The distributor relationship is critical to the success of your brand.  Most retailers don’t want you dropping off cases from the back of your pickup, even if you can drive to all the stores. You will need a distributor.  Let’s review the Icebergs to avoid when working with distributors.

Distributors can open new accounts, but it’s not their strong suit.  Despite what they promote, most are dismal at selling your product for you.If you're relying on your distributor to build new placements, they need:

- A sales team with buyer relationships

- A merchandising team with boots on the ground to support reorder flow

Best practice:

Bring an anchor account (a key retailer) to the distributor to establish baseline volume. Once you're in, partner with them to fill in other stores.  Truth is opening doors yourself directly with the retailer works best.

Distributor fees can be steep and painful for cash flow.  Start-up costs are real:

- Warehouse fees

- Slotting fees

- Mandatory OI programs

- Payment lags on first orders

- Free fills

It can take 6–12 months to see a return.  Some fees are negotiable. Most aren’t, especially for emerging brands without leverage.

Often, the retailer will choose the distributor (not you).  If Whole Foods or Sprouts tells you to use UNFI or KeHE, that’s your lane.

You need to build distributor costs into your unit economics from day one.  Plan for 3–7% in deductions and chargebacks.  UNFI and KeHE offer low retailer markups, but they extract more from the supplier through what I call “the cost of doing business.”  That’s a line item I build into every financial forecast.

If you can’t afford those costs? You need to adjust your targets or your pricing.

What not to do:

Don’t push a bunch of product into a distributor and hope their retailer programs will move it.  These programs often mean deep discounts, cherry-picked orders, and no reorders.  That’s how you sell your way out of business.

What to do instead:

Start with a tight radius of stores where your brand resonates.  Build relationships. Monitor in-stocks. Learn.  Find distributors where you’re an important client.

Platforms like Faire and Pod Foods can be great early on.

-They’re not the cheapest, but the transparency and simplicity matter.

-Fewer deductions. Fewer surprises.

-There are also great regional players out there.

Do your homework. Map your distribution plan alongside your retail targets.  When it’s time to scale- budget accordingly, know the landscape, and get support to navigate the big guys.