Distributor

[Sonal Miller]

Hi
I have a fresh, refrigerated product that I currently distribute myself to about 60 grocery stores. We are assessing whether we should go through a distributor. Can anyone give me a general idea of what sort of fees a distributor will charge?

[Keith Futerman]

Sonal,

Take your wholesale price that you would charge the distributor and divide that number by .75 to get the 25% profit margin that most distributors will work on. With some distributors the margin may go as high as 30%. Which would be calculated by dividing your wholesale number by .70

e.g. if you charge the distributor $1.00 for your item, this is what they would in turn charge the retailer for distributing your product.

$1.00/.75 = $1.33 (25% margin)
$1.00/.70 = $1.43 (30% margin)

Hope this helps.

Keith