You could have the most amazing product on the planet but without proper distribution to get that item out into the marketplace, you're going to end up with a warehouse full of inventory wasting away. The right distributor will get your product to as many potential customers as possible but how can you find that partner?
The following steps should provide an informative road map for picking a distributor for your new product.
Step 1: Do Your Research
Find out who is distributing similar types of products in your area. The big brand name players handle their own distribution, but as a small business start-up you should be able to find many options in your neck of the woods. You can also ask for recommendations from other business owners. Another great resource is an industry trade show. You're sure to make many contacts there for potential distributors.
Step 2: Set Up Interviews
Once you've narrowed down your list to the top picks, you'll want to set up meetings to pitch your product. Keep in mind that you're looking for a viable partner not someone who is just going through the motions of shipping your product from one outlet to another. You want them to be excited about the product that you're offering. If you don't get a strong sense of their dedication then they're not going to be the right partner for you.
Step 3: Get the Stats
As you get down to the top candidates, you'll want them to "sell" you on their abilities. Ask for previous sales figures, marketing campaigns and how much reach they'll have across the country. Can this distributor roll out a product nationwide or are they restricted to a single coast region?
Step 4: Crunch the Numbers
A distribution fee will be factored in as a percentage of your production costs. The key is to keep those costs down in order to improve your profit margins. You might find that the distributors you are considering are all offering the same rates. However, a one or two percentage point difference can add up to substantial savings.
Step 5: Work Out the Process
You want to clear about expectations on both sides. How will you get your product to the distributor? What will the payment structures be? Who will be handling quality control and tracking?
Step 6: Check References
Finally, you'll want to follow up on the references provided by your distributor candidates. Call up those businesses and find out how effective those distributors have been. Make sure to ask about any problems they might have had.
The best decision to make is an informed one!