What Are Distributors?

When a buyer asks you “How are you distributed” and you don’t know what to say.

I’ll never forget the first trade show I went to in Atlanta. I was building my plane as I flew. I did not know exactly how we were going to get my products to retailers but I knew we would figure it out. Whether “figure it out” is a strategy or not, I’ll leave that to you, but I learned the hard way that having the right distributors can make or break a business.

How do I choose?

This really depends on your product, channel strategy, target market, funding and geographical scope. If you are focused on the healthy consumer in the Mid-Atlantic region for example, you’ll want to select a local DSD (direct store deliver) service with a group that is known to take care of products like yours. Some people will say you need to work with UNFI or KeHE but if you are just starting out I would be very careful about that. I do not recommend those distributors until you hit certain inflection points which we can discuss on a call.

What are the different types of distributors in the United States?

• Wholesale Distributors:

  • Primarily deliver to the back of a store or a central distribution center, operating both regionally and nationally.

  • Focus on bulk distribution without much involvement in what happens once the product is delivered.

  DSD (Direct Store Delivery) Distributors:

  • Provide more personalized service by delivering products directly into the store.

  • They also inventory, stock shelves, maintain placement, and handle merchandising.

  • Brands pay more in margin for this comprehensive service, which often includes setting up and maintaining accounts.

  Key Consideration:

  • Every channel (like grocery, convenience, specialty stores, etc.) typically offers both wholesale and DSD options. It’s essential to define your target channel before choosing your primary distributor.

One simple way to make this important decision is to ask your target stores or restaurants who they work with. They will likely give you the largest distributor first since that’s most likely top of their mind, but follow up with the question: “Are there any smaller, local distributors you really enjoy working with and who deliver every week?” Then ask for their local account rep for that distributor and reach out. Another hack to find out which distributors deliver to your dream account is to check the price tags. You will often see a code which ties in with a distributor name.

If you’d like help securing your dream accounts, or preparing questions and answers for your ideal distributor please set up a 90 minute call with me and we can map out your strategy.