marketing, sales, distributionI am considering a start-up selling sports nutrition at gyms. I’m unsure whether I should be considering using a distributor to help me sell to gyms, who would then sell to customers.
Here are my pros and cons.
Pros:
Cons:
Are there more considerations to make? As I see it, it comes down to cost vs how much time and money I am willing to invest in sales.
Will distributors be more trusted sellers and therefore stand more of a chance getting their ‘foot in the door’ so to speak?
Thank you for your help
Are there more considerations to make?
Here are a few more:
Knowing what your customers need and want straight from the horse’s mouth, and getting their feedback to boot.
Cog in the machinery: if you don’t own the client relationship, what prevents the reseller from locating a cheaper supplier with an equivalent product?
Control over your own destiny: will the reseller actually do their work properly, or just sit around waiting for the phone to ring?
Exclusivity: resellers usually want some kind of exclusivity. Restrict it to a certain area and/or type of customer only, and make sure they lose it if they don’t meet performance expectations. Note that some resellers might have overlap here.
Time to market: ideally they own the market already and just need to reach out to their existing customers; by contrast you might need to reach out to clients one by one and then identify and convince the decision maker in each one.
Shorter / Easier sales: it’s simpler to throw in an extra product or service when you’ve an existing relationship.
In your case, I would guess the last two points above will be the most important - and you’re intuitively cognizant of it, since you’re technically wondering about the them in your question.
Do give a few thoughts on the other points as well: not being in control of your own clients can be a tough spot to be in at times, when 90% of your business depends on a distributor who tells you “tough luck we’re moving on”. (As a more general rule, strive to avoid having so big a client that your business would go belly up if you lost them. There is such a thing as too big a client.)
Will distributors be more trusted sellers and therefore stand more of a chance getting their ‘foot in the door’ so to speak?
FYI it’s rather poor sales practice to use the ‘foot in the door’ technique - victims remember. But you have the rest correct: they’ll be trusted already, leading to shorter/easier sales and greater penetration in a shorter amount of time.
As a last short note, it’s feasible to get the full list of all gyms in your target country, and they’re typically small to medium-sized businesses. Don’t overestimate the amount of effort needed to win them one by one. And whatever you do, be sure to actually reach out to a few of them, if only to locate who their own distributors are. You might find patterns, e.g. a few brands who you currently think are competitors but may turn out to be good partners with an established sales force.
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