Distributors And Reps Can Change Your Life

0:02 hi guys welcome back
0:04 today I just have Keith
0:07 Pawan left us I guess to go down
0:10 he failed he actually had some
0:12 really important work so we got to give
0:13 him a lot of credit for that
0:15 making priorities work
0:16 but it might actually be a good time
0:18 this topic might be good it’ll be fine
0:20 yeah I think it’ll be good
0:23 not that we don’t love you Pawan
0:26 I really wanted to talk
0:28 about Distributors and Reps
0:31 I want to say in the
0:33 last three weeks I have been getting
0:35 calls from yarn startups
0:38 they’re
0:39 I think two of them were doing some
0:41 online Amazon stuff but they just
0:43 weren’t getting a lot of traction so
0:44 they were talking about how to get
0:45 retailers
0:47 one is just in a small boutique and
0:50 they’re like how do I do this how do I
0:52 get you know some help and I realize
0:54 maybe because I don’t I don’t use it as
0:57 often when I’m doing licensing deals
0:58 that I think about Distributors other
1:00 than from my market research but it was
1:02 like well you need to get some wraps or
1:05 you need to get some Distributors so
1:07 that you can get spread and you get this
1:09 awesome sales team so
1:12 are you familiar with Distributors
1:14 and Reps kind of or yeah it’s not
1:16 something we use every day but you know
1:18 we have our own kind of strategies right
1:20 in and
1:22 it’ll be interesting to see where you
1:23 take this but I’ll dive in a little
1:25 bit of how it might that translate into
1:27 the digital okay a little bit later yeah
1:28 because I just as I say that I’m
1:30 wondering like how
1:32 perfect compliments
1:33 I’ll give you I guess we’ll start with
1:35 definition and I’ll explain how my
1:37 clients use it so
1:38 a distributor is a company that has
1:41 lots of products they have a built up
1:45 relationships with a lot of retailers
1:46 they will purchase order your products
1:49 they’ll mark them up and sell them to
1:50 the retailer so you lose a little bit
1:53 because your margins between the
1:55 distributor getting his piece but he’s
1:58 usually pretty solid on getting you some
2:00 really really great sales
2:03 it’s nice because you get money
2:05 you’re selling and some companies
2:08 just keep making products and using
2:09 Distributors and they just become a
2:11 manufacturer kind of also a guy the
2:14 other is a rep team
2:16 I have a client I think I probably
2:18 shared the story he had made labels to
2:21 put on gas to make sure his wife put in
2:23 the right gas and he’s in like 250
2:26 Menards stores and he did it with a rep
2:29 a rep takes a percentage somewhere
2:31 usually between five and twenty I think
2:33 in his case he said I think he pays
2:35 somewhere around 12 percent
2:37 same thing the Reps have a lot of
2:39 merchandise they’ll have their regular
2:42 category that they work in and then they
2:45 go to their retailers and they present
2:47 rI like reps a lot for the middle
2:50 tier what I call middle tier everybody
2:52 thinks they want in Target or Walmart
2:53 but there’s this whole Ma and Pa
2:56 boutiques that kind of thing where
2:58 there’s thousands of them and you can’t
3:00 go door to door so you have a rep who’s
3:02 already set up usually it’s done by
3:04 regions and you guys you get this whole
3:06 sales force you get cover every region
3:08 you got a sales force pay only when they
3:11 sell so it’s a really cool way to go and
3:14 so I really want people to understand
3:16 that and find that as a resource and so
3:18 just to touch on like where to find them
3:21 you obviously we can Google because
3:22 we can Google everything but you guys
3:24 there are like the Boston marks
3:27 New York has a Mart Miami has a
3:30 March it’s where you go to buy wholesale
3:32 products for your stores so your small
3:35 store buyers are going to show up there
3:37 and most of them have show rooms that
3:39 you can find so you can research those
3:43 you know those facilities and that
3:44 will also help you find reps and so
3:46 just look for reps to carry your
3:48 type product you have to pitch to them
3:51 just like you’re pitching to a retailer
3:53 you know why your product’s better
3:54 why it’s good why you want to carry it
3:56 sometimes you give them incentives so
3:57 they say look if you get me in the first
3:59 90 days I’ll give you the extra three
4:00 percent or something so but I think
4:03 it’s real important you guys that we
4:05 know that resource because it’s huge so
4:07 how do you use it so it’s interesting
4:09 that you mentioned that because the
4:11 there’s sort of an analog in the digital
4:14 world but a lot of our clients do use
4:16 Distributors right there so we have a
4:18 lot of clients that are selling Direct
4:20 online but we are always encouraging
4:24 them to look for other you know revenue
4:26 streams and so many of them if they’re
4:28 product based they will find you know
4:31 wholesale and or distributor type
4:33 relationships that they can use to
4:36 increase their volumes nice obviously
4:38 margins may be slightly Slimmer there
4:40 but when they increase their volumes and
4:42 they’re selling more whether it be
4:44 online and Amazon and you know
4:46 Distributors well now their cost of
4:48 manufacturing comes down exactly also it
4:51 all it helps because then your
4:53 margins are even more over here on the
4:56 direct side so it’s huge it’s super
4:58 beneficial
4:59 the other interesting
5:01 because you were
5:02 sort of talking about like you’re
5:03 building your own sales team out right
5:04 you’re pitching to the Reps and you know
5:06 I think we’ve worked with reps in the
5:08 past and different times
5:10 and you’re right you have to pitch
5:11 them you have to convince them why they
5:12 should take your product versus another
5:13 in the door because they’ve got all
5:15 these relationships so why yours
5:19 the influencer world in digital
5:22 marketing is a little bit the same way
5:25 more from a marketing standpoint and you
5:28 don’t really think about it but really
5:29 what you’re usually trying to do is find
5:31 a relationship where these
5:33 influencers or these reps oh this makes
5:36 good sense huge relationship with all
5:38 these different people that could be
5:39 good customers
5:41 and they’ve built that
5:43 relationship already now and so what
5:44 you’re doing is you’re offering them a
5:46 percentage based on sales right and so
5:48 that’s really more into the affiliate
5:50 type marketing that we’re talking about
5:52 but that’s how a lot of the influencer
5:54 relationships work right they build out
5:55 an affiliate program an affiliate link
5:57 and so now they’re not paying this
5:59 person on payroll but they pay them
6:00 every time they make a sale exactly so
6:02 and see I love that I’m doing my
6:06 affiliate program for the first time
6:09 with one of my clients and I’m really
6:10 excited about it
6:12 I haven’t done it but I’m trusting
6:14 you that I’m doing the right thing but I
6:17 think it’s a perfect fit for what he’s
6:18 doing and it makes him still the
6:22 owner of the product but it gives him
6:24 others incentives to sell the product
6:26 and it’s a really good fit for what
6:28 he has so I’m really psyched about that
6:31 I really just I know that this topic
6:34 is so important and it may not be
6:36 lengthy there’s not a whole it’s not
6:38 complicated so it’s a very simple system
6:40 but it’s so powerful when you’re one guy
6:43 by yourself yeah that’s the part
6:45 that like can’t stress enough right and
6:47 so no matter which part of this
6:48 we’re talking about there are so many
6:51 times as an entrepreneur as you know a
6:54 product developer or whoever you are
6:57 in the process where you have to step
6:59 back and realize I only have so much
7:01 time in a day right I want to get this
7:03 product to Market I only have so much
7:04 time in a day and early on you know
7:07 you’re thinking well I can’t hire
7:09 anybody right because I just have to do
7:11 it and all to get all the founder sales
7:13 we like to call it right I’m stuck in
7:15 that founder sales mentality
7:17 well if I learn how to give away a
7:20 percentage bring a rep on board
7:22 well I can do that multiple
7:25 times right because now I’ve built you
7:26 know reps in different areas of the
7:28 country right everybody’s got their
7:29 region and everybody’s got their
7:31 agreement but they have those
7:33 relationships and now you’ve just built
7:36 a sales team without having to put
7:38 anyone on payroll exactly and people
7:40 don’t realize that I think they get
7:43 carried away in fact I just had a call
7:44 from someone who realized that they’re
7:48 ready because I tend to take 10 percent on what
7:51 I bring you in and they were like
7:53 we’re ready now to give up part of the
7:55 company and I’m like you’re only giving
7:57 me part of what I bring you you’re not
7:58 giving up your company
8:00 and so
8:03 it was shocking to me that I don’t think
8:05 people grasped that because when you
8:07 bring somebody on payroll and you’re
8:09 paying them what I don’t care if it’s
8:10 even 48 000 which is still cheap
8:12 cheap for a sales person you’re
8:15 gonna have to give them a commission
8:16 anyway absolutely I mean so now you got
8:18 this huge base pay that you have to
8:20 worry about and I’m telling you
8:22 and if you can’t if you’re nervous
8:25 because reps do tend to do a little more
8:28 10 products here 10 products 10 product
8:30 there but go after your Distributors
8:32 yeah get your purchase orders get some
8:34 inventory sold get somebody out there
8:36 pushing it and then leverage that now
8:38 they’re definitely not exclusive right
8:40 so exactly find the Reps find the
8:43 Distributors and then even later on down
8:45 the road if you bring on your own
8:46 internal sales team well now they are
8:49 basically your core team to be building
8:52 out a bigger rep base as well you can
8:54 use them in Tandem and when you’re doing
8:55 your own marketing if you’re selling
8:57 online again it’s not like you’re like
8:59 abandoning any of these other systems
9:00 you’re just adding more in Phase because
9:02 what people find is you know comparing a
9:05 rep versus I’m just going to sell it
9:07 digitally oh I don’t have to give up a
9:09 percentage when I sell it online that is
9:11 fantastic we love that but
9:14 you also have to pay for the marketing
9:17 and pay for the ads or whatever it is
9:19 right you have right because then you
9:21 needed the digital side to get that out
9:23 in front of people as opposed to the rep
9:24 side taking it out in front of people
9:27 yeah and I’ll bet you sometimes it’s
9:28 cheaper for a rep for you to pay a
9:30 percentage to a rep than it is to be
9:31 online
9:32 I think the reason that is is because
9:34 they’ve got those relationships that’s
9:37 what I was going to say is and if you
9:38 get a good rep if you don’t
9:40 cancel you guys there’s always a
9:41 termination get rid of that rep and get another one
9:44 like you said that’s what I love about it is
9:45 there’s probably going to be 10 or 20 in
9:48 your category and there’s probably going
9:50 to be in region
9:52 I have found
9:53 I think probably even when I started
9:55 learning about reps I found it because I
9:57 would research companies that I really
9:58 liked and then it would say where to buy
10:00 us and then you would look and you’d see
10:01 the rep team and you’re like go to that
10:03 how many times have you seen like you go
10:05 directly to the manufacturer because
10:06 this is a great brand and they’re like
10:08 where you can find our products right
10:10 and that gives away who you want to play
10:11 with like right there is your that’s the
10:13 guy you’re looking for and so If I could give
10:18 one tip to
10:20 a start up it would be find that
10:24 sales team that’s either a rep or a
10:26 distributor right out the gate right out
10:28 the gate and I would like you to have
10:30 talked to that distributor ahead of time
10:33 before you developed your product and
10:35 finished it you guys because they’ll
10:36 tell you and then come back to them when
10:39 you’re done and use them and sell sell sell
10:41 sell sell so even if you’re
10:43 taking like you said a discounted rate
10:44 the trade-off on what you’re getting for
10:47 your quantity break for manufacturing
10:49 will pay for it will always work
10:51 absolutely what’s your tip my tip would
10:53 be build those relationships early and
10:56 then maintain them for the life of what
10:58 you’re doing because you never know when
11:00 you know that relationship maybe you
11:03 talk to that distributor before you even
11:04 had a product hopefully right and
11:07 so then a year later when your product’s
11:09 ready to go and you’re bringing it to
11:10 them you’ve already built that
11:12 relationship it’s so much easier and
11:14 then 10 years from now when you’re on
11:15 your 20th product and you know you’re
11:17 you still gotten this incredible
11:19 relationship where you’ve got more
11:21 products to feed to them it’s win for
11:23 them it’s a win for you exactly I love
11:25 it I love it thanks you guys I really appreciate you
11:28 tuning in and we’ll see you next
11:29 week