Challenges of pan-European distribution

Why brands should think twice about setting up their own distribution in Europe

Up and coming challenger brands are often faced with the following strategic core decisions:

We, of course, believe in the value of a single-company pan-European distributorship for both challenger and A-brands, and here’s why. It’s not just about entering or expanding a market. It’s about solidifying one.

Channel management and price stability are key

As a brand already active in European countries or wanting to enter the European market, it’s of vital importance to treat the territory as a whole rather than an entity made up of individual markets or countries. Why do we do individual, region-specific market reports then you might wonder.

We’re not arguing the importance of being market-specifically aware; we’re talking about how a European-centred market awarenessness will create a uniform and consistent brand image across the continent and a channel management to secure better price stability.

Contrarily, if you go with local distributorship for each market, you will need 15 distributors to cover Western Europe alone, which in turn results in unstable, unreliable pricing models and hurts name recognition due to a brand image that’s – quite literally – all over the place.

If you only ever focus locally, you’ll risk sacrificing long-term brand building and price stability for short-term local gain. Managing multiple local retailers and their individual price settings is difficult and cumbersome, since distributors have no incentive to align with prices in other markets.

Sales agents

Some brands try to circumvent this problem by employing pan-European sales consultants who manage their various local distributors for them. This approach facilitates day-to-day brand business, but it comes at an added cost, whereas a single partner integrates distribution, logistics, merchandising and sales, allowing brands to convert fixed costs into variable ones.

Global distribution champions

So, if a pan-European distribution setup is easier to manage, has lower fixed costs, provides better safeguarding for your brand and allows more price stability, why isn’t everyone doing it? One problem is that most companies that can offer pan-European serivces are often big corporations with 500+ millions in annual turnover.

They are extremely efficient in distribution and warehousing but, at the same time, very removed from the different retail customers and key categories. On the one hand, processes in such companies are super solid, and on the other, super inflexible.

Why Aqipa is the way to go

Aqipa has always been focused on strong brands. These include A-listers like GoPro and Marshall but also aspirational and dedicated challenger brands like XGIMI and Unagi. And all of our challengers have one thing in common: They don’t want to be on the market for short-term gains, but rather to build a sustainable and profitable business.

And besides access to the right distributor channels, this requires a sophisticated management of on- and offline presences as well as launch support with on-site promoters and dedicated sales people who know how to market premium products. Working with premium lifestyle brands is in our DNA, and have made massive investments in gearing up our expertise and capacities when it comes to e-commerce fulfilment and marketplace management.

In a nutshell, Aqipa bridges the best of two worlds: Efficient logistics that only large players can offer. We run fully on SAP, provide EDI connections to our retailers and can deliver throughout Europe within a matter of days. We have our own customer service and customer care teams, a fully fledged returns and repair department and registered legal entities from the UK all the way down to Spain.

Our sales and marketing capabilities are equally strong, especially in regards to premium lifestyle product listing. We have people on the ground all over Europe as well as a creative marketing and content management stationed at our headquarters in Austria. To make things complete, we also have a newly built autostore warehouse capable of delivering more than 40,0000 daily packages with special capacities for high-volume campaigns such as Black Friday.

Three Aqipa key qualities

Q&A with Viggo Olsen, Brand Sales Director at Aqipa

Let’s do a little Q&A with Viggo Olsen, Brand Sales Director at Aqipa.

Why should brands opt for a consolidated pan-European setup over individual distributors in each country?

This boils down to price control, being of importance to the distributor, large-scale coverage in one go…in a nutshell, channel management. If you want to be strategic with your brand and control pricing/appearance within consumer legislation, the pan-European approach is the way to go!

Does it make sense for brands to employ sales agents or consultants and then just use a box mover for distribution so to speak?

A lot of brands want to simplify their business and are therefore willing to convert fixed to carriable costs. With different agents and distributors in different markets, there are a lot more things to keep track of. And none of them work together in unison, whereas a pan-European distributor like Aqipa offers aligned services across all regions, meaning inconsistencies with pricing or branding, for instance, don’t arise in the first place.

What are the advantages in using pan-European distribution for big names from Asia or the US?

Many brands from the US or Asia typically start out in one core country (e.g. Germany or UK) with the idea to later expand across Europe. They quickly realise that Europe is very diverse and cannot necessarily be served from one country alone. A successful introduction to an overseas market relies on good marketing and branding efforts, a strong network and people that know the market. The right partner offers uniform support in all these endeavours, which makes the market entry for foreign brands significantly easier.

What about retailers?

Retailers benefit from a pan-European setup as well because it means better management for the brands in their portfolio.

30 years and counting

In 2020, we celebrated our 30th birthday, and we are looking into the future with more excitement, zest and know-how than ever before. If you have any questions, don’t hesitate to reach out to gear guru Viggo Olsen.