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German Market Characteristics

The German market is different. Everybody who wants to sell to Germany will recognize it very fast. But what makes it so dfferent?

The German Market is Peripheral

If you want to sell to France, you have to be in Paris - and you have 90% of the market nearby.

If you sell to the UK, you have to be in London - and you have 90% of the market nearby.

If you sell to Germany you have to be everywhere. There is no single town dominating everything - particularly not Berlin. There are core areas for some market sectors. Frankfurt is such a core area for the finance market, Berlin for the governmental business and Munich for the IT companies. But Hamburg, Düsseldorf, Cologne, Stuttgart, Nuremberg are also important places for the business. And what about Bremen, Hannover, Mannheim, Karlsruhe, Leipzig . . .

Resulting from that, German sales reps travel a lot when they have to visit their German clients. 40,000 km per year in the car is not much - and even on Germany's excellent roads without speed limit this travelling consumes a lot of time. Companies thinking about the German market for the very first time should consider this characteristic.

Language

Germany speaks German. Not really a surprise. But a hurdle for many vendors.

English flyers might work for some vendors but you will notivce soon that you need a German approach to be successful in the German market. Even if many people in the German IT organisations understand English pretty good, speaking German to them is a benefit for and easily opens doors for newcomers in that market. This means that starting to sell to Germany, you should have

  • German website
  • German flyers
  • German reference story
  • German speaking sales reps

and a German office address and telefone line will also be a plus.

But you should not only see this as a hurdle only. Once you managed that you will quickly notice that this can turn into a huge advantage. Many foreign vendors fail in selling to Germany due to that hurdle - leaving a bigger share for those who successfully solve that problem.

German Law

If you are coming from a country with local laws like English law, you will quickly notice that German law is much different. But beside that you will find parliamental acts like 'Arbeitnehmerüberlassungsgesetz' and procedures like 'Umsatzsteuersofortprüfung' which are very specific for Germany and not seen much in other places of the world. Just have good consultants helping you with these issues. And do not forget the passing off law (also known as company name law, German: Markenrecht)  which is is relatively important and consists of a great value of dispute. Conflicts with that law can quickly result in penalties exceeding 20,000 Euros. The necessary preparation is to register your company name as a brand, concrete as something that Germans call 'Wort- und Bildmarke' (word and picture brand).

More information about German law: German defects liability law

SELLto.de: B2B Sales Outsourcing
2010-05-06
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