March 13, 2017

Guest Post – Pros And Cons Of Hiring A Product Broker

small business processesDon’t have the financial resources (or time) to hire and train a sales team? You’re not alone. Many small food businesses don’t build an internal sales team, so how do they get their product into stores? Product brokers. These marketing intermediaries essentially replace the need for a sales team by doing all of the customer outreach for you. A good product broker will be connected to major players in the industry so they can get your product in stores you never thought possible. But, before you decide to hire a product broker, make sure you understand all of these pros and cons:

Pro: You can focus on other areas of the business.

Trying to make a name for yourself in a competitive industry is time-consuming, especially when you’re a small business and sales is not one of your strengths. But, if you hire a product broker, you won’t have to worry about this aspect of your business, so you can focus on what you’re actually good at.


Con: Brokers may be expensive.

The pricing structure will vary depending on who you work with, but many brokers will ask for a monthly fee on top of commission. If you’re a small business, paying for a broker may be tough, but it should pay off in the long run if you hire the right one.

If you work with a broker who asks for a monthly fee, be sure to do your research prior to hiring him. Brokers who receive a monthly fee on top of commission don’t have as much motivation to sell, so you have to be confident you have found a reliable broker who won’t just take your money without doing the work. Ask for references so you can talk to other manufacturers who currently work with the broker and get a better feel for his professionalism and performance.


Pro: You can tap into their network.

As previously mentioned, product brokers have major connections with buyers within the industry. Most of these buyers are impossible to reach by email or phone, but brokers can easily schedule a meeting and waltz right into their office to discuss a new product. It could take years for you to build up this kind of network, and you might not have that much time to waste if you are eager to start selling your product and making a profit.


Con: Some brokers will require exclusivity.

A lot of brokers will require that you give them exclusive rights to your products in a certain geographic region. Why? Brokers don’t want there to be any overlap when it comes to pitching your products. For example, it would be embarrassing if Walmart received sales calls from two brokers in the same territory who are both trying to sell your product. This would make your company look very unprofessional and inexperienced, so to prevent it from happening, brokers may require they are the only ones selling your products. If you’re uncomfortable with signing over these rights, this deal may not work out for you.

Have you ever worked with a product broker before? What’s been your experience?

Joel Goldstein is the President of Mr. Checkout Distributors, a network of 1,000 distributors around the country seeking new and innovative products for their convenience stores, grocery stores and truck stops. Since 1989 Mr. Checkout has helped grow national brands like 5 Hour Energy and Pepperidge Farm using their DSD (Direct Store Delivery) network. If you have a product that they should see, you can submit your product for review here.

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