Important: Brand Secrets and Strategies has been rebranded to Retail Solved. Please swap all BrandSecretsandStrategies.com URL’s with RetailSolved.com. This is now the Bulletproof Your Brand podcast. Thank you for listening!

Featuring Lois and Bob Gamerman With Soft Stuff Distributors
Retail is broken beginning with our food supply system. It frequently makes it difficult, if not impossible, for brands and retailers to meet the needs of their shoppers. Covid exasperated this.

Distributors play an important role in delivering your favorite brand to retailers. The challenge is that some use outdated broken models that favor their success at the expense of brands and retailers. This is a big reason why mainstream brands ship directly to retailers and avoid using distributors.

Learn creative ways to maximize sales, support local initiatives, and help retailers convert occasional customers into loyal shoppers.

You will learn how to:
Ensure your customers can find and buy it wherever they shop
Avoid frivolous deductions that waste money and valuable time
Maximize your promotion ROI
Give your retail partner a competitive edge
Reduce brand killing out-of-stocks
Have your brand promise reflected in across every retailer
And much much more!

We weren't that smart. We weren't smart enough to figure out how to play all the shell games and get all the backdoor money that the larger distributors were. We do it our way, which is the lowest price that we can get from the manufacturer.

We have a transparent go-to-market model, and we use our landed cost. We don't shelter anything. We use our landed cost to put our profit margin on it.

And we find that we end up being less expensive in the end run, where the larger distributors aren't really making money on the front end. They're not making money on the sale. They're making money on figuring out how to shake down a manufacturer or hide money from the retailer.

And that's one of the things we do is we make it a little simpler, and we work more as a partner to get the product to market.

I think it's really important for emerging brands, whether they're better for you brands or not good for you brands. It doesn't matter. When you take that leap from concept to creation and then creation onto shelf, you need to be educated.

We're learning every day, and we've been in business for 31 years, that the ego satisfaction that comes from being picked up by a large distributor or a large retailer sometimes is the antithesis of success. If you're not savvy enough to know what the playing field rules are, then you're going to lose.

Are you ready to hear what you need to know about distributors? Let's start the show. Hello, and thank you for joining us today.

Now here are Lois and Bob. Share it for showing up.

I'm really glad that you're here. Today, we're going to be talking about a topic that a lot of people overlook. And yet it's a topic that can derail and even bankrupt a brand.

It's critically important that you have a distribution system that aligns nicely with your mission and more importantly, that helps you give the very best customer service to the brand, to the retailer that you're working with. So today we're going to be talking about distributor horror stories. How can you fix our broken food system?

And when I say broken food system, what I'm getting at is that we make it extremely difficult for small and emerging brands to succeed and we need to change it. We need to make it easier for you to grow and thrive because you're where all the innovation is coming from. My mission is to make a healthy way of life more accessible by helping you get your brand under more store shelves and enhance more shoppers, including online.

I launched this series after Expo West was canceled to help brands that are impacted by COVID. So do me a favor, reach out to me and let me know what keeps show up at night. What do you want to see on this series?

And I'll do my very best to find the best experts in the industry to help you address these specific questions so you can get a good night rest. I'd like to introduce Lois and Bob and they've got their distributors kind of teed up a little bit. And what I find interesting about them is they're not like a lot of distributors that are about their bottom line.

They're about how do they make this process work better for you? And if we're going to fix our broken food system, we've got to start by making sure it's easy to get your product on the store shelf and make it easy for customers to find and buy your product wherever they shop. So Lois and Bob, you want to talk a little bit about yourself and introduce yourself.

Lois, you want to go first? Sure.

I'm Lois Gamerman. I'm the president and CEO of Soft Stuff Distributors. We've been in business for 31 years and we provide food and beverage solutions to the hospitality and retail industries.

I'm Bob Gamerman. I'm Lois' partner and her husband and co-founded the business 31 years ago and we're just here to figure out how to be the best partner to the industry.

Thank you for sharing that. So I'm going to go way, way, way back in the way back machine and kind of talk about what this industry looks like from a top level view. So way back when I started this, so you've kind of been around for a while, we had distributors, every brand went through a distributor.

And that's how we got our product in front of retail. So when I worked for Unilever and Kimberly Clark, etc. Back then, they had distributors.

We did not go to direct to retailers. So why aren't those distributors around today? Well, and this is we'll be able to clarify in a minute, but distributors didn't provide any real value.

And so the challenge was, it became more about how much money we could pay the distributor or put in the distributors pocket that did not actually end up on a store shelf or did not actually go to the customer. And because of all the complexities and all the issues and stuff like that around that, the big brands went to direct delivery on their own. Well, in natural, small brands need distributors.

I mean, there's no way you can deliver to every store yourself. So the reason we're having this conversation is we want to highlight what works and what doesn't work for brands. And we want to try to make it easier for you to succeed.

So when I said that big brands used distributors before, again, when I started, I used to call on several different distributors in the Colorado area, actually several different states. And that's how we got a product into distribution. We had to pay for slotting to get the product into their warehouse.

We paid for promotional programs, etc. And those promotions did little or nothing to drive sales. And then because of a little retailer called Walmart, we had to get really smart, really quick.

So we started going direct, like I said, and we started working directly with the retailer. Now, the benefit was we were able to drive more sustainable sales through that particular retailer by going direct than we were through the distributor. So the reason I want to frame this, the reason I invited Lois and Bob on, is because an independent distributor is there working on your behalf.

In other words, their success is your success, is the retailer's success, as opposed to a lot of the distributors today that don't really have that mindset. And what I'm getting at here is that one of the biggest distributors in our industry bragged about having a record year, record profit year while a lot of small brands are going under. And I think that that's really sad and frustrating, a sad commentary on an industry.

So, Lois and Bob, can you please talk about the difference between an independent distributor, why that matters, and then kind of talk a little bit about what you've seen in the industry. And of course, we don't want to badmouth any distributor by name, but generically speaking, what is it that space that you fit? How do you fit that void?

Well, first of all, when we started, we weren't that smart. We weren't smart enough to figure out how to play all the shell games and get all the backdoor money that the larger distributors were. And we probably still aren't smart enough to play that game.

So we do it our way, which is the lowest price that we can get from the manufacturer. We have a transparent go-to-market model, and we use our landed cost. We don't shelter anything.

We use our landed cost to put our profit margin on it. And we find that we end up being less expensive in the end run, where the larger distributors aren't really making money on the front end. They're not making money on the sale.

They're making money on figuring out how to shake down a manufacturer or hide money from the retailer. So one of the things we do is we make it a little simpler and we work more as a partner to get the product to market.

I also think that it's really important to recognize that, as Bob touched on, the departments within these larger massive distributors that are just focused on creative accounting when it comes to paying bills to the brands that they've got under house in their warehouse. Obviously, that's a profit center for them because they wouldn't have as many people and as many locations doing that throughout the industry. I think it's really important for emerging brands, whether they're better for you brands or not good for you brands.

It doesn't matter. When you take that leap from concept to creation and then creation onto shelf, you need to be educated. We're learning every day, and we've been in business for 31 years.

The ego satisfaction that comes from being picked up by a large distributor or a large retailer sometimes is the antithesis of success. If you're not savvy enough to know what the playing field rules are, then you're going to lose. You can say, I sold X number of pallets into a specific distributor, but if it took you a year to get paid for it, and you had to guarantee you were buying it back, whatever didn't sell, and dealing with all of the massive deductions, then it wasn't profitable for you to do that.

We approach distribution. Now, let's have full transparency here, because that's the people we are. We're easy people to do business with, because business really shouldn't be complicated, and it shouldn't be painful.

You have something, you want to sell it, somebody wants to buy it, and somebody needs to be in between there to facilitate transactions on both sides. So not to use an old trade expression from, what, the 90s, it's a win-win situation, right? That's what it should be.

Bob and I cut our teeth on food service, which was a whole different model of how you deliver, whether you're delivering to restaurants, you're delivering to convention centers, hotels, independents, or lobby shops, or small gourmet shops. It was always about providing them what they needed in a timely fashion. Lower minimums and more frequent deliveries.

And that's the model that we bring to retail.

I noticed that Cisco just announced that they were now going to start lowering their minimum to help their customers make it through this time. This is something that we recognize that we already had and that we marketed as a value that we brought to this situation we're in now.

I'm glad you did that. Sorry, go ahead, Lois.

That's interesting. Eight months into the pandemic, with hundreds of thousands of restaurants that have either closed temporarily or permanently, that's where they've just decided they need the land.

Well, which is interesting. I mean, they finally got it. So maybe give them a little bit, not really.

But the point is that, yeah, we're all in this together. And one of the things that makes natural natural is that we are a thriving community here to help each other. We work together in concert, in collaboration, to help the brands that are in natural succeed and survive.

And as I referenced a minute ago, when you've got the biggest distributor bragging about record profits while other brands are going under, that doesn't make sense. And actually, on that note, there is another webinar program that I was told about by a friend who a different distributor came on and told all the natural brands that, hey, you need to come with really deep discounts in Q3 and Q4 because that's what you need to survive. Meanwhile, they did nothing to help out those brands in Q1, Q2 when this thing was so bad, and it's going to get worse[…]

Instead of trying to think of a strategic way to help brands, I want to back up to something Bob said, which I love the way you put it because this is what's so critically important. People need to understand this, front end versus back end. So what do you mean by back end?

You're talking about the deductions and the promotions that do nothing to drive sales, etc. etc. etc.

So I recently did a podcast episode about distribution horse stores, which is not really aligned with this, but it fits in perfect. So on an earlier webinar share, one of the earlier webinars I did, I had Eric Skea on, and he said that his wife called him and said, I've got good news and bad news. Well, the good news was they sold a truckload of stuff for $19,000.

The bad news is the distributor gave him a check for $12.34. Now, that's a little bit extreme, but I hear this all the time. So why did that happen?

Well, it's about deductions. It's about all the fees, all the things they charge. Go figure.

Imagine this. First of all, actually, I used to be a DSD distributor. So I used to drive my own truck back up to the store, back door every morning, super early, and deliver chips and stuff like that.

So I have a really good understanding of what that looks like. I've been a grocery manager, so I've worked with distributors as they bring in the bread and the produce and other products, et cetera. So imagine this.

Your product is in a distributor, one of the big distributors that we're alluding to. If you want to know, they make a commission on whatever they sell, right? If you want to know where your product is selling, you have to pay extra money to buy a report to tell you where your product is selling.

And then it really doesn't even tell you exactly specifically where your product is selling. So you can't close the gaps. The point being is if they were smart, and I'm going to word it that way on purpose, they would say, well, if they sell more stuff to more retailers, we make more money.

But instead, they're focused on their bottom line, just like Bob said, front end versus back end. In addition to that, doing a promotion through a distributor is the worst thing you can do. And I'll give you another example why that matters.

As working with a brand, she's in California. She got her product in distribution in Florida, Indiana, and Louisiana. Well, first of all, she can't support those brands in those states because it's too far away.

Secondly, the cost to put the product on those shelves in those stores means that she's already priced out of the market. And then to add injury to insult, they want her to promote her brand across every store. But wait a minute, she doesn't have distribution in every store.

So how does that work? Doesn't matter. That's not how they think.

So the distributor approached her. She thought she had this great opportunity. Look, I got picked up by a distributor.

But the reality is, that's almost a death nail for her business. And so when we're talking about front end versus back, and we're talking about traditional distributors that, again, we're not kind of talking about. I mean, we're not pointing, I mean, mentioning by name versus what you guys do.

The point is that you guys are focused on doing the business or supporting their local brands, etc. And again, it's about how do you help the brand succeed because you're smart enough to realize that their success is your success and the retailer's success, etc. It's a long-term relationship as opposed to something that I would call very transactional.

Your thoughts?

Well, I would have to say that I understand, because I'm a paranoid distributor. All distributors are paranoid because you don't want to give your account list out and have anybody know where all your customers are when you're in food service. In retail, it should be a totally different story, because everything's out on shelf.

So if you are ABC Biscuits, we'll use that as a fake company, right? ABC Biscuits is if you walk into national retailers and you see it on the shelf, somebody got it in there. I can't tell you how many times we've had conversations.

We actually had one yesterday. We had a meeting with a company that does consumer packaged goods, imported products from Europe. Products were amazing.

I said, I've seen you're everywhere. I walk into Giant because we happen to be in the Mid-Atlantic. And she's like, Oh, my God, my products in Giant.

I didn't know that distributor won't tell me. We think that in the retail paradigm, that the conversation and the relationship should be a triangle between distributor, manufacturer and retailer. And you can shuffle that any way you want.

We can only guess what the distributor, as the distributor, what the retailer wants. We can't commit to what the manufacturer can afford and or is willing to do. But if there's a holistic conversation that comes out of a strong communication circle, then everybody is going to win, especially when the distributor is committed to making sure the shelf is always full

And if the manufacturer is going to be part of the marketing and driving sales, they need to know where to drive the sales to. So that communication needs to be available. I mean, one of the more useful things to find a product is the where can you buy it portion of a website.

And if they don't have accurate information, it's no good.

Well said. And on that note, I remember one of the things I loved about being a DSD driver is that every morning I woke up, I decided how much money I'd make, literally. Well, it's not exactly the same with you because of the way that things work, but yet it's a lot closer to that.

And so the idea behind it is that if you're an integral part of my success, my sales, my marketing, then that's a win-win for all of us. And I love what you were just saying, because if I can work through you to help execute at shelf, that is how I succeed. Whereas a typical distributor drops it off in the back door and they're done, they don't care.

And that's not going to help me. And so one of the biggest challenges every brand fails, every brand has, is with retail execution. And the reason this matters is because if you don't execute flawlessly at shelf, then you're pretty much doomed to fail anyhow.

So how do you help your brands, brands that you work with, execute their strategy at retail?

Well, that's a really good question. I think that it's really important to determine where the product is going to succeed in the store. So if it's a beverage, does it get sold by the six pack or four pack?

Is it with traditional soft drinks? Is it in the cold case, sold by the individual? Are you able to get an end cap?

What's involved and what is it that the retailer is willing to do? And unless the conversation also includes the manufacturer, the manufacturer will then never know whether any of the promos that are put out there are successful, right? You never have that information.

So we like to have conversations with store managers, with regionals that let us know where they believe that the product will be successful. And I think that most importantly, especially for emerging brands, the path of least resistance for every distributor is to promise a free fill. Now, you think about that.

What does that mean? You actually as a manufacturer just gave away one case, ten cases, 300 cases, whatever it is for however many stores or how many locations within the store. I learned in my very first selling job when I was selling restaurant equipment and I placed a machine on, it was actually an ice cream machine for tailor freezer equipment, on loan for someone who dragged it out.

It was a demo. Dragged it out over the course of a summer on their food bar. And the owner of the distribution company I was working for, he taught me a very valuable lesson and it stayed with me all these years later.

When you give somebody something for nothing, there's no emotional investment in making sure that it works. So the person that I lent the machine to had no emotional investment. They didn't[…]

They were going to use it for as long as they used it. The machine broke or they didn't have a product to put in it. They didn't care because it wasn't costing them money.

If a distributor can go out and make a promise that we're going to do a free fill for five stores, tensors, whatever it happens to be, you have no guarantee of success.

And if you were successful, how long is it going to take to recoup that? When do you get to zero? And the model, especially for smaller brands, just doesn't work.

So having a conversation, a robust conversation between all stakeholders in this and deciding that perhaps free fills are not what's best for everyone or at least the brand and the distributor, because the distributor is not making any money doing it either, unless they are billing back the manufacturer for time and warehouse space and things like that. Why don't we learn how to work in the world of guaranteeing the sale, that you set parameters ahead of time, what the expectation is, understanding what the industry averages are for specific products moving off the shelf or out of the freezer or out in the cold case. How many units per week do they consider to be successful?

And if you can define that ahead of time, you know what you're working towards. You know what success looks like. Free-fill, there's no blueprint for success.

You've given your product away. You can be very successful at it.

We could sell to everybody in the country if we never charged them for it.

Well, and that's a good point. That's why I've been niching down and talking about trademarking, because that's the biggest line item in every brand's income statement. And yet most of it's wasted.

But I love the fact that what you're talking about in terms of the slotting is what a lot of people call it free-fill. And the point is, yeah, you're right. You had no value.

I think it's theft, honestly. And what people don't realize, consumers especially, is that every product on a grocery store shelf is a guaranteed sell. If I knock something off on a display or something like that, that goes to the reclamation center.

The brand gets deducted for that damaged can or whatever it is. It's a guaranteed sell. And so to give a brand, give a store a bunch of free fill of my product, to get it in distribution, to me that doesn't make sense.

And then there is one chain, not to mention any names, that charges a premium over and above all of this to help maintain your stuff. Wait a minute. If I go to a Home Depot or to an appliance store or something like that, and I buy appliance, that company doesn't get a guaranteed sell.

If they don't sell the product, they lose money. That's the risk and reward of having that relationship with the customer and the brand. But yet in this industry, we set the brands up, such as a high bar in terms of what they have to pay to get on the shelf and everything else, that it makes it difficult to succeed.

Back to my point about our food system being broken. To go one step further, when you're talking about free fill, I love the fact that you're talking about the fact that there's no incentive for the retailer. And that's exactly right.

So the retailer gets to make a profit on a case or two cases or whatever it is, with no investment on their own. No investment on their own. But yet the retailer then wants me to have a relationship with them.

If I could instead put my product on the shelf, have them invest in it, pay for it, etc. And then use those funds to promote my product on the shelf, I could drive traffic in their store. What a concept.

I would give the retailer what they really want, as opposed to just throwing dollars at them in the form of product. So thank you for bringing that up. One of the things I think is interesting about where you guys come from is making that pivot from food service, you're still in food service, but also doing retail.

So the fact that you don't have all those bad habits that we find in this industry, that's great. But how is that different for you? What does it look like?

And what have you learned along the way? Because I believe that a distributor should be paid to distribute, not promote, not do the slotting, not do all those other things.

That's right.

So if you're, when it comes down to them, and we learned this in food service as well, is you have to be willing to walk away from deals if they just don't fit with your model and if you're not going to make money. A lot of people don't show the discipline. And that's how this all happened.

Somebody said, and I'd like a free fill. And, you know, it's no harm in asking that. But somebody needed to say to them, no, that's not happening.

And, you know, we, I think that if you stay disciplined and you have the strength to sell your value, as opposed to selling on price, which is very hard to do in the grocery business because everything's a quarter of a penny. I think that you set up the expectation that, yeah, these guys aren't going to fall for all my stuff, but they're going to bring me value and they're going to support their product and act with integrity. Something you had said before was, what do we bring to that success on the shelf?

And I think that as a distributor, the value we bring is the infrastructure and the dependability. And we do have a sales component, but I think that there are steps that are probably outside, should be outside of the distribution realm, which is the marketing from a higher level. We support, we're probably one of the more active, from the food service point of view, active marketing distributors out there.

From a retail point of view, we probably are not. And we're growing into that. But I think that the manufacturer and probably a broker network adds more value to the marketing side than a distributor should.

I was also going to add, sorry, that one of the things we pride ourselves on is our ability to maintain just-in-time inventory levels for our customers, especially in COVID times. People are willing to invest less in in-house inventory because they just don't know what the world is bringing, right? So in food service, being able to order today, get it tomorrow and be able to use it tomorrow over the next few days and then order again, so you're ordering less, but you're getting it more frequently, really helps to guarantee the successful pull-through of your product.

And if there are products in retail, not necessarily that isn't necessary to break cases, but in food service it is, I would strongly suggest that new and emerging brands consider partnerships with companies that do both, right? That have great reputations for not letting you down. We live by one of the philosophies we live by here, is that opportunity is perishable.

So if we were to look at food service, you have a chef that's expecting, I don't know, Beef Wellington to be delivered on a Thursday for an event that he has on a Friday. If it doesn't show up until Saturday and the event was Friday, what good did that do? So let's take that to retail.

If the shelf is supposed to have, or the cooler case is supposed to have, XYZ product in there, your product, and I come in there as the consumer and it's not in there, and that's because it was sold out. They carried a smaller inventory because the philosophy of the retailer is that it should be just in time, nothing in the back of the house, because you're investing in tying of dollars and stuff that's sitting in the back room that has a greater chance of theft or breakage or whatever the deductible nature of that product would be. So I come in there as the consumer, I can't get it, so I make a decision to go someplace else to find it or I buy it online.

So that retailer has lost the business. And the manufacturer doesn't have the sale for that product because the distributor's model was that the frequency of delivery was limited. The minimums for delivery are too large.

So the frequency isn't there. And unless it can be aggregated with a $1,000 truck that's coming out there, it's going to sit empty. And then you run the risk of another product coming in through that distributor and taking your space.

So our commitment to our clients is that we're going to have the product for you, we're going to get it for you when you need it, and we're going to make it painless.

That is so critically important. And that's really key that everyone really understands this. When I delivered through a DSD driver, I made sure the right amount of product was on the shelf, it was displayed properly, a little bit different, because I actually merchandise the chips myself.

When a brand puts their product, goes through a regular distributor, the store personnel or whoever displays it, and you see the bags that are turned all crooked and squished and broken chips and stuff like that. But when you look at something that comes in through a DSD driver, it looks right. And it looks that way because they know that that impression that their product is making with the customer is critically important.

And they also know that if a lot of the products damage, they have to eat it, they have to take it back, et cetera, because that impression, that's your brand, because the impression that it leaves with that customer is not good. And remember, your brand has your name on it, therefore you want to make sure you leave the very best impression. So now with that said, one of the things you're talking about is just-in-time inventory.

And so everyone needs to understand why this is so critically important. Stores don't have huge back rooms if you've ever been into one. They've got very limited space.

They are not in the business of warehousing things. So back to our conversation a minute ago, if you're in an appliance store or car dealership or whatever, they have what they call a floor plan. That floor plan is where someone loans them money to buy all that equipment before they sell it.

And the problem is that's extremely, extremely expensive. Well, stores don't do that. It's a guaranteed sell, right?

So for you to be able to manage their inventory is a good thing. Also, another thing you were talking about, spoilage and all the other things that could happen with your product, our products have codes on them. They don't last forever.

So being able to manage that more effectively too, and this is where I'm going with this. And I'm so glad you guys brought this up. If I go through a distributor, they're focused on what makes sense to them, traditional distributor, versus if I bring the product in myself or use you a local independent distributor.

The reason, I'm the one who invented the distribution tracker that spends users. I'm the one who convinced them to start selling store level and retailer level data. They wanted nothing to do with it.

But the reason I was able to convince them that it made sense is because if you're a brand, you've got to have line of sight to what's being sold at the shelf. So the backstory behind this is there is a legacy brand in the natural channel that was in distribution at a retailer. I don't want to mention the name.

And they didn't have the product in every store. Well, the distributor who manages your inventory, along with the brand, along with the retailer, did not coordinate. So it was a great promotion.

A lot of stores didn't have it. A lot of customers are upset because they couldn't buy it. So then the retailer reaches out to the distributor and says, give me everything you've got.

The distributor did. So now all of a sudden, they've got that product and distribution at every store. They've already got a lot of upset customers.

So even though they weren't able to fill those orders, because, you know, can't make a, never get a second chance at making a good impression, now they're completely out of stock when different retailers had that same promotion the next week. The point, the moral of the story is, is that distributors do not manage your product effectively. It's got your name on it again.

Out of stocks, things like that are a death nail to every brand. You've got to make sure your product is on the shelf, that it looks right. And the only way you can do that is if you have control over how your product gets put on the store shelf, how your product gets brought into the back room.

And so what I teach brands, and this is why this is so important, is how to leverage those strategies in Lois slotting into those other fees. How do I help the retailer succeed with my product? Your thoughts?

You know, having people who are able to go in stock shelves after they, you know, on the distributor level, that's another level of cost. So it seems that retailers do have the available manpower to be able to put your product up in a floor plan situation, right? They know where it's on the planogram, and they'll fill, because it's up to them to make the decision as to what product is ordered back in.

If they have no touch point on it, then they have no idea where they need to be, because they're not paying attention to it

Actually, it's somewhat irrelevant right now, because stores aren't letting people come into the stock shelves. Right. There's a limited access to doing that.

I think this is a great opportunity for distributors to establish that as an ongoing model. You were asking about commitment to just in time, and how keeping people from being out of stock. We are very good at gauging and demand planning for us, and usually are in a position to respond within a day.

And that's the difference, is we don't have an efficiency of weekly or biweekly deliveries that are large. We're next day delivery. And we are on demand for most parts of our distribution market.

You get an order in by 6 o'clock at night, and we get it to you the next day.

Great. And that's what's so... Go ahead, Lois.

I was going to say, there is a question that...

Yeah, I was going to answer that. So I was going to ask you to read up. So thank you, Oren, and actually I'll get to it in one second.

And thank you for saying that, Bob, and thank you for addressing that. And by the way, any other questions, please bring them up. Hi, Stephanie, how are you doing?

And one of the things that, and I'll get to your question just the second one, is like you said, that it doesn't, I forget exactly the philosophy or train of thought, but the lack of creativity. The bottom one is this, it doesn't take a lot of, oh, I remember, just in time inventory, being able to stock the shelf on a regular basis. As a DSD chip driver, I could keep the product on the shelf managed properly.

The product in the back room managed properly, rather than overloading the reader. And so if you have a big promotion and you're selling a product that you know you've got to have a lot of extra back stock, having the distributor manage that distribution, traditional distributor, is a huge mistake because that's where you fail. So Irwin, your question is a great question.

The reason that brokers, distributors, and a lot of people in this industry say that you need to go with a national distributor is because they don't know any better or because that's the way they've been doing it all their lives. The reason that we've got this webinar series, the reason why Lois, Bob, and Stephanie's been on are on part of this webinar series is to teach you strategies are going to help you grow, thrive, and succeed. The reason we're doing this is to teach you that there's an alternative.

Sometimes that means hiring an independent broker that's going to watch out for your product in a specific region, that's going to give you all that extra love and care and touch and whatever you need to have your product be successful. In addition to that, having a distributor that's going to be focused on what's better for you and what's better for your customer. Remember, if you for some reason pull out of that area, your brand gets bought or whatever, that distributor still has a relationship with that retailer.

So this is all about long term relationships. So can you guys please touch on that

So the question that Erwin asked about national network, that is something that is surely needed and we would gladly have that conversation and be part of the nucleus of creating more soft stuffs everywhere.

Right, or a national distribution network of independent distributors where they have to be like minded distributors. In our case, we do carry refrigerated and fresh product here. We carry packaged product, we carry frozen products here.

So you really should look for, depending upon where you fall out on the cold chain spectrum, right? You want to look for a distributor that has the ability to handle multiple channels of that, because if you're coming to them and they do very little in refrigerated, then you're probably not going to be on a temperature controlled truck and you get pushed off to the side and the sales people don't focus on it and blah, blah, blah, blah, blah. But there's enough emerging companies out there to put your minds together and take a stand.

You don't have to be in with, as like Erwin called them, the whales out there, right? Stephanie is correct in her response that whales don't want new companies. What would they want is to be able to profit off of the back end of the deal.

And they don't want somebody else getting the new company if it happens to go big. And the collecting of those and charging those smaller companies to be part of their program is a bet for them as to they'd want a thousand people that if it doesn't cost them anything to bring it in to bet on the one or two people that are going to break out.

But at this point, Erwin, instead of getting a whale, it just takes a lot more work to find regional distributors that are going to cover the country. And they're out there. I know manufacturers that do that.

Well, you know what also is that I don't think that BRAND should underestimate the power of their voice. And there are an enormous number of upcoming companies that are run by diversity founders who don't or traditionally hadn't found success with the larger old boy network that's out there. You know, as the brand, you have a voice.

You can say, I'm sorry, I've seen their contract. It's too restrictive. I can't work within the, I choose not to.

I want a company that's going to take care of me and it's going to take care of you. And in trade off for that, I want a partnership with you as the manufacturer. And here's what we're able to do to support you through social media.

Because this is about the emerging consumer. There's very few people who are making lifestyle changes in their 70s to go all natural. Right?

This is the current consumer and the consumer that's coming up behind them. What is it that they're looking for? What is it that they found so reprehensible about legacy brands?

Why are they staying away from those and opting for products from manufacturers that believe that will benefit them physically as well as emotionally? And they want to support. It's the whole economic cycle of supporting and growing.

Why should the distribution portion be left out of that? Right? Why should we have to beg retailers to take meetings to be able to be the reactive best partner that they've ever had?

So really it comes from, it can come from conversations with the manufacturer. For retailers, really bring your product and they see value in it.

Well said. In fact, on that note, one of the things that I start with, and Stephanie's got a good point, I'll get to in just a second, is that one of the things that I've been trying to help brands with, or the way I kind of frame a lot of this webinar series when I first started this, is that there's a myth that retailers hold all the power. The reality is they need you as much as you need them.

In fact, actually, they probably even need you more, because it's the natural, organic, healthy products that are responsible for all sustainable growth across every category. If they want more traffic in their store, if they want to remain relevant to all the other consumers that are out there, that they're trying to attract, they need you. And so to take that one step further, back to what we're talking about with Erwin and Tom and everybody, and thank you again for your questions, keep them coming, is that if you can work together, find a creative way to bring a couple brands together, to leverage that relationship that you've got, that co-op or whatever you want to call it, to get with a retailer, to get your product on a store shelf, that's the win.

So instead of thinking the traditional model, which it doesn't take any, like I said, any talent, any creativity to write a checker on behalf of someone else. But instead, let's find creative ways to be able to help you work and work with other brands. Bernardo is on the call too, and I'm actually trying to help him get distribution.

And the model that I'm recommending there is that we find a brand that's already in existence that he can pair with and leverage their relationship with retail to help drive sales or in shelf. And a quick point that Stephanie made up, I mean brought up, is that a lot of time, these larger distributors, unfortunately, will take your product to a private label supplier. The reality is that in natural, your ingredients, your recipes pretty much on your back label because that's what true transparency is.

And we've got to protect that. And by going to an independent distributor like you guys, I know that you've got my back and that you're going to do everything in your power to help me succeed. And that kind of brings it around to the where we started this conversation.

So with that in mind, how would you guys answer some of these questions that are coming in about leveraging the independent distributor? Again, if we could put together a group of independent distributors so we get further across the country, then that makes a lot of sense. And remember back that comment I made earlier, I know I'm throwing a lot out here, but you don't want to be selling your product where you don't have customers.

Distributors aren't going to help you with that. Normal distributors, the whales. I love that.

And then at the same time, you don't want to go outside of your area before you're ready. So how would you guys address that? How would you guys help a brand, an emerging brand, an existing brand, scale, grow, et cetera, with your offering?

Well, for us, we're doing a lot of independent, single-store, small-chain business in this market. Don't overlook co-ops, don't overlook farmers markets or farm stores or things like that. You start to see some groundswell of appreciation for your product and sell-through.

You're going to find that you catch the eye of the larger retailer. You have to have some sort of data to back up, because that's what everybody's asking for. What you pull through?

What are your numbers? Do you have your, what is it, IRR reports? Which are extremely expensive, and even big established companies don't invest in that because they're just too much to get, it costs too much money to get that kind of information.

But if you have a good relationship with your distributor, and the distributor trusts you, that you're not just using them as a stepping stone to get into the whale, right? Then they'll provide you with this all through information. They'll tell you where the customer is.

They'll want you to support those brands. They'll want to see, share that information with you. So we have salespeople that are out on the field.

We do social media pushes. We do email blasts. We advertise the heck out of the product in organic ways, as well as in deliberate direct contacts to our customers.

And if you're not growing, then you're dying. So let's figure out how you grow together. I think that there's also an enormous lesson to be learned over the years.

I'd like to spend a minute talking about with emerging brands. You've had success because you've now figured out how to package it. And now you've got it in the back of your car, or you run it a van, or you've got a small warehouse space someplace, and you're humping the streets.

You're doing exactly what you're supposed to do to sell it. And it's grown and you've realized you can't dance, as my dad used to say, you can't dance in two parties at once. It's your other manufacturer or your distributor.

Unless you're only going to stay focused in one small area, you're not going to be able to have the bandwidth to distribute in a large metropolitan area. Have you priced in to the selling price to retailers or food service operators? It's all blurring these days, by the way.

Retail wants to be in culinary and culinary has to move into retail so they can support customers, especially when so many areas are shut down. Have you priced in what a distributor is going to want to make margin-wise? Because when you finally get to the point where you can't do it all yourself and you bring it to a distributor like us and you say, well, I'm selling it for a dollar.

Well, how much are you allowing us to make off of it? And they haven't put it in there. Then you're asking a distributor to take your product on and take a price increase.

And that doesn't work.

And this comes back to an earlier point that we made, is you have to establish value in that product. Many times we'll have a manufacturer say it cost a dollar, and we ask what do you sell it for? Well, I sell it for a dollar or two.

What are we supposed to do with it? Well, you can sell it for whatever you want. Well, you didn't think it was that more valuable than a dollar or two, or you would have sold it for more than a dollar or two.

How am I supposed to create value in it? So the manufacturer really has to be forethoughtful in establishing value that accommodates a profitable distribution and a profitable retail partner to participate.

And learn not to say yes to everything. Oh, you know, I would have brought your product, and if it came in an assortment pack, I bet you would have. Now, what's the assortment pack?

What's going to sell in one neighborhood doesn't sell in another. There's always going to be a lagging variety. Figure out what works for you.

Don't be so eager to do business that you say yes with everyone. Be discerning and figure out how you can maintain control because this is an ugly wild beast that will get out of control for you.

Critically important that everyone heed that warning. You've got to understand it. That's why, and this will touch Bernardo's question and get back to Stephanie and what you said, too Lois, data is important.

But if you're in the natural channel, the reality is that the data is so fragmented and expensive that it's not going to really help you a lot unless you're in a larger natural retail like a Sprouts or Whole Foods or something like that. The point is this, if I wanted to find out how my product is performing against other brands in the natural channel in Denver, Colorado, or in Chicago or wherever, there's no database that's going to answer that question. The problem is, is because of the way the data is structured, where it comes in, et cetera, a lot of the different stores, the Independence versus the Chains, et cetera, there's a lot to this and have impacted in several different podcast episodes

But the consumer data is extremely relevant. So next week on the webinar, we're going to have a company called Makena. And Stephanie Linde and myself are both advisors for that company.

And what they do is they identify or they capture shopper marketing data. And that's far more valuable. So you're absolutely right, Lois.

The data that you get from an IRI Spends or Nielsen can be very expensive if you don't buy the right data. And I find that those companies typically sell you a lot more than you need not knowing or understanding your business. That's why you need to reach out to me.

Everyone is listening. So I can help you identify what do you really need? What fits the bill?

How are you going to answer whatever specific question you have? But more importantly, if I go to a retailer and I can show a retailer how the consumer buys my product and all the other items that they buy, that gets back to what retailers really want to know how you're going to help sell, how you can help increase the traffic in the store, a reasonable profit in the category, help them compete more effectively. That's what it's all about at the end of the day.

So now Bernardo's question. Bernardo, what I tell brands all the time, and I know we've talked about this, is you need to own the strategy in-house. So regardless who you go through, distributor, broker, et cetera, I believe that you need to own that strategy in-house.

FDo not farm that out to anyone else, period, because they use a lot of times cookie cutter strategies that don't really represent or don't reflect how your customer buys the product. The best strategy that I recommend is that in this case, you've got a strategy, you go to Lois and Bob, you say, here's what I'm trying to do, here's where my customer shops, et cetera. How can you help me grow my business with that?

In other words, you're having that conversation, that dialogue that Bob was talking about earlier. And that's how you succeed by not blindly handing the keys to anyone, but instead having that relationship. And as we illustrated earlier, the whale distributors, they're not focused on what makes sense for you.

They're focused on what makes sense for them. They cannot take the time to give you that personal care, that personal one-on-one time to help you figure out how to grow sales, etc. What do you guys think about that, Lois and Bob?

I think that you're correct. I mean, we just talked about that for sure. Simply having the product show up at the back of our doc doesn't end your responsibility in that product pull-through.

It shouldn't. You should be equally as committed to the success of the sell-through as the distributor is.

I think that as much as you're an expert and Stephanie is an expert, things are changing. And the way people are going to get food and other consumer products going forward is going to be an evolving process. I think the key is understanding what value you bring as a manufacturer and a distributor.

And be responsive to the individual location and the evolving nature of how people are going to shop for food. And the people that we're selling to, as Lois said before, is changing. The 21-year-old is defining these changes right now.

And the 17-year-old is going to come behind them and change it. So, I think the most important thing is that your goal is to have product available in the way that these consumers want it. And that changes.

Exactly. One of the things, and Bernardo, your question is, you know, how do you work with, how do you manage correctly, et cetera? One of the things that, again, at the heart of this entire webinar series, all the content I put out addresses that.

And it's this simply. This is your brand. It's got your name on it.

You've got to own the go-to-market strategy. Part of your go-to-market strategy, what Bob was just saying a minute ago, different way to put it, is that you've got to have that relationship with anyone that touches your product. Anyone is involved in your success.

You've got to know, for example, what does the retailer want and expect from you? What are their goals? The reason that I was able to push around brands like P&G, Frito, et cetera, that are all throughout my entire career, is because I spoke retailer.

I understood what the retailer needed. I understood exactly how to address their needs. In other words, instead of saying, look at me, I'm a brand, I need you to do this with my brand, I said what I understood what their needs were

And I said, this is how I'm going to help you drive traffic in your store. This is how I'm going to help you grow sales. This is how I'm going to give you competitive advantage in your market.

The difference is, is that relationship that I had with the retailer, with the distributor, with everyone else, helped me be successful. Point being, is that if I have that in my go-to-market strategy, and I can work with the retailer, with the brand, I mean, with the distributor, et cetera, and I can bring all of these components together, that's how I succeed. That's how I gain a significant and sustainable competitive edge.

That's how I future-proof my brand. I hope that helps. Stephanie says, True.

What do you do with your sales reps, definitely from the reps of the well distributors? Okay, good question for you guys. Part of that, by the way, let me throw this in there, is that instead of just dropping the product off at their dock, arm them with everything that they need to be successful.

Again, their success, Bob and Lois' success, is your success. If you can help them succeed on your behalf, then that's going to help you. You guys, your thoughts?

Well, I got to tell you that what our salespeople do that is very different and have, we've always had this model for 31 years when I was the very first salesperson out there, right? Is that you have to actively be sampling the product to the decision maker, not to the guy who's stocking shelves in the produce department, right? You have to have people who understand the product.

A very first line of product that we ever brought in, that was in bakery was cheesecakes. And I know that if you go back 31 years ago, we were selling them into retail. Having a gourmet frozen product that thought and had the same mouth feel and attributes of a fresh-made product was unheard of, so it was a new time.

I knew that in order to bring success to my sale, I needed to be able to build that cake from the bottom up. I needed to be able to talk about the crumb that was on the bottom and how it went halfway up the sides. I needed to talk about what kind of cream cheese, whether it had sour in it or lemon or just sugar and heavy cream or whatever it was.

So things aren't any different. It's just you're talking about different ingredients, and you're not talking about it from a chemist's perspective. You're talking about it from a creative, engaging way that makes people want to listen and to try the product and give it a chance.

Because truly, right now, the people who are sitting in the chairs of the decision-making chairs, they're not necessarily your consumer. They're just the person who holds the keys of the castle. So we need to make them understand or help them understand.

You don't make anybody do anything. You open the door and allow them to understand that there's a cavalcade of new products that are coming out every single day. If you sat in front of your computer and just read every press release that was coming out, you'd have no time to do anything because there's so many new products that are out there.

So what are you doing to make yours stand out? Make sure that the salespeople have been thoroughly trained, that they're selling the product the way you would sell the product. Because knowledge is power.

And if you haven't given us the knowledge to make us successful, then how do you expect us to succeed? Make sure you have really good collateral material, that it doesn't look like it was done on, you know, I would say by a 10-year-old, but 10-year-olds are great with Adobe. So I would say, don't make it look like it was done by a 70-year-old.

You want to keep it fresh and relevant. You want to be able to hit the clean points that people are looking for.

Tom, I'll get to your question in a second, but actually I need a little more clarification on your question. How many doors do you want your brand to have before you take them on? Take who on?

The big distributors or the retailers? So while you're answering, while you're putting in a little bit more information for us, I know we're coming to the top of the hour. This is a conversation we're going to need to continue because it's so important and we're getting a lot of good engagement.

But before we do that, can you tell us a little bit about your business and how we get a hold of you? And then we'll come back to Tom as soon as he... Tom, please give us a little bit more information so we can answer your question.

So tell us about SoftStuff Distributors and how we get a hold of you. And there's information in the chat... I mean, in the chat window about how to connect with you guys.

So we are, as I said at the top of the hour, the previous hour, we're a specialty food service and retail distributor. We provide solutions. We cover Philadelphia, Pennsylvania, through Richmond, Virginia, out to Virginia Beach, Chesapeake area, Tidewater.

And we run multi-tank trucks every day in this area. The best way to get in touch with us would be to email me or Bob, but I'm available by email at loisg.govsoftstuff.com And I'm Bob G at gosoftstuff.com.

And Tom, I started the hour saying that we weren't that smart.

And actually, we enjoy starting off at the bottom with people. So we have no standards as to how many doors you have to have before we would bring them on.

We help pioneer brands.

Right. Or if you're unhappy with where your current distributor is, and you can articulate that discomfort to the retailer and say, I have what I believe is a better partner for both of us, not just a better partner for the brand, then it opens a greater dialogue. And we're here to help you.

We're all going to succeed.

That's what I love about what you guys are sharing, because that's what this is all about. A comment that you made earlier about the contracts and knowing what you're getting into, you don't want to sign a prenup on the first date. You've got to have that relationship.

And a lot of these big distributors, they put out so much. I mean, they restrict you so much that to get out of that deal is extremely difficult, costly, and it can even bankrupt your brand. So before you choose any distributor, as you're thinking about choosing a different distributor, the moral of the story is, make sure that they align with your mission, your go-to-market strategy.

FMake sure that they can help the kind of distributor like Lois and Bob that can help you succeed wherever you're trying to sell your product. And again, thank you guys for coming on. I really appreciate that.

And we're definitely going to be having more conversations about this. One of the things on that note, the reason we got connected was through Stephanie. And we're actually going to be putting together content to help any type of business succeed.

We're going to talk about the foundational things that you need to have in your business to help you grow and thrive. And so keep an eye open for that. Do me a favor again, share this valuable content with anyone and everyone you know.

The recording will be live in just a little while. And again, thank you guys for coming on. I really appreciate your time.

And thanks everyone for showing up.

Thank you for everybody.

Thank you, Stephanie, for the introduction to Dan and Dan. Thank you for being such a wealth of knowledge. We look forward to being connected in the community.

Thank you all.

Thanks. Appreciate it. Thanks, everybody.

I want to thank Lois and Bob for coming on today. I'll be certain to put a link to Soft Stuff Distributors on the podcast web page.