If you have a company that produces natural and organic products, chances are you’re very thoughtful about the ingredients and resources that go into what you create. You recognize the importance of quality, and you take pride in your product. While you’re establishing a strong sales and marketing program, you’ll want to give some consideration to which distribution channel(s) will work best for your niche. This includes not only your actual distributor but also your sales force and the retailers that house your product on their shelves. (Learn more about the key players in building a natural foods brand here).
Distributors are the ones who get your product to the retailers and stores like Whole Foods generally prefer to work with distributors over individual business owners. According to Bill Capsalis, President of Naturally Boulder, who we spoke with during our natural foods & products webinar, close to 90% of natural products in stores come from distributors, not directly from the product owners. There is no one distribution channel that is right for everyone, and it’s up to you to figure out which is the best for your brand. So what do you need to consider when choosing the best distribution channel for your product? Here are four distribution tips for natural products enrepreneurs:
Tip #1: Consider your goods:
The actual physical characteristics of your product should be a factor in choosing how it is distributed. Is it perishable? That might require a shorter channel that needs less time to get from manufacturer to retailer (and ideally, consumer). Is it a heavy product? Transportation and shipping costs will likely come into play. Know what will work best to get your product in front of your intended audience for a cost that won’t deplete your margins.
Tip #2: Think about your brand image:
Think about the work you have put into building your brand. Your marketing and promotional efforts will be wasted if your distribution channel isn’t suited to the brand you’ve created. A high-end, specialty product would lose it’s status if it was available at every big box and grocery store in the area. You want to ensure that your distribution channel is reaching your intended audience. Where you sell your product speaks volumes about your brand, and you don’t want to miss your target audience by being in the wrong stores.
Tip #3: Determine where you want to sell:
Where do you want your product to be available to consumers? If you plan to sell locally, you’ll want to choose someone who knows the local market and can help you get a foot in the door with the right local retailers. If your goal is to be a national household name, you’ll need to think bigger. Distribution companies represent your brand, and you’ll want to choose one that is selling it to the right audience.
Tip #4: Look to your competitors:
Check out your competitors. Where are they selling and what distribution channels are they using? You might decide to go a similar route and use the same channels, or you might want to avoid them altogether and go after a different audience. If you don’t want to share shelf space with a competing product, you might enter into an exclusive agreement with a distributor. This could be risky, though, if you are not satisfied with their service after you sign this kind of deal.
These are just a few factors to consider when choosing the right distribution channel for your natural goods. It’s important to remember that you have options. Do your homework before making your final decision. Get referrals from retailers, brokers, and sales agents that are familiar with your product. Go to trade shows and talk to a variety of distributors to see what they can do for you. Check out UNFI and KeHe, two of the top distributors of natural products in the United States, to see what kind of services are available. You can also check out our webinar with a 20-year veteran of the natural foods industry, Bill Capsalis, and learn more about the people and channels who can help you get your products in the hands of your target audience. Watch it here.
Have any tips you would like to share with your fellow entrepreneurs? Feel free to drop us a comment in the box below!