How to Find Distributors
Strategic development of your distribution channels is key to ensuring long-term success and profitability of your specialty food business. Positive relationships with key distributors in your market segment will be essential to your success. Create mutually profitable partnerships to ensure that your distributors will promote your product line. Determine your short and long term distribution goals: are you seeking local or regional distribution to a specific market segment, or national market saturation across multiple segments? The advantages of choosing a distributor should be evaluated at all levels of market access and geographical penetration. A distributor purchases the product directly from you. Their services includes warehousing your product, featuring your product in their catalog, selling direct to retail accounts, transporting product line to retail accounts and handling all ordering and invoicing of retail accounts. All distribution contracts are negotiable between you and your distributor, but expect them to start around 25 percent. In other words, the distributor will take your wholesale price and then mark up that price by 25 percent.
Researching the appropriate distribution channel for your segment and product line is your first step. Most wholesale distributors service a particular market segment as identified below:
Mass market grocery
Specialty foods – gourmet – ethnic – international
Listings and advertisements of distributors are routinely published in trade journals. Progressive Grocer, Supermarket Business, Natural Food Merchandiser, and Natural Business are good resources for the natural and specialty food segments. Subscriptions are available through their web sites. URL’s are listed in web resources at the end of this page. Food Distribution International, www.fdi.com, is another searchable web site for listings in your area and segment.
Trade shows. Exhibiting at statewide, regional, or national trade shows is an excellent way to showcase your product line to distributors. Specialty food producers will often place a “distributor wanted” sign on their table to attract interest.
Manufacturers & retail contacts can be especially valuable in locating and evaluating your choice of a distributor.
Choosing your distributors
Timing. How often will they pick-up at your warehouse and what is their delivery schedule to retail accounts?
Scale. The volume of sales, market segment and the size of your account territory will determine the size of your distribution channels.
Services. What additional marketing support services do they offer?
Negotiation. How flexible are they in developing contract conditions?
Contracts. Thoroughly review your contract agreement and makes sure the contractual relationship suits your current and future needs.
Types of Distribution Channels
Creators, marketers, and manufacturers of specialty food products may access target markets through the following distribution channels: Specialty / Gourmet Foods Distributors Carry: Mainly dry groceries. Stores Served: Specialty/gourmet, health/natural, supermarkets, combination stores. Service Type: Pre-sales, drop-off. Some offer merchandising. Health / Natural Foods Distributor Handle: Mainly dry foods, sometimes refrigerated and frozen goods. Stores Served: Health/natural, specialty/gourmet, supermarkets Service Type: Pre-sales, drop-off. Some offer merchandising. Rack Jobber Handle: Dry groceries, usually high-volume items. Stores Served: All types, including food service accounts. Service Type: Full service, including merchandising.
Wholesalers Handle: Huge variety of groceries, dry, frozen, refrigerated foods, health and beauty aids, and sundries. Stores Served: Mainly super and convenience stores, but some specialty and natural. Wholesalers supply supermarkets with most of their inventory. Service Type: Drop at back door. Some offer merchandising. Warehouse Distributors Handle: Anything and everything in pallet quantities. Stores Served: Usually their own; clubs, drug, department stores. Service Type: Drop and go. Food Service Distributors Handle: Anything and everything used by food service operations. Stores Served: Supermarkets, restaurants, hotels, delis, schools, hospitals. Service Type: You order it, they will drop it off.
How to Find the Right Wholesale Distributor
By Garcia Smith
With a lot of barriers to enter the profitable wholesaling industry you can bet that the ones who have achieved any sort of success as small-sized owners are consistent and trustworthy. As a result, many of most proficient of satisfying any needs but you only need one of them though to be your best source of products for your inventory. How do you know which one? Look at these vital keys factor when making your decision.
1. What are the characteristics of a really good wholesale distributor?
First is it a legitimate business? Do not get lured in by an overly exciting appealing enticement and conduct business with an illegitimate wholesale distributor, even the offers are very striking rates. Asking about the legality of the wholesale business can be intimidating; you can check with your local government office and uncover the truth as to whether or not the wholesaler is in fact certified by law to operate a business. If it is too good to be true, it probably is.
A major pitfall like dealing with an unproven wholesale distributor can be devastating. The likelihood of someone fresh within the industry, a wholesale distributor is more liable to make many mistakes, inadequately fulfill your needs, and arraign higher cost due in part to higher overhead of operations. On the other hand, a knowledgeable wholesale distributor, not only maintains lower operational costs, they certainly take advantage of tax-exempt status that gives them the capability to offer lower market prices.
Is it better to carry out business with a wholesale distributor who performs better than its rivals than one who is not as popular? What are the advantages and competitive benefits?
You should not automatically do business with the largest wholesale distributor. The giants usually need you to meet high volume orders before they agree to any contract with you however at least with a company that has a high business rating and strong sales over a period of years as not only proven its capabilities but its dependability.
2. Is the state of the warehouses in good condition?
If at all possible, get a look at the wholesale distributors storage house if there is one. If the facilities give the impression of being neglected or badly maintained, it could reveal the state of affairs of the wholesale distributor is not consciously meticulous in relation to the quality of the merchandise it dispenses. Clearly, merchandise of inferior value are not worth reselling. Another indicator of the business condition is not being run efficiently is if it maintains an accurate inventory of its goods. Any discrepancy simply means that the business may not be a resourceful partner to take care of your needs.
3. What is the company financial situation?
A debts burdened wholesale distributor is not the ideal type business to attain as a partner that is incapable of collecting from their clients, and low cash assets. a wholesale distributor may be required to raise its rates in order to manage its debts and recover its financial position.
4. Are there product policies?
Reading the company policies ahead of time will provide you with a good idea whether the wholesale distributor will proceed justly towards you in potential transactions. What do you do if the shipment delivery is late or if the product delivered has been damaged? Be clear in your mind that your contract included any circumstances he previously specifies.
5. Can a large network of contacts be to you benefit?
An astute wholesale distributor is attentive to the fact that it is also imperative to facilitate strong associations with the individuals it in some way deals with, like retailers, labour organizations and public officials and not exclusively manufacturers or retailers. With a large set of associates or contacts, a wholesale distributor will have the benefit of more sales and as a client, you will also profit from partnering with a wholesale distributor that depend on several contacts. Generally speaking the more contacts one has the greater the chances that it will lead you to more choices, and ultimately, better prices. The wholesale distributor who gains access to more manufacturing companies, and consequently will be able to make available to you lower prices for the merchandise you are interested in selling. Attempt to survey how many other associates the wholesale distributor maintains as contacts for your best interest.
Gracia is an expert on buying wholesale from 100% verified wholesale suppliers. See more on Salehoo wholesale suppliers.
Article Source: How to Find the Right Wholesale Distributor