How to market a product to distributors

Innovator7Innovator7 Posts: 9subscriber
edited March 2007 in Marketing
While being pretty good at developing new products, I`m not familiar with selling to distributors.  Recently I invented by necessity the ultimate solution to my need for easy storage and access to surface-mount devices (SMD), I haven`t made headway in contacting buyers of major electronic component distributors such as Mouser, MCM, Digikey of whom I`m a customer.  I have quickly set up a web site to sell to end customers but the success of my new business depends on selling thru those distributors, who currently carry inferior products of similar type that I wouldn`t buy due to poor human factors.So my question is:  how can I make contact with the distributors` buyer?  I have sample kits ready to send to them for their scrutiny but I don`t have names to send to.

Comments

  • jamnjimjamnjim Posts: 0subscriber
    Hello Innovator7,
    I`m brand new to this forum and website but I`m looking for similar answers to the question you posted.  My small startup company invented, manufactures and markets a motorcycle related product called the the Easy Wheeler. www.easywheeler.com</A>   Like you, we have a web site and have sold some units to individuals since officially introducing the product in January of this year.  We have received a number of great reviews from national motorcycle magazines, internet sites, etc. and we are getting great exposure that way.  Like you, I can see that partnerships with dealerships/distributors are going to play an integral part in our marketing strategy.  Our problem is this: since my brother and I invested our own money to start the business, we cannot afford to purchase large quantities of the product components from our suppliers (yet).  As a result, our final cost per unit to produce the product is very high, leaving little margin to share with distributors.  The key here is to slowly build up the sales volume and the orders to our suppliers to the point that their costs to us go down, allowing us to pass those savings on to the distributors and dealers. This takes time and I`m always willing to listen to others for information I may not be aware of.  Regarding your original question, I would suggest you start by finding out who the principle players are at the distribution companies you mentioned. You can usually do this through initial email inquiries or direct phone communications. You don`t have to tell them your product is superior to what they have in their current product lines, but you could say something like "my company has developed and manufactures a product that we feel would compliment your current product line".  Start there and see where it goes. Let them know that you would like to develop a mutually beneficial business relationship with them.   Best of luck to you in expanding your business!
  • Innovator7Innovator7 Posts: 9subscriber
    Hi jamnjim,You got a nice web page design, congrats.  My shop is near an Harley-Davidson shop that has high traffic and parties gathering bikers.  Email me if you want to get your product into that popular store.Your gadget is not in my kind of pocketbook, for an accessory, but those biker got mucho dineros, apparently.  I`d buy a small electric scooter for that amount! , maybe I will, to commute the short 3 miles to my lab.I`m trying out Adword but need to get to major distributors one way or another.  My email campaign resulted in many lookers from those distributors but no contact yet.  Perhaps they take their time.  Meanwhile I`ll launch a direct email campaign to engineers and technicians, my ultimate buyers, and PR to trades magazines
  • jamnjimjamnjim Posts: 0subscriber
    Hello Innovator7,
    A three mile trip to your lab?  What I wouldn`t give to have that short of a commute. You may want to think about inventing a solar powered bike. That`s what the world needs right now to free ourselves from the need for fossil fuels and global warming.  I bet you`re already thinking about it!
    Email today is a tricky business if you send them to people that don`t know you. With advances made in spamming software over the last couple years, I would think that a majority of your messages are instantly rejected, and the rest that get through probably have less than a 50% chance of being read. Still, if the subject matter get`s the reader`s attention, you have a chance that they may reply.  If you have a great product and you really believe in it, sooner or later others will too.  From an inventor`s perspective, it would be much easier if we could simply apply ourselves to what we do best.... create, prototype, test etc. Instead, we find ourselves writing patents, filing for incorporation, writing RFQs, researching prospective vendors to secure materials and filling out mounds of paperwork for other financial necessities. It sounds like you`ve been doing this for a while, so that means you haven`t given up, which is great! Just talking to people who are as persistent as I am keeps me going.   My motto is "Never give up, or you die".    Best Regards, jamnjim
  • JeannieJeannie Posts: 8subscriber
    I`m not familiar with selling to distributors.   I have quickly set up a web site to sell to end customers but the success of my new business depends on selling thru those distributors.
    So my question is:  how can I make contact with the distributors` buyer?  I have sample kits ready to send to them for their scrutiny but I don`t have names to send to.
    Hi Innovator7,
    Good question! I am in the same position as you are. I look forward to seeing what others suggest.
    Jeannie
  • beglobalbeglobal Posts: 0subscriber
    I think it will be very useful for all of us.I hope this information help us to improve.Ivancin 
  • InactiveMemberInactiveMember Posts: 12subscriber
    It`s who you know. Do you have contacts? Can you get some?
  • Innovator7Innovator7 Posts: 9subscriber
    Most entrepreneurs on SuN seem to be in the service businesses (web site design, marketing...) so I don`t expect much.I`m creating demand for my products via Ad bu Google and banner ads in specialized web sites, and via press releases.I`m sure some people inside the distributors I use have looked at my web site and products, because I emailed them via their wed sites, and I got corresponding hits, even from worldwide locations I emailed to.But in large companies decision making process is slow, especially if my emails get in some underlings.I just learned that over 3.4 Millions registered in GlobalSpec including 1.3M technical people.  So TAM (total available market) for my products can be millions .  I just hope the Chinese don`t start to copy-cat my patent-pending products soon.  For now I don`t worry much because they`ll face IP barrier and a few trade secrets I got.  (If a distributor sell copy-cat products, I can sue them when my patent is issued, and I can accelerate patent prosecution if I see copy-cats.)
  • Innovator7Innovator7 Posts: 9subscriber
    Thanks for the precedeing post.I`m doing just that, preparing packages of sample and photos.  It`s just my help takes his time.  He`s a perfectionist.I`m attending PCB West exhibition to make contacts with interested engineers and technicians and to show my stuff in a hospitable booth if I can talk the person in charge to do it, possibly in trade.
  • jamnjimjamnjim Posts: 0subscriber
    Thanks for the precedeing post.I`m doing just that, preparing packages of sample and photos.  It`s just my help takes his time.  He`s a perfectionist.I`m attending PCB West exhibition to make contacts with interested engineers and technicians and to show my stuff in a hospitable booth if I can talk the person in charge to do it, possibly in trade.
    What do you do if distributors are knocking down the door to sell your product, but you don`t have enough profit margin to allow them to add an additional 30-40% markup and still keep the cost at the MSRP? ($299.00) 
    If I sell them our product at wholesale, we will literally break even (no profit at all) when all manufacturing costs are considered. You can`t support a business that way! We could force our costs down if we could order larger quantities of the components we buy from our vendors, thereby securing better pricing. However, you have to have the sales to justify that first, and the sales will only come if you have a lot of distributors.  It`s the chicken and the egg dilemma.  Maybe someone on this forum could explain how miracles work.     
  • nevadasculnevadascul Posts: 3subscriber Member
    Have you thought of partnering with one of your distributors to help pay the manufacturing costs?  Say, approaching Harley-Davidson and offering exclusive distribution rights for several years.  In return, they provide the finances to bring the product to full market. 
  • jamnjimjamnjim Posts: 0subscriber
    That is a good idea and I have thought about approaching several large motorcycle distributors with such a deal.  I think I`ll request some high volume quotes from our suppliers, say enough components to produce 500 units to start, which would allow me to set the lowest wholesale price possible.  I am not sure that any of the distributors I have in mind will do business in that manner, but what have I got to lose?  There are no crazy ideas when you`re trying to get a new company off the ground.  If the price is low enough, they may go for it.  Thanks for the inspiration!
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