What a Distributor Wants to Know
Working with Mr. Checkout Distributors could be an amazing platform to launch a product nationwide. The challenge working with distributors is developing relationships on a one to one level.
A distributor is mostly concerned about:
The level of profit they can make on your product
The cost of stocking and fulfilling your product
Whether your product is scalable
Whether you sell multiple products
The reasoning behind the first two points is obvious. Retailer or distributor, profits and costs are paramount.
Scalability is especially important if your product is relatively inexpensive. For example, if your retail price is $25, and the price you plan to charge retailers is $12.50. You'll need to charge the distributor even less so they can make money--say $10 or less.
Your ability to supply multiple products is also important, because distributors care about administrative costs. Distributors like to sell multiple products from individual suppliers for the same reasons retailers like to buy from distributors instead of from dozens of individual suppliers.
So before you pitch a distributor, put yourself in their shoes. They'll be asking themselves questions like:
How much profit can we make off his product--both per unit and in total?
Can we make a better profit selling his product compared with selling a similar product?
Will his marketing efforts help drive our sales?
What inventory levels will we need to maintain?
How will stocking and fulfilling his product affect our cost of distribution?
Are customers asking for a product like his? Does it serve a need our retailers have already identified?
Does he have other products we can sell? Or will he probably have other products we can sell?
The key is to remember that distributors evaluate your product using criteria different from your eventual customers'. No matter how exciting or innovative the product is, if your company will be a pain to deal with and, more important, the distributor can't make a profit, they won't buy from you.
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