October 23, 2014

Distributor Sucess! Finding Growth and New Customers with Distributors.

Are you seeking growth and success for your product and needing to add distributors to sell retailers and foodservice operators?
If you are seeking to grow your business with distributors, let me share some of my insight successfully building millions in sales with distributors.

My goal is to answer several questions and provide you a framework to build success for your company and brands.

This quick overview will address several questions:
  1.      What is a distributor?
  2.      What function does a distributor play in the role of merchandise?
  3.      How do distributors service niches and channels?
  4.      What is the process and approach to working with distributors?
  5.      How does the end customer compute in working with distributors?
  6.     What does it take to be successful with distributors?

My approach and experience working with distributors has been developed over the past 30 years working with the largest food brands to tiny non-revenue start ups and various retailers and foodservice operators. 

This overview and along with my experience works equally as well with food, health and beauty items, equipment, non-food or even dust brooms. Yes, I even organized an effort to sell handmade brooms from Mexico into one of the largest retailers in the USA with distributors.

A distributors function is to warehouse an inventory of various products that customers can order on an as needed basis and pay for what they need when ordered.

Warehouses are secure storage and inventoried for accurate accounting and financial record keeping. They manage terms along with ordering and consolidating the various items a customer would need on a regularly scheduled order day.

Distributors generally publish a catalog or order guide that customers use to pull product for their stores and locations.  Once customers create the order, the distributor will consolidate the load and place onto a delivery truck for receiving by the customer.

There are some vendors that avoid use of distributors and they are called DSD operations or Direct Store Delivery. Also, you will find several of the largest chains self-distribute their product with company owned trucks and warehouses.

Distributors will handle various distribution and financial functions for customers.
Collect Money/Payments
Orders Placed
Manage Inventory
Deliveries Made
Keep Retailers Stocked
Keep Restaurants stocked with Food
Alert to retailers to new items

Generally, distributors will focus on specific classes of trade or channels and segments of retail. They can be regional in distribution or national. Regardless of a distributors size, they generally have one warehouse in a general area that supplies the closest stores.

There exist distributors that focus on these specific channels:
Food Retailing
Club Stores
Self-Distributing Chains
Convenience Stores
Healthy Retail
Franchisee Distributors

Success with distributors will require your attention and efforts in the following six areas.
Marketing Efforts
Item Selection

When presenting your item to a distributor, they will review your item and ask themselves the following questions prior to purchasing your product:
  • ·        Are Customers asking for product?
  • ·        Serve a retailer segment need?
  • ·        Can we quickly land customers for the item?
  • ·        Are there current authorizations for the item?
  • ·        What is the vendor doing to support the item?

The distributor will overall evaluate your products a success if they meet their criteria on
  1.  Profits
  2. Scalability
  3. New Items
  4. New Authorizations
  5. Market and Action Follow-thru by Vendor
  6. Customer Service

Make it clear and evident in your presentation and efforts that your product meets these criteria and you will succeed. Provide acceptable levels in all six areas and watch your sales soar.

My hope is this quick overview walks you through the very basic understanding of what distributors are seeking in a new vendor partnership and how you can best meet their needs.

If you have any questions, please send a note and continued success selling to distributors.

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