My current project is working in the Hemp CBD smokable industry
We developed our own brand of CBD smokables called The Real Stuff. We decided to venture in this industry because the barrier of entry was higher, among many other reasons. Why is that important in business? Because a competitor cannot come with $100 or $1000 and compete directly with us. We own the factory in San Diego, we own the patents and continually invest in research and development. So, for us starting that was very important to own the intellectual property and to have a high barrier of entry when developing this innovative CBD product.
Think of how you can have a high barrier of entry in the industry where you want to start. This is just one example. What other products can you produce with high barriers of entry? Think of products with unique formulation, unique packaging, or products where you control the supply chain. Now let’s pick the right postal distribution channel for you.
Distribution Channels
What are the distribution channels that we have? I know what you’re thinking. I want the big one, right? I want the big truck. I want to sell truckloads. That’s great. If you sell to mass retailers through a category buyer, one buyer, you can get a truckload, two truckloads, or ten truckloads into stores, any type of store.
Here we are talking about products with a higher barrier of entry. I want to go over my secret sauce. I’m going to go over my formula to get a product into mass retail; your product. You can sell to mass retail and to convenience stores, stores such as Walgreens, Kroger, and CVS. What do you need to sell to all of these stores? I’m going to separate the channel into direct sales where you ship truckloads to the stores.
“Poor distribution is the number one cause of failure.”
Sell Directly to Stores
You should sell directly to stores, mostly big stores and convenience stores. Now let’s go into the numbers really quickly. One hundred thousand stores is much more than one hundred thousand people, by the way. There are one hundred thousand stores between California, Texas, Florida, and New York. This means you don’t need to be national to have your product in one hundred thousand stores. Just concentrate on these four states. And let’s say you’re doing marketing because you’re selling online. You use the same advertising but you’re double-dipping now because people also see your product online.
Know Your Consumer
This is why you need to know your avatar. And again, if you’re online marketers, you’re all over avatars, right? You know who your consumer is. The same thing happens by the way for wholesale. You need to know who your consumer is, who walks into a convenience store, mostly guys, male, 16 to 30 years of age, for example. You need to know your consumer. Is that a Whole Foods consumer? Is it a 7-Eleven consumer? You need to know from there.
“If you don’t know who your consumer is, you’re not using the right strategy.”
Master Distributors, Wholesalers & Brokers
Wholesalers or master distributors can buy $100,000 or $200,000 of your product. They sell to every type of distributor. First, distributors will go and open the accounts and help you open the accounts. Number two, you can use brokers or you can sell directly to mass retailers. Mass retailers have category buyers or the people in power. They have the power to put your product into 5000 stores, one person, depending on the chain. One person has this power. Those are category buyers.
“You can use wholesalers; wholesalers are also master distributors.”
In mass retail, you can call these buyers, make a connection, and sell directly to them. Where do I find these buyers? On LinkedIn, for example. I find them on LinkedIn. Remember where is your avatar? My avatar is on LinkedIn. That’s where I make my connections. I have groups for them. I have a group that you might want to join, Fast Moving Consumer Goods. A lot of beverage industry category buyers are members of my LinkedIn group.
I have another group for beverages. I have about 50,000 members in the beverage group on LinkedIn. I have a CBD group, also the second largest on LinkedIn. You get the drift on LinkedIn. This is how I connect with these mass retail category buyers.
You should join and start connecting with them as well. Brokers are people who have a relationship with these buyers. It can be a big company with 1000 brokers or a mom-and-pop shop that just happens to have a relationship with big accounts. Brokers get the first check, and they get paid when I get paid; they get paid when you get paid. Isn’t that great? My advice is to contact and use brokers.
“A qualified Broker can provide you with advice and assistance to ensure you’re properly protected.”
Closing
Select your perfect distribution channels, always thinking of your consumers. Also, you should join and start connecting with brokers. They are people who have a relationship with buyers.
“Every accomplishment starts with a decision to try.”