Distributors in the USA & sales agencies for your product

Identifying the top retail chains in the United States where you can sell your products is relatively easy. Approaching and convincing them is a much bigger challenge.

It may be a better strategy to find a distributor first who can help you to get your products in smaller chains or individual stores, and then help you to get to the big names. Or to start online.

In this article you will find more information on the retail market and guidance on how to convince retailers and distributors to work with you.

Distributor

Find the right retail channels in the United States

The United States of America has a population of 327 million. In 2022, 83% of the population lived in the cities, and this percentage is slowly rising. The average income per capita is almost 60,000 USD. This is promising to sell your goods, but you’ll have to know where to start.

Depending on your product or service you may best start with one agent, distributor or broker for a first state or with a specific target group. As soon as you get the first reference clients, you may scale up.

Market entry approach in the USA

Product type Possible strategy
B2B products, high value, small volumes One distributor or agent for the whole country may do, unless the sales process is complex and local service or maintenance is needed.
B2B products, high volumes For logistic reasons and if applicable for service and maintenance, you may choose for regional distributors
B2C products with regulations per state, like medicines and alcohol One distributor per state
Other B2C products You may start with one distributor first, who is the most eager to test the market for you and support the sales with brokers. Later on you may choose more distributors and set up you local company and do some sales directly.

Major supermarket chains in the USA

The supermarket industry in the USA is highly competitive. It is dominated by a handful of large companies that together control an impressive share of the market. The two largest supermarket chains in the US by marketshare are Walmart and Kroger. Walmart holds a staggering 29% of the total market share while Kroger has around 9%.

Other major players in this space include Albertsons Companies Inc., which accounts for 5%, and Publix Super Markets with 4%. Ahold Delhaize, H-E-B Grocery Co., Wegmans Food Markets, Aldi US and Whole Foods Market are all other notable competitors with respective shares ranging from 2-3%. Together these companies hold over 60% of the total market share across all supermarkets in America.

Walmart, Kroger and Albertsons

Walmart is one of the most well-known US retailers, with over 5,000 stores across the United States. Founded in 1962 by Sam Walton in Rogers, Arkansas, Walmart has become an iconic symbol of American retail. Despite its success and large footprint, Walmart’s presence in the US has been met with some criticism.

Kroger is one of America’s largest grocery store companies, with more than 2,700 stores across 35 states and Washington D.C., including Kroger Marketplace locations and convenience stores like Turkey Hill Minit Markets. Kroger offers an expansive selection of fresh produce, meat, dairy products and other items at competitive prices. The company also has its own line of private label brands such as Simple Truth Natural Foods and HemisFares International Specialties.

Albertsons Companies is one of the largest food and drug retailers in the United States. Founded in 1939 by Joe Albertson, they currently employ over 250,000 people across 2,200 stores located in 35 states and Washington D.C. In addition to their traditional grocery store format, they also own and operate supermarkets such as Safeway, Vons, Shaw’s Supermarkets, Jewel-Osco, Acme Markets and many more.

Role of distributors and wholesalers in FMCG

The role of distributors and wholesalers in FMCG (fast-moving consumer goods) in the USA is significant. They are responsible for buying products from manufacturers and selling it to retailers, as well as providing services like inventory management, storage, transportation and more. Distributors provide a range of benefits to both manufacturers and retailers. By offering cost-efficient solutions for procuring goods from various vendors, distributors enable retailers to focus on their core competencies such as marketing or customer service.

Finding the right brokers for USA supermarkets

The role of brokers in supermarket distribution is an important one. Brokers typically work with manufacturers to determine which products will be stocked at each store; they also often negotiate prices on behalf of the retailer. In addition, brokers may provide marketing services such as coordinating advertising campaigns or managing product displays at retail locations. With their keen knowledge of the industry, brokers help ensure a successful supply chain for supermarket distribution operations.

The Fast Moving Consumer Goods (FMCG) industry is a highly competitive business sector in the United States, with a total of over 5,000 brokers operating throughout the country. FMCG brokers specialize in providing and managing logistical services for businesses that sell consumer-oriented products.

These brokers have become increasingly important due to the rise of online shopping. Online retail stores require more sophisticated delivery systems than traditional store fronts, making them reliant on FMCG brokers to ensure timely delivery of items sold through their websites. In addition, these brokers are also becoming an integral part of effective supply chain management for companies in the US market, helping them to reduce costs and increase efficiency.

Importing FMCG products in the USA

Importers of Fast Moving Consumer Goods (FMCG) into the USA must observe several requirements. The first requirement is that all goods imported into the USA must comply with domestic safety and quality standards, as outlined by the US Food and Drug Administration (FDA). This means any food, beverage, drug or cosmetic products must meet relevant FDA regulations prior to import.

In addition to this, certain categories of FMCG may require specific permits from government agencies such as the Department of Agriculture and the Bureau of Alcohol Tobacco Firearms & Explosives. Furthermore, depending on what type of product is being imported, additional documentation may be required such as a Certificate of Free Sale or a Letter Of Exemption.

You can work with a 3PL (Third Party Logistics) provider who can help you with customs clearance, document preparation, freight forwarding, and delivery. They will also be able to advise you on the most cost-effective way to transport your product into the US. You will then need to ensure that your product meets all relevant regulations and safety standards for sale in US supermarkets. Once this has been done, you will need an agreement with a wholesaler or distributor who can handle orders from retailers such as supermarkets. They may have their own requirements so it’s important that these are met before they will agree to stock your product in their warehouses or stores across America.

Role of a sales agent in the USA

You can see a sales agent as an extension of your own organisation, approaching potential customers. The role may be comparable to a broker, but an agent is more common in fashion, accessories or products for business users.

Travel to the United States for a better impression

The best preparation for doing business in any country is visiting it. This way you can experience the culture, check the shops and build your network.

With Trip.com you can compare flights and also book your hotel.

Hotellook compares different hotel sites so you always have the best rate.

Localrent connects you to national rental car providers per country.

How to start in the United States? Distributors, retailers or online?

If you have a consumer product that you can’t sell directly from your home country to your end customer, you need at least one step in between. This can be a distributor (who also acts as wholesaler or importer), a big retailer directly, or it can be a large web shop. Let’s look at the pro’s and con’s of each option.

Distributors

  • Distributors are used to import, store and physically distribute a product.
  • They normally don’t invest in promoting your product to consumers.
  •  They are the best chance to get your product in the market so that you can gather sales data.

Large retailers

  • Retailers are very risk averse, may ask for a listing fee before  they put your product on the shelves.
  • They can help you promote your product in their stores and in their magazines, but will also ask a fee for this.
  • They are the quickest route to the mass market, if you can convince them.

Online

  • Specialised web shops may have a greater interest in your product than general web shops.
  • They can experiment more easily with pricing and ways of promoting.
  • Volumes may be lower, but working with web shops is still a good way to collect reviews and get brand awareness.

Key question of any distribution partner: how much will I earn?

Distributors are risk averse, they know the portfolio they have and tend to be happy with it. They can’t just add a product or service to their range, since it will cannibalize on others:

  • A retailer has to take another product from the shelf to make space.
  • A web shop only can push about 20 products on the home screen, the rest is in the ‘long tail’.
  • A wholesaler with representatives will only offer his retail clients a limited choice to increase the chances on a sales transaction. If they push your product, they need to stop pushing another one.

Customs clearance for the United States

Getting your products imported and delivered in a specific country can be a challenge. I have good experience with Tecex, who can act as your importer of record and even physical distributor. If you leave your details, they will contact you. 

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    Our consultants typically charge between 3.000 and 15.000 Euro on fees for market research or a partner search, depending on the complexity and country.

    How to draft your distributor pitch?

    I always put a lot of emphasis on drafting a good distributor pitch. Even if you already have great sales materials for your end-users, this often does not make clear what the benefits are for a potential agent, distributor or retailer to work with you. 

    When you approach potential sales channels with your standard documentation, chances are high that they are holding of. If you make it crystal clear what are the benefits for them, like in the example presentation, you will get a much higher response rate.

    Please note that it helps to put concrete data in your presentation. You may think it is sensitive, but just know the secret is in how you achieve the rotation or the low returns level, not in the data itself. So share it here, in order to get the right attention.

    Frequently asked questions

    The best way to find a distributor in the United States is to first decide who are the most likely end-users for your product, whether it are consumers or businesses. Then determine where they now buy your product of an alternative. Before starting to push your product, approach a number of them to ask what they find important and for what reasons they would switch supplier. This way you can position and document your product better before you reach out to a broader group.
    First check whether your product normally is sold through an agent in the United States or that other distribution structures are more common. Then determine the characteristics of your ideal agent, and find a number of these, or outsource this search. When you approach the first few, you will learn what they find imporant and who your competitors are, and you can get a feeling of the commissions they want.
    For the major supermarket and drugstore chains in the United States this may be the case, but it always is difficult. You need a very well documented story and preferably a product that is proven to sell in other countries. Working with a distributor who already has relationships may be easier. Smaller chains and independent stores always buy through a distributor.
    As in any country, convincing a distributor or retailer to put your product in his assortment is difficult. Also in the United States distributors look at the rotation of the product, how easy and often they can sell it, and multiply this with the margin they can make on it. The result should be higher than they earn now from any competing product. Only if you have proper sales data, for example from other countries, they will engage in a discussion with you.
    Resellers and dealers mostly not only look at how much margin they can make on your product, but also what additional services they can provide, like installation or maintenance. If you are already active outside the United States and you have data from other dealers or resellers you work with, this will make it easier to convince them. Preferably use a local party like Alliance experts to find and approach any potential resellers or dealers.

    Be well prepared. All retailers expect you to prove why they are going to make more money with your product than with their current assortment. So you must know the competition.

    Finding distributors in other countries