Distraught Over Distro
Growing pains of finding the right distribution partners
If you take a peek in the back of our 9th Ave space, you’ll see that it has been transformed into a production/packing facility. The screechy sound of labels printing fill the air, as one of our team members busily puts together the day’s shipments — one being driven over for a local delivery and others being triple checked and secured for transit across the country.
Since the start of our wholesale/CPG biz model, we’ve only self-distributed, packing everything ourselves and carting them over to the local post office or UPS store. But as volume has steadily increased, we’ve started to dabble into/consider what it looks like to work with a distribution partner. Below are some of our experiences thus far:
the chicken or the egg
An interested local grocery really wants our product(s) but does not work with individual brands — only with distributors. We reach out to a few distributors and they say we need to have an existing account with specific groceries to be considered (one being the grocery that wants our product). Very confusing.
the markUP
So distributor, let’s chat pricing. If we went direct to local grocery, we’d offer a case for let’s say $192/case wholesale. Distributor requires 25-30% markup so we do an exercise to halve our already lean margin to accommodate distributor. Even still, distributor offers local grocery a higher price and subsequently leads to a higher MSRP. We lose, grocery loses, end customer loses.
the bigger the better?
Of course it’s a volume game. And a way to ultimately reach more/new accounts. You’ve got our attention…for a brief moment. Conversation quickly turns to “i’ve never heard of gochujang or can we re-label your dwenjang as Korean Miso to a wider market?” This is when we start to shut down as we realize that bigger is not always better (at least right now) for the brand and products.
the “international” aisle
This scenario with the grocery/distributor has helped uncover some answers to personal musings on why the “international section/aisle” all look the same or aren’t that great. There are so many great products/producers out there but unfortunately the economics don’t make sense and/or the eye for discovering new products isn’t just there yet. Props to stores such as Bernal Cutlery and Bi-Rite (not just because they carry Queens hehe), but they work with both distributors and individual businesses and it shows in their curation and selections <3.
For now, we’ll keep searching for the right partners! There’s definitely good ones out there and we gotta also keep looking and connecting. Until then, we’ll be happily packing and fulfilling your packages/shipments for you :).