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?