Some brands choose to work with food distributors instead of food brokers, hoping to get more bang for their buck.

Like a broker, distributors have relationships with high-volume retailers and can assist with getting new products on the shelf. Unlike a broker, a distributor purchases product upfront, takes possession of the product physically and then resells it to retailers.

Since distributors take ownership of the product, they also stock inventory, take orders from retailers, manage the inventory on the shelf, service the retailer’s needs, introduce new products into retail, deliver the products to the stores (DSD – direct store delivery), handle the returns, and normally assist in any product recalls. For these services, distributors take a margin of 20%-30%.

It is certainly appealing to have this long list of responsibilities taken off your plate, but it’s important for brands to realize that working with a distributor could mean losing control of the retailer/buyer relationship. Additionally, since distributors represent hundreds, if not thousands, of brands, your brand will most certainly get lost in the shuffle.

Just like with any strategy, brands must weigh the pros and cons of all options and chose the partners that match their goals and values best.