How To: Find Distributors These middlemen can get your product on store shelves. Here's how.

When Ronn King started his own company to make a new type ofpaint mixer, the toughest part wasn't coming up with theidea--or even figuring out how to manufacture it. The toughest partwas persuading retailers to stock it.

Most national retail chains would rather buy a hundred productsfrom one supplier than one product each from a hundred differentsuppliers. So small manufacturers have a tough time breaking intothe game, says King, 47, co-founder of Site-b in Spokane,Washington.

King's company makes a paint-stirring device called theSquirrel Mixer. More than 120,000 were sold worldwide in 1997through such major stores as Home Depot.

The inventor's success came with the help of distributorsand independent sales representatives. These allies can pioneeryour product into new geographic areas, get it into stores thatwon't even talk to small manufacturers, and provide valuableservices, such as fast order fulfillment.

But distributors can be as difficult to woo as retail buyers.Winning them over takes time, research and hard work. Here are ninesteps to success:

1. Get your product market-ready. "Mostnew manufacturers aren't prepared to go to market," saysJoseph Coen, president of ASKCO Marketing Services in Kure Beach,North Carolina. Coen's company serves as a matchmaker betweenmanufacturers and distributors to food, drug and gift retailers.Before going to market, manufacturers must resolve issues rangingfrom the most appealing packaging to the best way to ship theirproducts, he says. They also must find a price consumers will paythat still means good profit margins for retailers, distributorsand, of course, themselves.

"The product needs to have a point of difference,"Coen says. "If the product is lotion, the only difference isthe fragrance and maybe a few ounces [more product] per bottle. Themanufacturer must create a perceived difference withpackaging or marketing."

New manufacturers must prepare sales materials that tellretailers the product's benefits and its statisticalinformation, such as how much space it needs in the warehouse andon the shelf. Production capacity is also a major issue, Coen says:"You can't sell to Wal-Mart unless you're ready tomanufacture millions of units."

2. Understand whom you're selling to.Most manufacturers don't sell directly to the consumers whoeventually use their products. Instead, the manufacturer'smarketing strategy must aim at sales through dealers ordistributors.

Most manufacturers, distributors and independent sales reps dealwith a narrow range of products. They know each other and referwork to each other. That worked to King's advantage when hefirst tried to sell to retail chains. Several turned him down, butone buyer referred him to a manufacturer's representative whocarried dozens of products for many companies. That rep took on theSquirrel Mixer and referred King to reps in other areas.

A distributor or sales rep wants to carry products that sell inhigh volume. If you can't promise huge sales, you might have tolure distributors with high profit margins, King says. If youcan't raise the retail price, that extra margin will come outof your profit. "It sounds expensive," King says,"but compared with the cost of reaching customers yourself,it's not."

3. Target your market. One way to focus yourmarketing is with targeted mailing lists, which you can often findthrough trade associations.

If you use such lists for direct-mail advertising campaigns,plan to send out at least three separate mailings, then follow upwith phone calls, advises John Metscher, a business analyst withthe Central Ohio Manufacturing Small Business Development Center inColumbus, Ohio. "One mailing is a waste of money. Don'tgive up; you'll be surprised at the results," saysMetscher. He also recommends advertising in carefully selectedtrade journals targeted at the industries most suited to yourproduct.

4. Create demand. The manufacturer--not thedistributor or retailer--must make consumers want to buy a product.That can involve cooperative advertising campaigns with retailers,display stands, signs, fliers, brochures and other marketingmaterials, Coen says.

"Each year, about 25,000 new mass-market items areintroduced," Coen says. "The manufacturer must doeverything possible to encourage [consumer] acceptance."

5. Prove your product will sell. A newcompany may have to prove its product will sell before distributorsand major retailers take notice, King says. He first startedselling the Squirrel Mixer by mail order and to a few local retailstores to prove consumers would buy the device."Distributors' sales forces started seeing the SquirrelMixer in several stores and asked [the stores] about it," Kingsays. "Even then, the distributors didn't call us. We hadto call them."

6. Ask questions. Many new manufacturersdon't even know where to look for distributors and salesrepresentatives. King found many of his by asking questions. Heasked retail buyers for names of distributors; he calledmanufacturers of similar products and asked whom their distributorsand sales representatives were; and he studied industry magazinesfor names and ads.

Many trade groups have distributors and reps as members.Encyclopedia of Associations (Gale Research) lists thousandsof associations; look for it in your local library.

7. Attend trade shows. "Take an exhibitbooth, either by yourself or in partnership with another companywith complementary products," Metscher says. As with othermarketing efforts, choose a trade show targeted to your market.

At the show, collect business cards from prospectivedistributors or sales reps, then follow up after the show is over.Even if you can't afford your own booth, attend the shows thattarget your industry. "Shows are good places to network andidentify the people and companies that will buy yourproducts," Metscher says.

8. Select distributors and sales repscarefully. Ask others in your industry for referrals togood sales reps and distributors. When considering reps, ask fortheir credentials and references. Look for reps and distributorswho carry similar but noncompeting products and who sell to thesame geographic territory and type of retailer who carries yourtype of product.

Distributors usually buy some of your product and store it attheir warehouses. Good ones fill orders quickly and accurately andhelp build a market for your product. Independent sales repsdon't buy your product, but they should aggressively sell yourproduct in markets you can't reach.

"You need to check out eachrepresentative,' " says Jill Ford, author of GiftTrade Marketing (J. Ford Co., $33.95, 949-240-3333). "Werecommend you hire three. You'll find one will produce, onewon't, and one will be somewhere in the middle."

9. Find private label partners. Even thoughKing has succeeded in getting the Squirrel Mixer into thousands ofstores, attracting distributors "continues to be a problem forsmall companies even when you prove you have a good product,"he says.

That's one reason he allows some major paint companies, suchas Hyde Manufacturing and Red Devil, to put their brand names onhis mixer. This is called a private label agreement. Largercompanies have more products to sell, which distributors andretailers prefer, and have more extensive distribution channels.Like building relationships with distributors and sales reps,attracting private label deals takes time and effort but can be avaluable part of your marketing strategy.

Jan Norman is a freelance writer who specializes insmall-business issues. She can be reached at jnsmallbiz@aol.com

Give And Take

The relationship between a product's manufacturer and adistributor is a two-way street. Each must fulfill certain tasks toget the product to market and keep it on the shelves.

The manufacturer's role:

• Make a quality product.
  
• Use advertising and other means to create demand for theproduct.
  
• Provide marketing materials.
  *Have the capacity to fill any order the distributorgets.
  
• Offer incentives to distributors' sales forces.
  
• Don't undercut your distribution network. When customerscall you directly, pass their orders on to your distributor orsales rep.
  
• Provide technical support or other quality customerservice.

The distributor's role:

• Respond quickly when the manufacturer passes on salesleads.
  
• Provide storage for products prior to sale.
  
• Fill customers' orders quickly and accurately.
  
• Assist in building a market for the product.
  *Give customer feedback to the manufacturer.

A Closer Look

Before you sign on with a distributor, know what to expect fromthe relationship by asking these questions:

1. What are the distributor's credentials andbackground? Check references.

2. Does the distributor cover a territory you want toreach? Does it compete with your other distributors?

3. What other products does the distributor carry? Are theycompatible with yours? Do they target similar customers?

4. How well does the distributor know the market and itspotential?

5. What are the terms of the distribution agreement? Arethey too costly?

6. What are the terms for terminating the agreement?

Contact Source

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