Picture this: your broker is super excited about your product and sells it enthusiastically. The stores you target start stocking your product and sales climb.
That’s the ideal scenario and we make it happen all the time. But the whole sales matrix—how does it work? The relationship between food brokers, distributors, and sales is simple, but finding the right players is crucial.
The food sales/distribution matrix, explained
A food broker is an independent sales agent who works for you, the brand owner, selling your products to stores. If you are developing sales channels and selling into different markets, like overseas, you may need more than one. Think of your food broker as your part-time VP of Sales.
Your food distributor buys your product from you at a wholesale price and delivers it to the stores that your broker has sold your product to. Again, if you are developing sales into new places, you will also need to develop your distribution. Simple, right?
Guard against vanishing margins
Not so fast. You’re aiming for an ideal profit margin for the food you sell, yet there are many costs. Most retailers will ask for in-store marketing support, often in the form of an up-front cash payment worth up to 20 per cent of the sale price of your product. Then, if the broker is not excited about your product, they may want to charge thousands of dollars per month up-front to represent you, or to take a huge percentage of sales. Worse, if your distributor has pallets of your product gathering dust in their warehouse, they may destroy all that inventory once it reaches its expiry date and send you a bill for thousands of dollars. Yikes!
Be profitable!
The first thing to figure out is how to calculate the ideal profit margin for the food you sell. If you’re selling a thousand products per week at three per cent profit, you might as well stay home, don’t you think? No one wants a full-time job that doesn’t pay.
Now, it would be easy to just hike your prices, but you need to be competitive—shoppers are nothing if not price-conscious. The best idea is to get your ingredient, manufacturing and
packaging costs down…and then find the right broker/distributor relationships. That’s where we come in.
Lining up all the pieces
We can help you create the right product, at the right margin, with the right branding, to get the right broker excited about your product. Because excitement is contagious. When your broker is excited, chances are higher that stores will be enthusiastic about taking your product on. So when the pieces line up—the product, the branding, your ideal food profit margin—your broker will take your product on at minimal up-front cost and negotiating prime shelf space on your behalf.
Ready to get moving? Let’s captivate your market! Arrange your free consultation.