Navigating the world of distribution channels to sell your products can be a complex journey. If you've ever found yourself wondering how to find distributors that align with your brand's vision and values, you're not alone.
This in-depth guide explores the art and science of finding the perfect distribution partners. With expert tips, industry insights, and practical advice, you'll learn some of the best methods for how to find distributors that are a great fit for your product or industry. Let's get started.
👉 What you’ll find:
- How to find "good" wholesale distributors
- What are the different types of distributors?
- How do distributors make money?
- How to find distributors to sell your products
- How to grow your distributor network
The power of distributor networks today
In recent years, distributor networks have undergone a significant transformation, driven largely by technological advancements, changing consumer behaviors, and global market dynamics. These changes have led to more customer- and environment-centered solutions.
Today, you'll notice a shift towards more collaborative and transparent relationships, with a strong emphasis on digital integration and data sharing. The rise of e-commerce and direct-to-consumer (DTC) models have also challenged traditional distribution methods, prompting many wholesale distributors to add value for you and your customers through services like advanced logistics, market insights, and marketing support.
Sustainability and ethical practices are also becoming central to these types of partnerships, as both consumers and businesses rightly prioritize environmental and social responsibility in their distribution channels.
The distributor of the future is expected to be data-driven, agile, and closely aligned with your brand values and consumer expectations. Let's get ready to meet them.
How to find good distributors
What makes a "good" distributor will depend on your business and its needs. We'll go over the steps to take in much more detail below. However, a good distributor will function as a seamless extension of your business and will be characterized by their deep understanding of your market landscape and customer needs.
They'll also be reliable and efficient. Good distributors not only possess a robust logistical infrastructure to ensure timely and accurate deliveries but also can offer invaluable feedback and proactive solutions to make your distribution channels more efficient.
Finally, the best distributor partners for your products are committed to mutual growth, consistently striving for excellence in service, adapting to changing market dynamics, and aligning their operations with the values and objectives of your brand.
What are the different types of distributors?
Distributors typically bridge the gap between your business and customers, enabling a seamless flow of products through the supply chain. Depending on their business model, manufacturers may use direct, indirect, or hybrid distribution channels with or without the help of distributors to get their products to market.
Direct distribution channels involve selling products directly to consumers without the involvement of intermediaries. You've likely heard of it referred to as a Direct to Consumer, or DTC, model. On its own, it cuts out distributors, resellers, and other partners from the sales process. Common examples include:
- Online websites or e-commerce platforms where companies sell products straight to the end user
- Factory outlet stores where brands sell their products directly to customers, often at discounted rates
- Direct sales teams that market and sell products directly to customers
With indirect distribution models, manufacturers use partners to better reach their end consumers. These distribution partners can include:
- Wholesale distributors: These partners typically purchase products in bulk directly from manufacturers and then resell them to retailers or businesses. Due to their volume-based operation, they usually offer products at a reduced rate to their buyers.
- Value-added distributors (VADs): These distributors offer additional services and support to both the manufacturer and customer. They might provide technical support, product training, installation services, or even bundled products and solutions. By doing so, they ensure the customer receives not just a product, but a comprehensive solution that meets their needs.
- Retail distributors: Serving as a link between manufacturers and retailers, these distributors manage intricate supply chains, ensuring that retail locations have a consistent stock for their clients.
- Specialty distributors: Operating within a specific product category or industry niche, these distributors provide expert knowledge and specialized solutions for their partners.
Finally, hybrid distribution combines elements of both direct and indirect distribution models. Companies might sell products directly through their own retail or online stores while also using third-party retailers or specialty distributors to broaden their reach. Most companies use a hybrid approach to reach their customers.
🔎 Learn more: The world of partnerships is complex and constantly changing. Learn more about all the different types of partners in our full guide!
How do distributors make money?
As intermediaries between manufacturers and customers, distributor revenue models can look many different ways depending on your industry. Most often, though, distributors purchase products from manufacturers at a wholesale price that is lower than the retail price. They then sell these products to retailers, businesses, or customers at a higher retail price, pocketing the difference as profit.
A distributor's profit margin is calculated as the percentage difference between the wholesale cost and the retail selling price. This margin covers the distributor's operational expenses, overhead costs, and generates a profit.
Beyond the core buying and selling of products, distributors are increasingly providing value-added services that also contribute to their revenue. They can:
- Offer customization options, such as branding, packaging, or labeling, tailored to the needs of their customers
- Manage the storage, inventory management, and efficient distribution of products for manufacturers, ensuring timely deliveries to customers
- Provide technical expertise, implementation support, troubleshooting assistance, and training to customers using the products they distribute
- Offer warranties, repairs, and replacements for products, enhancing customer satisfaction and loyalty
- Provide manufacturers with valuable market insights, helping them refine their product offerings and strategies over time
How could this look? A distributor may purchase business servers from a manufacturer at a wholesale cost of $10,000 per unit. They then sell the same units to businesses at a retail price of $15,000 per unit. The distributor's profit margin per unit would be $5,000.
But, to enhance their offerings, the distributor may also offer technical training to their customers' IT teams on how to operate and maintain the servers effectively. They charge an additional fee for this training service, contributing additional revenue to their bottom line.
What's a typical distributor discount?
A distributor discount refers to how much lower their wholesale price is than the manufacturer's suggested retail price (MSRP). The typical distributor discount can vary widely based on factors such as industry, product type, competition, and distributor relationship.
However, wholesale distributor discounts are usually around 20% to 40% off the MSRP. These discounts can be negotiated and may change based on volume, terms of the partnership, and other factors.
How to find distributors to sell your products
Now that you have a better understanding of the benefits of working with distributors, as well as common revenue models, it's time to grow your own network of distributors!
Together, we grow faster. Follow these tips to get started, and check out the additional resources we link to throughout that offer in-depth looks at different stages of distribution recruitment. Looking for help with other types of partners? Explore more in our full guide.
🔎 Discover more: From first search to final handshake, learn how to find channel partners that are a perfect match for your company in our comprehensive guide.
1. Define your ideal distributor partner
Compatibility is crucial in any relationship, and it's the cornerstone of distributor partnerships. To ensure a great match, craft a crystal-clear image of your ideal distributor. As we discussed, a good distributor is one that's attuned to your business objectives and customer needs.
Consider these key factors as you build your perfect partner profile:
- Market reach
- Industry experience
- Technical expertise
- Customer service
- Alignment with brand values
- Distribution capabilities
- Growth potential
- Financial stability
- Communication and transparency
You can also set the stage for success through well-defined expectations. Establish key performance indicators (KPIs) at the start that offer a tangible framework for measuring progress.
2. Attend industry events
How to find distributors? According to PartnerPath research, industry-specific events, trade shows, and conferences are some of the top places that partners are looking for manufacturers like you! These events are an invaluable way to identify and connect with potential distributors.
Make the best use of your time at these events by following these tips beforehand:
- Do pre-event research: Prior to the event, acquire a list of attendees, exhibitors, or participants. Screen this list to pinpoint companies that align with your distribution needs. By doing this, you'll have a better idea of whom to approach during your limited time there.
- Set up an engaging booth display: If you're exhibiting or sponsoring the event, your booth is your first point of contact. Ensure it visually communicates your brand and products effectively. Interactive displays, live demonstrations, or free samples can attract more foot traffic and spark conversations.
- Make a plan to network: Don’t confine yourself to your booth. Walk around, attend panels, and participate in networking sessions. It's during these interactions that you can identify potential leads, understand market trends, and establish rapport with industry peers.
- Create your elevator pitch: Be prepared with a concise yet compelling pitch about your product or service. You never know when you'll get a short window of opportunity to sell your vision to a potential distributor.
- Set up meetings ahead of time: If you’ve identified potential distributors before the event, reach out to them to schedule one-on-one meetings! Having dedicated time to discuss a potential partnership can be more effective than a quick chat at a booth.
- Leverage event apps: Many industry events now have dedicated apps that facilitate networking. These apps often have messaging features, attendee lists, and schedules. Use them to your advantage to arrange meet-ups and keep track of important sessions.
During these events, always collect business cards or contact information from everyone you meet. After the event, sort through these contacts and send personalized follow-up emails.
Express gratitude for their time, remind them of your conversation, and suggest potential next steps. Above all else, be genuine. Remember that distributors are looking for reliable business partners, too. Be genuine in your interactions, show passion for your product, and be open to feedback.
By being proactive, prepared, and genuine in your interactions, industry events can be one of the best ways to find potential distributors.
3. Leverage word of mouth recommendations
Word of mouth recommendations can be the most authentic and trustworthy source of information when you're trying to find new distributors. Ask for recommendations from co-workers, former colleagues, existing clients, your current suppliers and vendors, and industry acquaintances. They might have collaborated with or know of distributors who are a perfect fit for your needs.
If you're a member of any industry associations, groups, or clubs, also use these platforms to seek recommendations. Join industry-specific groups online or in person, participate in discussions, and ask for distributor recommendations.
Whenever you receive a recommendation, jot it down! Include notes about who provided the recommendation, any specific pros or cons mentioned, and contact details. This organized approach ensures you don't miss out on potential leads and can easily review and prioritize them later.
Finally, while word of mouth is powerful, always conduct your own research and due diligence on any recommended distributor. Check their track record, financial stability, and reputation in the market before making any decisions.
4. Use sourcing agencies and tools
Sometimes, it's easier to rely on experts who specialize in bridging the gap between manufacturers and distributors. A channel recruitment agency, like Partner Optimizer, can help you find distributors. These agencies often have years of experience and possess intricate knowledge of the distribution landscape. They're familiar with market trends, emerging players, and the largest distributors in your industry.
Many agencies also use sophisticated algorithms and industry insights to match your specific needs to the most suitable distributors. They may also be able to conduct a thorough vetting process, checking financial stability, track record, market reputation, and compatibility with your business.
Instead of sifting through countless potential partners, you're presented with a curated list of matches. This can save you significant time and resources!
5. Look on online directories and platforms
Now, we all have unparalleled access to vast amounts of information online, making the search for distributors more convenient and efficient than ever. Online directories and platforms house thousands of distributor profiles, spanning various industries and regions. Look for those that serve your industry or niche.
Most of these platforms allow users to leave reviews and ratings for distributors. Such firsthand experiences can provide invaluable insights into the distributor's reliability and performance. Many platforms also allow you to refine your search based on specific criteria – geographical region, industry specialization, years in business, and more, so you can find partners that align closely with your needs.
While many directories offer free access, consider investing in premium or subscription models if you're building a large network rapidly. These often provide enhanced features, access to top-tier distributors, and additional market data.
6. Tap into the power of social media
Social media is one of the top ways vendors look for new partners online, according to PartnerPath research. For most businesses, LinkedIn is the best platform for distributor-related outreach. Follow these tips to make the best use of your search:
- Optimize your profile: Before reaching out, ensure your own LinkedIn profile is polished and professional, as well as your company's. Highlight your company’s achievements, products or services, and any testimonials or endorsements.
- Share valuable content: Regularly post insightful articles, case studies, or news about your industry. This positions you as a thought leader and can attract potential distributors to your profile.
- Use advanced search options: Add industry-specific keywords, locations, and job titles to narrow down your search.
- Join industry-specific groups: There are numerous LinkedIn groups dedicated to distribution in various sectors. Participate in discussions, share valuable insights, and establish yourself as an industry authority.
- Personalize your connection requests: When connecting with potential distributors, avoid generic messages. Personalize your request by mentioning shared interests, mutual connections, or reasons why you want to connect.
- Engage with their content: Once connected, start liking, sharing, and commenting on their posts. After establishing some level of engagement, initiate a direct conversation. Express your interest, provide a brief introduction of what you're looking for, and propose a more formal phone call or meeting.
- Leverage LinkedIn ads: If you have a budget for outreach, consider using LinkedIn's advertising options to target specific demographics to amplify your reach.
With LinkedIn, you can tap into a vast network of potential distributors and build connections that could evolve into incredible business partnerships.
7. Craft compelling distributor incentives
An effective incentive program can be a game-changer when trying to attract the best distributors. By offering value beyond just your product or service, you can distinguish yourself from competitors and foster long-term loyalty.
Distributor incentives should include monetary and non-monetary incentives. Consider these ideas:
- Volume or performance-based discounts
- Exclusive access to new products, support, or events
- Performance-driven commissions
- Achievement bonuses set up for key milestones
- Specialized training opportunities
- Marketing support, in the form of co-marketing or market development funds
- Exclusive territories or regions
- Flexible payment terms
- Loyalty programs with additional perks
Regularly evaluate the effectiveness of your incentive programs. Gather feedback from distributors, analyze sales data, and be ready to adapt the program based on results and evolving market conditions.
A robust and thoughtful incentive program demonstrates that you view distributors as valued partners. By aligning their success with yours, you create a foundation for a prosperous and lasting partnership.
🔎 Discover more: We cover 20 of the best channel incentives you can use to better recruit and engage potential partners.
8. Build a partner-centric recruitment process
A streamlined and welcoming partnering process can be the deciding factor in attracting top-tier distributors. A distributor's initial experience with your brand often sets the tone for the entire partnership.
Begin by enhancing your online presence. Many partners want to learn about you before they ever fill out a form. Optimize your website with dedicated sections on your distributor program that details benefits, expectations, and success stories.
Use high-quality graphics, video testimonials, and FAQs to offer potential partners a vivid snapshot of the advantages of collaborating with your company. Finally, don't forget to include clear and accessible contact methods, like contact forms, live chats, or direct email links.
As you begin to have conversations with potential distributors, be upfront about all aspects of the collaboration, from terms and conditions to potential challenges. When possible, establish channels for clear and consistent communication, perhaps through dedicated account managers or a partner portal.
By making it easy for distributors to learn more about your business, you can create a partnering environment that fosters mutual respect and lays the groundwork for lasting, productive relationships.
✅ Level up: Download our free distributor agreement template today to get up and running with potential partners with ease!
9. Evaluate your new potential distributors
Before entering into any partnership, assess potential distributors using metrics that matter to your business. This ensures that the distributor not only has the capacity and capability to sell your products but also aligns with your brand values and long-term objectives.
Here are some key metrics to consider:
- Sales volume: Review their historical sales data, focusing on numbers relevant to your industry or product type
- Customer retention rates: A high retention rate typically indicates good customer service and effective sales strategies, both critical for long-term success
- Market share: Determine their position in the market relative to competitors, as a dominant position can suggest strong market influence and efficient operations
- Product fit: Analyze their current product portfolio to see if your products complement or compete with existing offerings
- Operational efficiency: Metrics like order-to-delivery time, error rates in orders, and inventory management effectiveness can reveal their operational capabilities
- Financial stability: Review financial statements or credit ratings to assess their fiscal health and ensure they can withstand market fluctuations
- Market knowledge: Assess their understanding of your markets, including customer preferences, regulatory nuances, and cultural intricacies
- Tech-savviness: Gauge their proficiency with modern sales tools, PRM and CRM systems, and digital marketing strategies
While metrics and KPIs provide valuable insights, qualitative factors like cultural fit, shared values, and vision for the future can also play a big role. Balancing both during your review will lead to a more holistic understanding of your partnership potential.
10. Cultivate reciprocal partnerships
Distributor relationships, when viewed as mere transactional arrangements, can be short-lived and limited in their potential. You'll be hitting the streets again soon to find more distributors!
Approach each distributor relationship with a future-oriented mindset, one that prioritizes shared growth and customer value. Together, companies can co-create a roadmap that ensures sustained progress and innovation in the years ahead.
Moreover, reciprocity goes beyond just an exchange of products or services—it encompasses a continuous flow of insights, support, and value. By establishing an environment of open communication and trust, businesses can share knowledge, forecasts, and innovative ideas, all aimed at navigating future challenges.
We grow faster, together. By building an engaged, partner-centric ecosystem, you'll have distributors approach you to join!
Grow your distributor network with Impartner
From defining your ideal distributor to shaking hands at events, finding new distributors can enhance your market reach but also accelerate your business success. The key to any thriving distributor relationship lies in collaboration, communication, and a shared commitment to excellence.
Make it all happen with Impartner, your end-to-end partner relationship management solution. Each day millions of partners in nearly every industry across the globe access Impartner. Why? Because the partner experience matters and leading channel organizations agree.
Impartner is the fastest-growing, most award-winning channel management solution provider on the market. Our partner relationship management (PRM) and through channel marketing automation (TCMA) solutions help companies accelerate revenue and profitability through their indirect sales channels at every partner lifecycle touchpoint.
From partner training and certifications to communications, business planning, and performance tracking, Impartner handles it all and more with best practices and automation built-in.
Need to grow your distributor network? We’re ready when you are.