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.
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.
| 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. |
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 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.
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.
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.
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.
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.
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.
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 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:
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.
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.
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.
