Getting Exclusive Distribution Rights

[amp0193]

I recently got exclusive U.S. distribution rights for the products of a European brand. Here's how I did it:

Step 1) Find a gap in the market. In my case, consumers were paying tons of shipping to order these from Europe. There was no U.S. source to buy from <--- Opportunity!

Step 2) Open a wholesale account with the company and make a minimum order.

Step 3) Market and sell the products as fast as you can.

Step 4) Call the company when you're almost sold out. Be enthusiastic and tell them your detailed plan to sell boatloads more, then ask for exclusive U.S. distribution, because "I don't want to spend the time building a distribution network, if a competitor can come in and undercut my business".

Step 5) Actually sell boatloads, so they extend the contract when it's up for renewal.


I'm working on step 5 now.

 

[amp0193]

So here's my 3-pronged strategy to sell lots of these things and keep the contract:

1. This product is a hot-selling accessory to the high-ticket products in my main business. 20% of my customers buy one. These accessories actually help sell more of the high-ticket products because they extend the accessibility of the product to a new customer base.

2. Make a list of every dealer in the country (maybe 200?) who might want them. Then sell to them! These products are a no-brainer. If you're a dealer, you'd have to be stupid not to buy them because of how much they help the high-ticket items sell.

3. Ecommerce direct to customer -

• Amazon search only returns 3 search results... my listings. Amazon listing is already #2 spot in google search for main keywords.
• eccomerce site (the brand is actually developing this now. No time or expense on my part... however, I have less control). Until live, I'm selling on my own website running google shopping and adwords.
• Creating US social media accounts for the brand and growing them to reach end users.

Sneaky side benefit: Those 200 dealers are the same that might want to stock my high-ticket items in the future (a tougher sell), and now my foot is in the door with them. Also, I get to post lots of pics of my high-ticket items on the company social media and Amazon to raise awareness of my main business!

Lots of synergy here with this set up, and I'm digging it.

 

[amp0193]

I know @MidwestLandlord has negotiated territory agreements with different brands as he's shared in his progress thread. Do you have any words of wisdom to share about how you got those contracts?


The fun thing about selling other people's products, is that you skip the hard stuff (R&D, product development, manufacturing) and get right to the fun stuff: selling!


Anyone else do any wholesaling of other companies' products?

 

[Private Witt]

Anyone else do any wholesaling of other companies' products?

I'm currently not, but plan on in the future, so thanks for the thread and info .

 

[amp0193]

I'm currently not, but plan on in the future, so thanks for the thread and info .

No prob!

I wouldn't recommend making wholesaling of others' products the bread and butter of your business, as you lack a lot of control, but it can be a way to get a lot of skus up and running quickly, while you slowly replace them with your own branded products.

My site right now is a mix of branded products and several different wholesaled brands.

 

[Private Witt]

No prob!

I wouldn't recommend making wholesaling of others' products the bread and butter of your business, as you lack a lot of control, but it can be a way to get a lot of skus up and running quickly, while you slowly replace them with your own branded products.

My site right now is a mix of branded products and several different wholesaled brands.

Thanks, the deeper I get with my current project, the more I'm learning the lack of control is a massive factor in the majority of my issues.

 

[AgainstAllOdds]

Great thread.

A note I want to make:

If you can't get U.S. exclusives, go for metropolitan rights. Chicago GDP = Country of Switzerland GDP. A city might seem small but can still be giant.

This won't work if you're distributing small products that are shipped across America.

 

[B. Cole]

Haha, best barrier to entry thread yet. What’s the IP status of the product in the US, anything proprietary to be had?

 

[amp0193]

Haha, best barrier to entry thread yet. What’s the IP status of the product in the US, anything proprietary to be had?

Proprietary is a strong word. IP doesn't really come into play. Long-term plan is for me to make my own brand of competing product.

The barrier on copying this product is in meeting the lots and lots of very important safety standards. The kind you want to make triply sure you have on lockdown before you start selling.

Hence, why I opted to source someone else's in the meantime.

And this manufacturer is the only company in the world making this product. I don't really have to worry about competitors for now.

Very niche product. Solves a very specific need.

 

[LittleJohn]

I know @MidwestLandlord has negotiated territory agreements with different brands as he's shared in his progress thread. Do you have any words of wisdom to share about how you got those contracts?


The fun thing about selling other people's products, is that you skip the hard stuff (R&D, product development, manufacturing) and get right to the fun stuff: selling!


Anyone else do any wholesaling of other companies' products?

I guess at this point you just look at margins and be sure to factor in advertising costs?