Question about importers and distributors

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Shoshi Cooper
Posts: 4
Joined: February 17th, 2015, 4:01 pm

Question about importers and distributors

#1 Post by Shoshi Cooper » April 20th, 2016, 1:38 pm

I work for a small family wine import company (it's my mom, uncle, aunt, and me), importing French wines into California and then reselling them direct to consumer, online (only online). We don't have a store front.

We were just contacted by a distributor, who is also in California, and is interested in buying from us. This is a new, small distributor, and he says that he's just starting (so no there's track record). We've never done a distributor before, so we're not sure how this works.

The distributor appears to also be an importer and retailer, as well as a distributor. He's planning to build a website online. This sounds very similar to what we do, and we're both in the same state, so it's making us a little nervous.

We would really like some advice from others in the business about how to proceed. We would like to find a way to sell into restaurants and liquor stores, but we don't want to jeopardize our current business, selling direct to consumer. What is the chance that this distributor will place our wines online, for direct-to-consumer retail, at a lower price, and try to undercut us? What is the chance that he'll take advantage, get our contacts in France, and then try to import those wines himself and sell them online, retail, at a cheaper price? If we say no, will he just do all of this, anyways?

What are the pitfalls of this process, and how can we keep ourselves from falling into them?
ITB

Richard Leland
Posts: 561
Joined: August 14th, 2009, 2:20 pm
Location: San Francisco

Question about importers and distributors

#2 Post by Richard Leland » April 20th, 2016, 2:40 pm

You make it sound like their business model is the same as yours, so I don't understand what they're bringing to the party and why you need them. If you want to sell to wine shops and restaurants then either hit the street with samples or hire a sales rep to do it for you. If neither of those approaches works for you then try to find a small, established wholesaler who isn't an importer and doesn't sell direct to consumers.
Richard

Jon Higginbotham
Posts: 25
Joined: November 5th, 2015, 3:59 pm

Question about importers and distributors

#3 Post by Jon Higginbotham » April 20th, 2016, 5:06 pm

So although his company is an importer and distributor like you, he needs you because he doesn't have access to the wines/suppliers you do? Then I suppose the risk is him eventually cutting out the middleman (you) and buying direct? My company is also an importer and distributor in some states and we sell to many companies that we consider competitors without much risk or concern, I think it all depends on the relationship you have with them and the relationship you have with your suppliers as well.

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