Most companies from outside the United States come to us (WestWind) for master distribution in the United States so they are not shipping product to 5 or 6 different distributors in the market. So we wanted to add a little advice from our experience on, “what is your US distribution strategy?” Just to be clear we are not in the business of recommending one distributor over another (all though we know a few good ones) distributor to convenience stores, grocery stores, department stores, or the big box stores, but we have a little knowledge of how the process works. We are here to import your product and service your distributors, do you want to deal with importing 5 shipments or just importing one shipment, take your pick!
so..
What is your Strategy?
Simple it should be a three step process and let us take the food industry as an example
- Attend a US Food and Beverage Show; this is the easiest starting point to find out if your product will sell in the market and make sure you attend a show where you know that the buyers for the stores will be attending. Make sure to bring along samples, and also information on your product. Most importantly “What separates you from the pack! Everyone has an energy bar but is yours different? If not you must be willing to be the low offer.
- Find your large, medium, and small box store distributor; easiest way and the most productive why we have seen it work is for a foreign company coming to the US with a food/consumable good product is that have a three legged approach. This approach will also come with some challenges;
- Large distribution (BIG BOX STORES) will want exclusive access over their rival, large order size and the BIG issue they will ask for NET120 days and a discount on merchandise that is either stolen, destroyed, or returned. For a small company this might be something hard to deal with. For you the company you cannot compete with knowing that you wont get paid for at least 120 after the product is on the shelf and then possibly only 80% of that shipment. Oh and they can return product as well and make you pay for shipping. You will need a rep to handle these type of accounts or add in a travel budget to meet with them frequently.
- Medium distribution think (Grocery store) will want to charge you for shelf space up to $10,000 or more for a small space. This is also tricky, we would recommend an agent who would sell your product around the market. Email us for a list of a few agents and marketing companies who have great relationships. This market also has the problem of up to NET90 on sales, but less on the returns and refunds.
- Small distribution think your mom and pop convenience stores in the US. These stores know their customers EXTREMELY well. To the point they know most of their customers by name or at least by the product they sell. If you want to get into the US market we recommend this as a starting point. They are also willing to buy your product upfront to test it out or at least pay for shipping within the US, and then make larger product purchases.
- Have your master distributor (MD) work out the returns, labeling, and shipping within the United States for you. Too little a company will not have in their contract returns and labeling and just think it works only to find out that their distributor will not relabel for them. Make sure you are tracking your US product performance, it is easier to check an online system than calling your master distributor each day to check on stock. Work with your MD to have an online inventory system in place.
It might take a few trips to the United States to figure out the ins and outs of the US market but it can be easy if you set up the right players in the market. WestWind Group is ready to help our foreign clients with master distribution, re-labeling, inventory management, and introductions to a few trusted people we have in the US market that can help you get into the three legs of US product market.
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