Traditionally, the Japanese distribution system consists of a complicated system of layers of wholesalers sandwiched between manufacturers and retailers. Product reaches the end-users/consumers, in this “vertical” or “hierarchical” relationship rather than the western “partnership” or “horizontal” business relationship. This vertical relationship is globally known as the word “keiretsu” if it is driven by a strong and powerful manufacturer at the top of the hierarchy.

A Wholesaler’s attitude toward business is different from that of a distributor’s in the following points:

 Wholesalers are consumer driven and sell whatever brands they want to sell or are asked by their customers to sell. (Distributors are more brand driven and have a responsibility to grow the brand.)

 Wholesalers transfer complaints received from the consumer directly to the manufacturers regardless of whatever the complaints may be, including those that are not reasonable. (Distributors exercise more control over the information.)

 Wholesalers care for their profit only and have a short term view. (Distributors focus on mutual profit as the brand grows out of the brand, and try to build “win-win” relationship.)

If you are looking for a valuable distributor that cares and grows your brand in the Japanese market in Japan, I would recommend you ask yourself the following questions:

 What is the candidate’s background? (Wholesale business, distributorship, etc.)

 Do they have or are they planning to have any competitors’ products in their product line?

 Do they request too many product modifications? (Including unreasonable or trivial requests)

 Do they truly understand what a “win-win” business relationship is?

 Do they consistently treat and respect you as a long-term partner - not only when you are having dinner together?

 Do they understand the importance of a business contract?

Most of these questions can be answered through negotiations and day-to-day communications. If you your answers leave you feeling uncomfortable, this may be an indication to stop and think over whether they are the right partner to handle your brand.