What is a Retail broker? Retail brokers are salespeople, independent salespeople or sales companies that already have a relationship with buyers, either category buyers, merchandising managers or other type of buyers or owners of stores or accounts. In this case mass retail accounts. Mass retail accounts use category buyers. Category buyers are people who buy products per a category. You have the beverage buyer, you have the nutraceuticals buyer, you have the baby food and baby product buyer, etcetera. 

Each of these categories has their own buyer. Brokers usually specialize in categories so you don’t have one broker for all categories. The brokers also come in small companies and huge international companies. An independent broker is usually an ex-buyer. So there used to be a buyer for a chain and now they’re a broker for the same chain. They don’t work for the chain anymore. They’re independent. They will charge you at least 5% of paid sales once you get paid. 

The same is for big national companies, big national companies and there are a few in the US that are national and international. What they do is they have salespeople or brokers for every single category in every single chain nationwide. So, they can really place your product everywhere really fast. Now, can anybody go to these big national companies? Well, you can go to them but it is very difficult to get your product listed with them. They’re looking for Fortune 500 companies, that’s what they want. 

 

“Retail is selling things that don’t come back to customers who do”  

 

That’s the way they make their money. And yes, they do take a gamble once in a while in smaller companies. But smaller companies, I mean, 5 million, 10 million, 20 million is what I mean by a small company. Once you reach that level, you can go to these large broker companies. If you have not reached that level, you should go to smaller brokers that sell product to local chains. This way you can have a little bit more control. You can run local advertising and marketing to the consumer and you can prove to the broker and you can prove to the chain that you and your product will sell. Once you do this, then you can step up and get more territories until you get to the national brokers. Again, these brokers make 5% enough. Some of them make 10%, I’ve seen some make 15%. Now if you’re going to pay more than 5%, it’s because you’re receiving additional value not just to sell but something else. They’re providing merchandising.  

They’re taking your product to trade shows, they’re doing marketing to consumers, they’re putting you in inserts from the supermarket, they’re doing more things and this is why they charge more. Usually, they will not get you distributors so you have to be prepared for warehouse programs. Something that we didn’t mention before for warehouse programs is that warehouse programs can charge you per store and this is called a sliding fee. So, when you go to brokers, be prepared to pay a slotting fee. That’s the same for warehouse programs. Remember brokers put you into warehouse programs usually be prepared to pay anywhere from $$25 to $100 per store.  

 

“Retail is Detail”
 

That doesn’t sound like a lot of money but if you think about it, if you’re going to a chain that has 1000 stores and you’re paying $50 per store, that’s $50,000 that you have to pay upfront just to play the game. Plus, they will ask you for an advertising spend. They will ask you how much money will you advertise per year on your product or to get people to my store? So be prepared to have those conversations. We call that a retail package. We also call that a distributor package. If you want help with that, we can provide help with that. This is one of our services to help you create warehouse programs or warehouse sales packages and distributor packages. 

 

Closing 

A broker is a person who acts as a middleman between the buyers and the securities sellers. Brokers who work with institutional investors are referred to as institutional brokers, while those who serve the needs of individual investors are called retail brokers. Retail brokers normally facilitate equity and debt trades for their clients, including stocks and bonds. They might sell additional securities and financial products such as mutual funds, limited partnerships, options, and real estate investment trusts.  

They’re taking your product to trade shows, they’re doing marketing to consumers, they’re putting you in inserts from the supermarket, they’re doing more things and this is why they get a little extra. If you want help with your business, we can provide help with that. This is one of our services to help you create warehouse programs or warehouse sales packages and distributor packages, just give us a call. 

 

“Alone we can accomplish little things, together we can achieve bigger things” 

 

WholesaleMBA_Brokers 

Let’s get in touch! If you want to get all the hacks to get a successful business reach me at: mastermindgroup.us or jorgeolson.com