Choosing the right distributor is one of the most critical decisions for life sciences companies entering or expanding in a new market. Whether in pharmaceuticals, biopharmaceuticals, medical devices, or med-tech, the wrong partner can slow growth, damage your brand, or block market access entirely.

This guide offers practical tips for carrying out thorough due diligence when selecting a new distributor, as well as strategies for correcting course in existing partnerships when the initial diligence didn’t reveal key issues.

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Part 1: Operational & Commercial Due Diligence for New Distributors

Effective due diligence goes far beyond reviewing financial statements. Assessing whether a distributor can actually sell your product requires a deep dive into operational, commercial, and strategic capabilities.

1. Sales Force Structure and Coverage

• Number of reps covering your product category.
• Geographic reach and account segmentation.
• Experience with similar products or therapeutic areas.

2. Track Record of Product Launches

• Historical success launching similar products.
• Time-to-market performance for previous launches.
• Ability to meet sales targets consistently.

3. Customer Access and Relationships

• Depth and quality of relationships with hospitals, clinics, labs, or pharmacies.
• Access to KOLs and decision-makers.
• Ability to navigate procurement or hospital approval processes.

4. Sales Processes and Metrics

• Pipeline management and CRM usage.
• Lead follow-up speed and frequency.
• Reporting cadence, accuracy, and transparency.

5. Marketing and Promotion Capabilities

• Preparedness to run product demos, webinars, or scientific events.
• Existing marketing collateral and ability to adapt it for your product.
• Budget allocation for promotional campaigns.

6. Team Expertise and Commitment

• Knowledge of your product’s therapeutic area.
• Training programs for sales reps.
• Incentive structures aligned with your growth objectives.

7. Operational Risk Assessment

• Ability to handle regulatory reporting, cold chain logistics (if applicable), and customer service.
• Past incidents of compliance failures, stock-outs, or logistical delays.

Tip: Conduct site visits and ride-alongs if possible. Observing the team in action often reveals insights that documents or interviews cannot.

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Part 2: Fixing Existing Partnerships When Due Diligence Was Missed or Misleading

Even the most thorough diligence cannot guarantee perfect results. When actual performance falls short, companies can take several steps:

1. Audit and Assess Current Performance

• Conduct a competency audit: sales, marketing, reporting, regulatory compliance.
• Compare actual results with initial expectations and contractual KPIs.

2. Improve Visibility and Transparency

• Require more frequent and structured reporting.
• Request access to customer or sales data (where possible).
• Introduce dashboard tracking of key metrics.

3. Reset Expectations and Roles

• Define clear KPIs and responsibilities moving forward.
• Conduct workshops or training to align the distributor with your product strategy.

4. Provide Support

• Offer marketing, sales, or clinical support to help them succeed.
• Facilitate introductions to KOLs or hospital networks.

5. Plan for Exit or Transition if Needed

• Maintain the ability to replace or supplement the distributor if performance doesn’t improve.
• Include contingency clauses in agreements for future transitions.

Key Insight: It is much easier and cheaper to prevent issues upfront than to correct them later, but structured audits and incremental intervention can salvage underperforming relationships.

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Key Takeaways

• Due diligence is multi-dimensional: Commercial, regulatory, financial, strategic, and operational aspects all matter.
• Standardized scoring systems help compare potential distributors objectively.
• Missed diligence isn’t a lost cause: Audit, support, reset expectations, and maintain exit options.
• Long-term foresight is critical: Changing distributors later is expensive and disruptive — plan and structure your agreements accordingly.

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At Invision Japan, we help life sciences companies thoroughly vet new distributors and rescue underperforming partnerships in Japan. Whether you’re entering the market or correcting course, structured assessment and proactive management are the keys to sustained success.

Many global executives are told the same story when sales in Japan disappoint:
“Japan is a difficult market.”
“Customers here are conservative.”
“The regulations are too strict.”

While there is truth in each of these statements, they are often used as a shield. In reality, many good products fail in Japan not because of the market itself, but because of issues closer to home: the structure, incentives, and performance of the chosen distributor or partner.

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The Market Isn’t Always the Problem

Japan is the world’s third-largest economy. Customers here buy new medical devices, pharmaceuticals, technologies, and industrial products every day. Competitors launch and succeed. If your product has proven demand elsewhere, it’s unlikely that Japan is uniquely resistant.

What’s far more common is:

• Distributor passivity – waiting for orders instead of creating demand.
• Overreliance on existing relationships – your partner only pushes products that already sell.
• Limited transparency – poor reporting hides weak performance until it’s too late.
• Excuse-driven culture – “the market isn’t ready” becomes the default explanation for inaction.

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Common Failure Patterns

1. Early enthusiasm, fast fade.
   A Japanese distributor initially invests in the relationship, then quietly shifts focus back to their core products once the “newness” wears off.
2. Big name, little effort.
   Companies often feel secure signing with a well-known trading house or distributor. But size doesn’t guarantee commitment — your product may never be more than a line item in a catalog.
3. Blaming culture instead of strategy.
   Politeness masks underperformance. You hear reassurance in meetings, but no sales momentum in the field.

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What This Means for You

If your product is struggling in Japan, don’t assume the market is the problem. Instead, ask:

• Is our distributor really investing in this product, or just holding the license?
• Are they providing real sales and market feedback, or just excuses?
• Do we have visibility into their pipeline, customer meetings, and promotional activity?
• Have we defined performance expectations — and what happens if they’re not met?

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Fixing the Problem

Improving distributor performance in Japan isn’t easy — but it is possible. Options include:

• Resetting the relationship – with clearer expectations, KPIs, and accountability.
• Providing tools and support – sales training, marketing materials, or market data.
• Applying pressure – making it clear that underperformance will lead to change.
• Exploring alternatives – sometimes the right answer is to replace, not repair.

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Final Thought

Good products fail in Japan not because of some mysterious barrier in the market, but because of misaligned partnerships, lack of transparency, and unaddressed distributor underperformance.

The market is there. The demand is there. The question is whether your partner is really opening the door — or standing in the way.

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At Invision, we specialize in helping companies diagnose and fix partner challenges in Japan. If your product isn’t performing, it may not be the market — it may be your partner. And that can be fixed.