Navigating the World of Retailers, Distributors and Brokers

January 28, 2019

Getting your product onto store shelves is a big challenge for many companies. But getting it OFF the shelf and into the hands of a customer is an even bigger challenge.

As NPC and NRC-IRAP help a cohort of Canadian companies prepare for Natural Products Expo West, we’ve talked to a lot of experts and trade show veterans about the best ways to approach the key players in this process, including: retailers, brokers and distributors. In this article, we feature some salient thoughts from Hans Arthur Black, food industry mentor at Food-X, and co-founder of Soyummi Foods.

Lots of companies say they can’t get a retailer without a distributor, and they can’t get a distributor without a retailer. What’s the deal?
There’s definitely truth to both statements, but it’s not quite that black and white. You actually want to step back a little and look at your ideal customer. You know your product best, and you should know the customer segments that love it. Use that information to select the retailers that attract those customers. Then when you speak to those retailers, you’re already showing them that you’re a proactive and savvy partner in their sales.

But once you’ve convinced the retailer to take your product, you need a way to get it to them.
Absolutely! But connecting with those retailers is part of that solution. You can ask them directly which distributors and brokers they like to work with. It can be a great way to ensure that this key relationship in your sales process is one that works well for both of you. It’s also a great way to inform you of reputable potential partners that you may not have been aware of, especially some of the smaller ones that may deal with niche products or specific geographic regions. The big distributors like UNFI and KeHe are great, but the smaller firms can be a great match for companies just entering into the US markets. Plus, each of those potential new partners has another whole network of connections that can be helpful to your sales.

You mentioned brokers. What’s your advice on working with brokers?
The right broker can be worth their weight in gold. They should know the territory, have great connections, and should watch out for your product and sales, which is especially important for Canadian companies who can’t just pop in to a store to check on things.

But like any other industry, not all brokers are created equal. There are big, national firms, and there are independents and everything in between. Each will bring varying levels of expertise, connections, reach and service. You want to be very clear up front what they will provide, and how they will be compensated.

For many new clients, brokers work on a retainer. That’s fine, but you want to be sure that there are reasonable time limits and a negotiated percentage for transitioning into a commission-based model, and that it’s off a net number. If they’re going to be having team members checking in on your product at the store level on a regular basis that’s worth a lot more than a single call to a head office that may or may not trickle down to product presentation at the store level.

How can companies find the right broker?
It’s definitely harder than finding distributors because of the range in size and service. The large ones like Acosta and Presence have national coverage and broad relationships with a range of retailers and distributors. But you can find smaller, regional brokers by asking your peers and the retailers you are working with – both should be able to tell you who has provided timely, valuable service.

What other advice do you have for companies aiming for US sales?
We’ve had great experiences with outside sales teams. They can be your on-the-ground support to ensure that your products are well positioned and strategically aligned to customer needs. They aren’t a replacement for a broker, but they can be an extremely valuable addition to your sales process. Companies like the Touch Agency and Ignite Sales are great examples. Again, always a good idea to ask your peers for any recommendations and to shop around for the right fit for your product and target market.

Do you have questions or comments about this topic? Or are you looking for guidance as you approach NPEW? Ask us how we can help.