What is the difference between sales and international business development in medical device field



On Sept 15th 2014 I joined Rehab-Robotics. It a technology company that develops and manufacture, as you might guess from the name, robotic rehabilitation devices, specifically one called Hand of Hope. I was the first person to be fully responsible for developing company business internationally. The technology is aiming to help stroke patients to improve their hand motor function.

Hand of Hope - robotic hand rehabilitation device

Prior joining the company I had never worked as export manager or international business development. I did have some prior experience in sales, mostly services (like consulting). I remember even had to ask Google what does business development means and how it is different from sales. Even I had left the company in May 2017, I still with the industry work with another manufacturer called EGZOTech, as well as consult few other companies.

Luna EMG - upper and lower limb rehabilitation


So what does it mean to develop a business? How does the one "develops" business? In traditional view, to develop means to grow it and since business is typically about commerce and trade, to grow revenue, to generate more sales, - that I would call the end goal of doing business development, to get more money through selling your product to more customers through variety of channels. 

Traditional sales is part of it. It's when you know who is your customer (rehab departments of hospitals), you make a list of potential buyers, call them, make an appointment, give a presentation, arrange a trial, follow up with the tender or a direct purchase. 

But to develop business means to expand on the channels of sales. Instead of just focusing on expanding your own sales or sell more to your customers directly, you focus on establishing new sales channels. One of the most common types is to develop a distribution network in other countries, find boys and girls who would buy from you and sell it to their customers in their respective countries. In such case you do not need to sell directly, but rather manage and support your sales partners. 

Companies that have enough resources and can invest more, would set up subsidiaries and hire their own sales force and sell to customers just like they do it at home (like Medtronic, GE, Philips). However, most of the manufacturers have to rely on the middle men on the ground who has connections to potential customers and market knowledge, can provide after sales technical support. Manufacturers simply don't have enough cash and manpower to go direct in all countries. Most of the markets have their own regulations (which sometimes can be real pain), language, buying procedures (especially at public hospitals). You would need to have a local guy on the ground to manage all that, and distributor can just do that for you. In more markets you can have such guy or girl, the more sales you can generate and increase your revenue. 

The best part is that you don't have to pay them, but rather they pay you. The agent would add 30-50% to the transfer price (the price you give to a distributor after tax and shipping), in some countries it would go to up to 100 or even 200%. That's what keeps them interested in doing business with you - their salary, salary of sub-dealers and sometimes even "commission" to doctors to favour your technology vs. competitor's. But that we will discuss more in another chapter. 

Business development can help you to open new channels to sell your products to more customers and generate more revenue than you would through traditional sales. 




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