Most companies outsource this task to service providers, but it is possible to do it yourself, too, with the help of a Russian speaker.
Final thoughts and export consulting on Russia
The amount of information you need and the difficulty of finding it depends on individual business needs and circumstances. Generally, the more you know about your potential partner before you go into business, the better.
If you would like help in your search, analysis, or background checks, we recommend getting in touch with Sarus, whose local team of experts have helped hundreds of SMEs find partners, negotiate contracts and enter the Russian market successfully.
We hope this post helps you find the right sales channel partner or distributor in Russia. For the next step, you might be interested in our article on the 6 questions Nordic exporters need to ask to succeed in the Russian business environment.
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