Wholesale Distribution Tips for Your Business

 

Are you an enterprising distributor who would like to expand business and distribution chain across state and national borders? You can do that in phased manner by detailed study of successful business models which have been used by wholesale distributors in the past to expand their business. The wholesale distribution business is based on volumes and your ability to negotiate prices from both manufacturers and retailers. The first step you would need to take before starting a wholesale distribution business is to decide the area you would like to service and the volumes you can distribute.

 

There are varied types of wholesalers who serve their customers like c-store chains, grocery store chains and also standalone stores on a local, regional and national level from strategically located warehouses. Depending on your business experience and financial background you can either be a small volume or large volume distributor and can grow gradually. Though the internet is an obvious choice for most research oriented subjects it can only help you in a limited scope where wholesale business in concerned and you will learn more about tricks of the trade from others in the trade. Carry out detailed research about which products sell the fastest and ask for products in demand which will give you a fair idea.

 

Tips for ensuring success of wholesale distribution business

 

Strong product portfolio – Carry out a detailed research about which products and services will give highest returns and also study the hassles of managing them. Durable products like cigarettes, lighters, personal hygiene and beauty care products, air fresheners, bathroom cleaners, batteries and paper products are the best items to start when starting a wholesale distribution business. These products do not require special storage facilities and are used frequently therefore will always be in demand.

 

Identifying reliable suppliers – The success of any wholesale distributor’s is dependent on his suppliers who are its pillars and supply the lifeblood of products which can be distributed to c-store chains, grocery chains, wholesalers and dealers. There are several distributors and big stores dealers who can provide the manufacturers higher profits as they directly sell it customers but their geographical area is limited. When you are discussing contracts with manufacturers confirm the exact quantity that they can supply to you on a monthly or quarterly basis. Besides quantity you also have to work out price levels that manufacturers will charge, if price levels fluctuate on a regular basis then it will affect your margins and it is advisable to avoid business with these suppliers.

 

Merchandise variety – Try to have a varied portfolio of products which are generally required by stand- alone convenience stores in remote locations. The larger your merchandise list you will have a better chance at being single distributor to small grocery stores and merchants in your area. Both large chains and small stores prefer buying their merchandise from few wholesale distributors and suppliers instead of working with several to have better credit lines and control over product quality and supply.

 

Introduction of new products – As a distributor you must always be on the lookout for new and exciting products that can enhance your portfolio and bring new customers. Your ability to identify interesting items whether they are perishable or nonperishable will make your supply trucks a welcome visitor to all your convenience store clients. Keep an eye on the competition for information about new products and their market demand. If you can find valuable products which can create profitable footprints on the checkout counter then it will help improve your profits and also of your customers.

 

Develop relationships in business – Every business enterprise thrives on building relationships whether it is between distributor and his clients or between c store owner and his customers. Your behavior as a distributor of essential supplies to every c-store manager or a grocery store owner should be centered on building longtime relationship of cordiality and mutual benefit. If you spend time with your clients every time during delivery to discuss business and local gossip and also help them to decide about display sections or other issues it will show that you actually care about their business. A similar strategy can be adopted with your manufacturer/suppliers and they will keep you updated about new products in the pipeline and also provide products at a better price.

 

Importance of location – Even if you have started your wholesale business on a small scale by making deliveries to local stores do not limit your resources to a small group of buyers and keep expanding your clientele to include as many stores as possible in the shortest possible time. Wholesale distributors generally start their business by servicing 150-200 locations on a fortnightly basis and over a period of time they shorten it down to 75 – 100 stores which provide them steady business and profits. Even after you reach a comfortable business turnover level do not rest on your laurels but keep exploring for products and clientele across state boundaries as nothing in this world is forever.

 

Enjoy business with profitable agreements – After identification of suppliers and retailers have valid agreement with them about concerns like return policies, large volume discounts, pricing terms, delivery schedules and time lags for every order. This will ensure that your profits remain secure for a particular period of time until the contract gets renewed gain. Keep learning from your experiences and you will never lose in this business. Keep meeting traders, manufacturers and actively participate in trade association meetings which will give you updates about changing market trends. Unless you like the business you are in it will not earn you required profits and your products will soon lose their “X” factor.

 

This business requires constant change and to stay ahead of the pack and distinguish your brand from the regular distributors and dealers you have to be smart and innovative. Maintain a visible profile at all trade shows and wholesale distributor association meetings. Keep expanding your network of suppliers and customers which will give you better profits and negotiating power. On a regular basis evaluate your suppliers and customer to root out the unprofitable or unreliable ones and concentrate on the profitable ones.

Top 10 Food Distributor Associations – Wholesale Grocers

 

A large percentage of wholesale distributors and dealers who supply and distribute products to convenience stores across the nation generally deal with a wide variety of convenience products besides food and beverages. Besides helping manufacturers get their products into grocers, convenience stores and markets they also work as partners for these retailers to get them new and innovative products which can help increase their clientele and profits. Before launching a food brand on a national level, manufacturers generally take the view of local markets and launch it on a small scale.

 

Once steady demand for a food product builds up, the manufacturer takes the next positive step forward to launch it nationally. This is a tedious exercise as the manufacturer would now have to search for an ideal distributor/dealer/agent/broker who can market the product in a profitable manner through a series of presentations and discussions about profit sharing, marketing and promotions. Instead of meeting each retailer or wholesaler to sell your product the best alternative is to make a presentation before their association members and let them gauge if your product is the next rising star on the horizon among food products.

 

Just as retailers and wholesalers in different locations around the nation have formed formal associations to protect their interest and manage common problems, distributors and agents also have their traders groups. While some specialist food product groups work only with food and beverages in different parts of the nation, general convenience store wholesalers distribute several products to few convenience store chains and the profits earned are sufficient for them to expand beyond a certain limit. These associations work as non-profit self- help groups and assisting wholesaler-distributors to streamline operations by having an efficient distribution channel which enables benchmarking products and networking to sell products through strategic partnerships.

 

American Wholesale Marketers Association

 

This is an international organization of traders working with convenience store distributors within United States and has an annual turnover of $85 billion. Its members include people from product, distribution and retail sector who are integral to convenience store business. Convenience store owners, distributors and manufacturers come here to understand regulations related to production, distribution and storage of all categories of convenience items ranging from candy, tobacco, snacks, beauty products and general merchandise.

 

National Association of Wholesale Distributors

 

Regarded as the largest associate body of wholesale distributors in the nation it is also a powerful influencing agency of government regulations related to wholesale supply business. Besides ensuring smooth transition of new regulations related to staff healthcare, product quality and business development. The association was setup in 1960’s to protect rights of manufacturers and distributors in the food services industry. It works with new manufactures to launch their products among retailers by bringing them together with member’s wholesaler suppliers who can carry forward their goods to right retailers and target customers.

Northeast Wholesale Food Distributors Association

 

This dynamic group is concentrating on fulfilling requirements of citizens in the North East region and works with distributors, wholesalers, manufacturers, retails and brokers in the food distribution industry. Regarded as one of the oldest food traders association as it was established in 1875 its main purpose is to remove bottlenecks in food distribution support new products.

 

National Grocers’ Association

 

This national level trade association represents both retailers and wholesale grocers’ which are not part of a large chain of stores. Though a few of these firms are traded a majority of them are still owned by families which carry out both management and distribution work by themselves. The members of this association operate varied sizes of stores and are an important part of the community where they carry out their business due to their long term association with people in the area. The independent grocers group last year generated nearly $130 billion in sales last year.

 

National Poultry and Food Distributors Association

 

The association was built in 1967 to bring together distributors and processors’ in dairy and poultry industry by setting up a forum. If your product is in this category get in touch with them as the association always works towards fostering long term relationships. For the past 40 odd years the association has worked distributors and retailers to improve supply logistics of food products and ensure that they reach consumers in time. Manufacturers use the association’s convenience store directory and database to make meaningful contacts with retailers and offer discounts to improve profit margins.

 

International Food service Distributors Association

 

The group evolved with food service distribution and restaurant industry and has been growing since 1980 by providing mass market food products to reduce hunger in the nation. The association consists mainly of family owned businesses and the modern distribution operations of food products use temperature protected zones for preservation of these products during storage. Manufacturers bring in their produce every morning which is then divided up according to location and sent for delivery early next morning. The association has nearly 15000 members which either own warehouses or transportation fleets serving between 1000 – 6000 convenience stores from one warehouse.

 

Food Processing Suppliers Association

This traders association was created in 2005 to merge the powers of Food processing machinery groups and Association of Food Industry suppliers. It was made to help each member find their niche in food processing and distribution industry and compete on an equal level with others. All the members of the association are in the field of food processing, dairy goods supply, meat and beverages.

 

 

Food Ingredient Distributors Association

 

Established to bring professionalism and steady growth into food ingredient industry it has formulated standards for storage and distribution of food ingredients. Besides enabling spread of new ideas and distribution channels across the supply chain, the association also protect members’ business interests wherever required.

 

American Commodity Distribution Association

 

Committed to improving USDA’s mission of ensuring food for all the association works as a communication link between members of agriculture sector and government and retail sector. It works as the collective voice of all stakeholders in food processing along with food delivery and distribution industry to speak about decisions which will have a long-term impact on food distribution. The goals of this association include better undertaking of issues that plague the food processing industry.

How You Can Use Wholesale Grocers to Get Your Product into Grocery Stores

 

In today’s scenario of large chain stores selling a wide range of items used in homes from grocery items to fruits, vegetables and household cleaning stuff, it is difficult for small grocery stores to sustain themselves. Under such circumstances, every manufacturer who wants to get his products into grocery stores has to work in partnership with wholesale grocery distributors or chain stores to sell his products to buyers. If you have a product which can be supplied to local C store chains then make a detailed list about similar products available in stores in your neighborhood and then decide how to market your products to make them different from competitors. To sell your products at leading grocery stores, you have to work with wholesale grocers who have a variety of products from different manufacturers in their portfolio.

 

Steps to get a wholesale grocer to sell your products to grocery stores

 

1) Product insurance – The first step before getting your products into a grocery store would be to purchase a product liability insurance which protects you from any danger or injury that may befall a customer using your product. Any wholesale grocer will inquire about insurance validity of your product before they agree to distribute your product/s to grocery chains.

2) Procurement of Uniform Product Code – To have a unique code for your product registering with the Uniform Code Council is essential. This will ensure that all your products have a bar code on labels which will help to track your sales and inventory in the supply chain.

3) USDA certification – To have your product graded and certified by USDA schedule an inspection of your production facilities. After your premises are certified for hygiene and safety have your product testing by their labs so it gets necessary grading making it safe to be sold through grocery stores.

4) Advertising your product – Create fliers and brochures for your products which can be inserted in local newspapers around the stores where your products will be stocked. Build a website for your products and carry out an effective online campaign with videos about product usage, advantages and how it can add value to users’ lives. Encourage wholesale buyers to purchase from your website with order forms and contact details so they can get in touch with you directly for their requirements.

 

In your brochures and website , remember to write down details of your products’ ingredients. Most shoppers read through ingredients and its nutritional qualities before trying out any new products and this information will make your products stand out from competitors. Try to include testimonials about your products as soon as you get some positive feedback about them as it can help convince new customers to try out your products.

 

Product demonstration – Meet the decision making authority of the wholesale grocer who can market your products and ask for time to demonstrate your product and build an effective value proposition. Leave samples and order forms with these decision makers as they can suggest which markets and stores would be best suited for your products. They can also make suggestions about how to present your products within a store to gain attention of customers.

 

Registering with trade organizations – To get your product recognized among small and large wholesalers you can register yourself as a vendor with trade organizations. National bodies like Natural Grocers Association, National Products Association or local traders associations in your area to network with wholesale grocers and sell your product. You can also showcase your products at sponsored trade shows of these associations and get orders from wholesalers and retailers directly.

 

Identifying your target customer – While pricing your product make sure that it meets the expectations of your customer base and is within their budget by comparing it with other similar products in the market. Price should also meet the profit margins of grocery store, wholesale grocer and along with providing you a decent margin after covering your manufacturing costs. Conduct your market research by selling your product at local farmers’ market and collect feedback by giving out forms for them to fill up during their next visit.

 

Identifying a wholesale grocer – Within the United States there are several wholesale grocers who sell daily use groceries under their own brand to chain of convenience stores and grocers who are their customers. Before approaching a wholesale grocer to sell your products into stores make sure they do not have any products remotely closer to yours as only then they can be convinced to push your product into small grocers. Get a vendor procurement form from wholesale grocer who can effectively sell your products and fill in details which will show that your company can meet their demands.

 

Follow up steps to make sure that your product is successful at the grocery stores – Now that you have found a suitable wholesale grocer to distribute your products and the distribution part is taken care of, you have to take steps to see that it reaches consumer homes too.

 

• Make a personal visit to grocery stores where your products are being sold to gather first hand customer feedback. You can also work with the local grocer to give your products a better vantage point to catch customers’ interest.
• Give product samples to the grocer too so they are convinced about your products and can promote them.
• Be on the road for the first few months and meet individual grocers and customers on a regular basis to collect feedback and improve distribution channels to establish a market.

 

As a manufacturer you should remember that the wholesaler can help distribute your product to customers through grocery stores but cannot sell them for you. This last step has to be taken by the manufacturer to make sure that customers buy his product from existing options available. Effective product promotion and advertisement has to be carried out to improve sales and establish reputation in a competitive market. Build a strong marketing campaign highlighting the value proposition of your product and its properties without comparing it with existing products available in the market.

How to Find Wholesale Grocers

How to find Wholesale Grocers on the internet may be difficult, so I would visit www.wholesalegrocersdirectory.com. We provide a list of over 2,000 wholesale grocers and over 2,500 food service distributors.

 

The following issues have to be kept in mind while looking for a wholesale grocers for your product

 

1. Portfolio of wholesale grocers – There are different types of wholesaler grocers who supply products to Grocery store and Supermarket chains and also grocers which consist of only food products. Some wholesale grocers have their own vendors supplying food products which are sold to grocers and c store distributors under their own brands. If the wholesale grocer has too many products which can be your competitors then avoid them.

 

1. Outreach of wholesaler – If you are planning to have a nationwide launch for your products then a wholesaler with reach into regional or statewide markets will not be effective. You need to carry out extensive research about a wholesaler’s distribution network and the time he will take to distribute your products across grocery stores. As your products have to be available on shoppers’ shelves after a marketing campaign it is essential that your distribution cycle is effective too.

 

1. Experience of wholesaler – While making a sales pitch to these wholesale grocers make an attempt to find out if they have sold products similar to yours in the past and what has been their experience. This will give you a fair idea if they will be able to distribute your product effectively or if they will be able to identify potential markets.

 

1. Does your wholesale grocer supply to both c store chains and grocers – Decide whether you want your product stocked at a convenience store or a grocers chain stores. Remember a convenience store is not always the best place for your food products but in a remote location it is the likeliest place customers will drive in for their daily requirements.

 

Before you find wholesale grocers for your product you need to perform necessary steps as a form of groundwork for your products which will help sales once they land on grocers’ shelves.

1. Collecting necessary permits and insurance – To make your product suitable for sale in grocery stores you need to have necessary permissions and certificates from state’s health department to show that your product is fit for consumption. Insurance to protect yourself from perceived injury that a customer might face from your product.

 

1. Packaging and labeling – An attractive package with information about quantity of ingredients, product manufacturing and expiry dates and details of nutritional value of each product will be required to make your product suitable for display. Though suitable ready made containers can be purchased from suppliers, their designing and labeling has to be done in a professional manner to give your product a unique look and feel.
2. Participate in trade shows and network – Participate aggressively in farm markets and trade shows in your area to spread word about your products. Network with wholesale grocers at trade meetings and shows to showcase your products and the value it can add to their product portfolio. Share samples and contact information with them along with attractive discounts you can offer for bulk purchases.

 

1. Prepare a suitable media campaign to back your product launch – Just distribution of your product will not sell it, you have to convince buyers of benefits form your products. Make a convincing media campaign which can be shown via television commercials or online advertisement campaigns through social media. Have an interesting website with videos or audio clips about how to use your product and its benefits.

 

1. Can you meet growing demands of business – While setting up a advertisement campaign or ironing out your distribution channels check if you have the capacity to scale up if demand for your product increases. Keep contingency plan and resources in place which can be helpful if you are given a big order which can make or break your business.

 

Are you going to use full service or limited service wholesale grocers – As the name states, full service wholesalers provide a host of services to their vendors which include assistance in stocking, pricing and display across grocery stores they service. Limited service wholesalers generally service local stand alone stores and convenience stores chains and have limited storage and distribution facilities.

 

Zeroing on the right wholesale grocer to sell your product – The packaged food industry within United States is extremely competitive with sub categories of every product which makes it confusing for buyers to remain with a particular brand for a long time. While some producers want to remain limited to their local markets and loyal customers, others want to make a splash in national markets. Every grocer has to make a detailed study of market and reach of wholesale grocers before zeroing in on the right one who can meet their existing distribution needs and future growth requirements.

Make a marketing plan and distribution strategy when you are going to meet a potential wholesale grocer who can be your partner in profits. Unless you convince him about utility or unique sales point about your product he cannot convince grocers to stock your products. A strong channel partner with a powerful list of convenience chain stores in its client list can help take your products to right customer base. When you are using a wholesaler network for marketing your products remember to meet each and every grocer where your product is likely to be displayed to develop a sustainable promotional strategy.

The only way you can find a list of wholesale grocers is through the Wholesale Grocers Directory http://wholesalegroce.wpengine.com. Research and frequent meetings with their management and also with the store owners where they distribute their products. Choosing the right distribution channel can help sell a product and give it a competitive edge over others who may have similar ideas.

Wholesale Grocers for Grocery Stores

 

Wholesale grocers and grocery stores have a business relationship that is built on economics and trust. This is the business network that helps bring goods to their final consumers. Every grocery store needs a dedicated group of not one but many wholesale grocers.

So what is the business model that connects wholesale grocers to the grocery stores? Or what is this network that brings business from wholesale grocers to the grocery stores? What does the process entail?

The distribution network between wholesale grocers and grocery stores

Wholesale grocers bring products to the grocery stores. In most cases manufacturers do not work directly with retail stores. There are some manufacturers who set up their own distribution networks to do direct business with the retailers. This is seen more so in the last few decades. But it is still not very common. Either way, whether a manufacturer sells their products through their own distribution business or through other wholesale grocers, it is the wholesaler who deals with retailers. This section of business – that is selling goods to retailers – work through its own methods and processes.

Now to talk through examples, which still follow the traditional manufacturer to wholesaler to retailer cycle; a wholesale grocer is the middleman here. Wholesale grocers are the link between a distributor and a retailer. This is a very crucial link that builds or breaks businesses.

Wholesale grocers introduce new products to the retailers. They are the ones who get to decide first and foremost what product is going to the next stage of the distribution cycle. One particular wholesale grocer might not like a particular product and decide to not distribute it while another grocer might decide to go ahead with it. This will decide what retail grocery stores are selling what products.

For instance, if a wholesale grocer decides to not distribute a new type of jam then all the retail stores in their network will not get to see that new type or brand of jam and decide if they want to stock it or not. Where as if wholesale grocers decide to go ahead with this jam then all the retail grocery stores in their network will get to see and test this jam.

Another scenario is that a retail grocery store might be served by say two different wholesale grocers. Then if one brings the jam to the store and it becomes a hit with the consumers, and the other wholesaler might fall out of favor if this becomes a regular thing.

Deciding on what products to sell or at what cost is a job function of the wholesale grocer. This is very important as they can make or break a product. Not only they introduce new products to retailers; they also have the power to decide if they want to discontinue the distribution of a product or sell a new one. Mostly the cost factors decide these things.

Wholesale grocers also have the control over what products to distribute and what cost. If wholesale grocers, through their network or business association, decide to not distribute a certain product then both the manufacturers and retailers are at a loss. This could be for a number of reasons. One instance would be when a manufacturer is being a bully and not negotiating on pricing for a certain product. The wholesale grocer being the middleman does have the power to control the distribution and cost of a product.

Wholesale grocers bring the best of the products to the retailers. Wholesalers also work on profit margins. The more products and categories of products they sell to retailers, the more money they make. The more profit margins wholesale grocers can work out for themselves, the better pricing they can pass to the retail grocery stores.

Wholesale grocers also bring the best of promotions and offers to the retail grocery stores especially when a manufacturer is launching a new product in the market. This is how retail stores are always running some promotion or the other for the consumers. Retails grocery stores also get free gifts or special holiday discounts to pass on to the end-users. This is the reason retail stores are filled with shiny new packages during Christmas times and other holidays.

The trusted network between wholesale grocers and grocery stores

Business relationships are necessary for the sustenance of any business. How well a business partnership works is an important factor in how well a business runs.

The wholesale grocers are the link between the manufacturer and the retailers. Grocery stores will run of out milk or a brand of yogurt if the wholesalers refuse to distribute it. Yes, manufacturers can directly reach the retail grocery stores. But establishing the distribution side of business is not easy. It takes years of dealings and trust and a strong network to run a successful distribution business. It can’t happen instantaneously if a distribution problem arises.

For instance, if wholesale distributors collectively decide to boycott a product then there is nothing a manufacturer can do in a short period of time to have the product reach the retail grocery stores in the same amount of time as the wholesale grocers can.

Wholesale grocers also have a trusted circle of retail stores where they bring their best products and discount offers. This is true for any business relationship. These business relationships between wholesale grocers and retail grocery stores build over the years through honest business transactions and mutual benefit. This relationship also ensures that a retail grocery store can ask for the stock of a particular product that is in high demand during a season but low in supply.

Why will wholesale grocers prefer one retail store over another? The reasons of course are nature of the business partnerships. Distribution networks work on credit. Those retail stores who pay the wholesale grocers on time will help make the wholesaler make its payment to the manufacturer in time. This is one major reason, which helps develop good relationship between wholesale grocers and retail grocery stores.