How to Prove your CPG product to Distributors
You’ve designed and perfected your product. You’re ready to get started in the world of consumer packaged goods (CPGs). Now you want to get your product to as many customers as possible, but how do you do that?
It’s time to find a distributor.
A CPG distributor acts as the middleman between you and retail stores. Instead of going to each store individually hoping to get your CPG stocked, working with a distributor means they do the hustling for you.
Distributors work with retailers to get your product into as many stores and restaurants as possible. The right distributor will not only boost your sales but help broaden your market.
Of course, teaming up with the right distributor means proving to them that your CPG is the one that they’ve been missing all along. And as a CPG distributor ourselves, we’re more than happy to share some industry secrets to help you do just that.
Not all CPG distributors are created equally
CPG distributors come in all shapes and sizes, so it’s important to find the right one for you.
Whether you want your product to be sold globally or in one specialized market, there’s a distributor for you.
First, make a list of requirements for your CPG. Think about the kind of business you want to run. Understand the current capabilities your business has. Then, consider the short-term and long-term goals you want to achieve and map them out in a comprehensive CPG business plan.
By taking into account the size, expertise, and values of a potential distribution partner, you’ll save yourself the headache of pitching to distributors that aren’t the right fit for your CPG. For example, if you’re a plant-based brand focused on sustainability, you can skip working with a distributor that mainly works with large-scale meat and dairy industries.
When you prepare and do your research, you’ll not only save yourself time, but you’ll be more likely to have your CPG succeed. After all, a CPG distributor who shares your values will see the potential in your CPG — and that’s the first step to proving its worth!
Why should a distributor be excited by your CPG?
Now that you know which distributors would be a good fit for your product, it’s time to convince them. After all, they’re missing out on sales by not stocking your CPG!
It’s important to get creative and stand out from the crowd. You want to catch their eye, but you also need the stats to back it up. Create a pitch that shows how your product aligns with the goals and market approach of your preferred distributor. You need to show them that you understand the market and why your product will sell.
Prove that there’s customer demand for your CPG with sales figures. If you don’t have sales figures from your own brand, then it’s time to do some market research and pull data from existing retailers and brands.
Show them that you’re serious about your CPG and that you have a strong vision for the brand. Be clear about your goals for the business and demonstrate your commitment to the company.
Who's going to buy your product?
But you’ll need to do more than demonstrate a demand in the market. Professional distributors will want to know where, when, why, and to who your product will sell.
Who is your target customer? What’s their lifestyle like? Where do they live? When would they need your CPG? Why would they choose you over another brand?
These are all essential reassurances when getting a distributor to buy into your business.
Get into the numbers
As with any business, a distributor needs to know about the costs that would be involved with stocking your product. They also want to know how much profit there is to be made — so you’ve gotta have the numbers to show them!
A distributor will want to know the price point of your CPG. How much will the customer pay? How much will they make from it? They need to know what your profit margin is, both per unit and in total. It helps if you can prove to them that your product will have a higher profit margin than similar products.
They’ll also want to know about inventory levels: how many units will they need to store in order to fulfill orders from retailers? How much will this cost them?
You might also want to share your ideas around marketing strategies. Think about different ways you could market your product, from in-store displays to pop-up stores. If you’re stuck for inspiration, check out our CPG marketing guide right here.
Keeping up with demand
So you’ve dazzled them with your product and shown them the customer demand for your CPG. Now, it’s time to prove that you’ll be a solid long-term investment for your distributor.
This is where you’ll reassure the distributor that you can keep up with demand as your business grows.
If they put your CPGs in dozens of stores, you need enough of the product to fulfill those orders! If your distributor expands your retail presence to hundreds of stores, how would you handle it?
Distributors simply won’t get involved with CPGs that have no scope to scale. Show them how your business would grow with added demand and show them the potential profit there is to be made!
What else do you have — and what does that mean for your distribution partner?
Do you have more SKUs and variants available? Are you in the process of developing or perfecting a new range? This is important because distributors care about administrative costs.
Selling one product from six different businesses will cost them far more in administrative costs than selling six products from one business. Wow your potential distributor with a clear vision of what’s to come.
Lastly, appeal to their values...
Some retailers have strict ethical standards — Whole Foods Market is a perfect example. To get stocked somewhere like Whole Foods your CPG production practices need to match up with the retailer’s ethics.
Your CPG distributor is the bridge between your brand the very best grocery store shelves. Show the distributor that you understand their business model, ethics, and values. Explain to them why your CPG business aligns with their own. Look at the portfolio of other brands they distribute and prove to them that you’re the missing piece.
Need help deciding on the right distributor?
We get it. With so many distributors operating in America, choosing the right one(s) to approach can be a daunting process. How do you know where to begin?
Let’s make it easy. Do you have a food or beverage product that’s good for the planet, good for people, and just makes good business sense? Then we should talk.
Buffalo Market is one of the leading distributors for purpose-driven food and beverage brands in the US and we’d love to hear from you. Get in touch with us today and before you know it, we might just have you stocked in high-revenue retailers right across California.