What Are Distributors Looking For?
What Do Distributors Want to Hear
When you’re trying to attract new distributors and attempting to create a positive long-term relationship with these individuals, you should be aware of what your distributor wants to hear. Here are a few things you should know when entering the business realm and dealing with distributors:
Unique Selling Proposition:
First, it’s vital that your product has a Unique Selling Proposition (USP), or that it offers something that another product doesn’t. This gives your product inherent value and will compel the distributor to give up some of its shelf space. Next, when talking with potential distributors about new products, it’s important to know your numbers.
The cost of using a distributor for your products comes in the form of markups on products. When you price your products, you’ll have to take into account the product margins, or the fact that distributors typically want 15-35% margins for the products they distribute. The better the margins you can offer distributors, the more attractive your product will appear, and the easier it will be for you to secure contracts with them. Distributors want to hear the product margin of your new product will benefit them.
When it comes to sell-through rate, your distributor will be more than pleased with a high sell-through rate. This calculation, commonly represented as a percentage, compares the amount of inventory a retailer receives from the distributor against what’s actually sold to the consumer. What do distributors want to hear? That the sell-through rate for the month or quarter is high. A low sell-through rate means the product has been sitting stagnant on the retailer’s shelves. If this does happen, tell your distributor not to worry; you have designed advertising and promotional campaigns to remedy the situation!