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  • #983480
    Rod87
    Member
    • Total posts: 6
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    Hi all.

    Firstly I would like to say a huge thank you to everyone that contributes to this forum. It is an amazing source of information and knowledge.
    I am a new member to Flying Solo although I have been using it for months doing my research into starting my own business.
    I have also bought the “Flying Solo – how to go it alone in business” book which I am currently reading.

    So a bit about myself. I work full time as a Small Business Banking Specialist for one of our Big Four Banks in Sydney. Working with small business owners on a daily basis and helping them with their banking needs has given me great insight on the challenges they go through but also the great rewards they can achieve. I have also made many connections in various industries.

    This has triggered me to start researching into setting up my own business, not so much for the fact of being my own boss but more for achieving my own goals, setting my own targets and taking the skills I have gained from the Banking sector towards my own business and, hopefully one day when my business grows, my own staff.
    After doing lots of thinking on what I would like to do I realised that what drives me are innovative ideas and products and I would do this by importing products from overseas which are unique to the Australian market.

    I have done many hours of research into products that I have come across which are not yet marketed/sold in Australia and one of them is a particular outdoor equipment made in the US (not health or food related and would be ready for immediate sale in stores – assuming that no relabelling is required to meet standards, etc).

    I have contacted the manufacturer who was interested in my proposal and we have set up a Skype call to discuss in more detail in the coming days. My goal is to become the sole distributor of this product in Australia.

    During the initial phase my aim is to maintain my day job and gradually move into the business by knocking off one or two days per week to focus on the distribution of the product until it is viable for me to do it full time.

    I have done a rough business plan but was wondering what others would advise me to propose during our initial contact in order to gain distributor rights for this product as I do not have experience in this market (although I have extensive sales experience)?
    What, in your view, would the manufacturer be looking for in a prospective distributor?

    I believe that, from their point of view, they may not have much to lose as their main market focus will be the US and agreeing on selling their product to someone willing to take on the risks and financial investments to distribute their product in a foreign market would mean extra sales. I do understand that they will be concerned about brand reputation risk and this is something I will address.
    My fear is that due to my lack of experience they may be reluctant to agree on sole distributor rights and this is something I want to overcome by delving into my sales background and management skills and also my personal passion and interest in that market.

    Also, the product would be targeted to retail stores and would retail between $100-$120 per unit. What should I expect to pay for each unit from the manufacturer to be viable to sell to retail stores, taking into account shipping, taxes, etc? What should I aim to sell it for if the shelf price is $120?

    What sort of initial investment would be recommended to start with (I have some savings but I am not sure if what I have would suffice)?

    I will be registering my own company (I am currently a sole trader) and taking out liability insurance, etc.

    Am I missing anything?

    I have emailed Global Logistics (thanks for the recommendations on previous posts) to obtain a quote on shipping and customs costs for an initial delivery which I am waiting for a reply.

    I would appreciate your thoughts and feedback!

    Many thanks,

    Rod

    #1142542
    MH08
    Member
    • Total posts: 284
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    Congratulations on your new venture and welcome as a new member!

    Your business sounds very exciting, there are a few things to consider;

    • If theres any glass in the product, I think there are now strict guidelines on how its tempered properly (remember the Current Affairs a while back?)
    • This will depend on the relationship with your manufacturer in the US; All distribution rights/licences are purchased (if their serious), also make sure there are non-compete orders inside and that the licence is has options on top of a 5 year licence.
    • If you don’t have an extended licence, like a 2 year licence? There’s a good chance that you could be doing the work for him, meaning you could work hard for 2 years, sell to Bunnings and they don’t renew your licence.
    • Your order may be a 20 foot container at first, if you understand small businesses you’ll know a cost like that per month by working one or two days a week would almost send the business broke on paper without the ability to finance it.

    The distribution game is an excellent game with huge rewards (I own a distribution company) but you need serious tenacity, your business will be under attack everyday, just as you work 1 or 2 days a week other companies have reps that work 6 days 10 hours a day plus experience.

    Also make sure the company structure is excellent and works for you in any event.

    Cheers,

    #1142543
    Cat – GLC
    Member
    • Total posts: 440
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    Hi Rod,

    Will give you a call today as we have also jumped through a few hoops in becoming a distributor of a product from the US so may be able to give you some tips as well.

    Cheers

    Cat :)

    #1142544
    Peter – FS Administrator
    Member
    • Total posts: 1,889
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    Rod87, post: 163019 wrote:
    Firstly I would like to say a huge thank you to everyone that contributes to this forum. It is an amazing source of information and knowledge.
    I am a new member to Flying Solo although I have been using it for months doing my research into starting my own business.
    I have also bought the “Flying Solo – how to go it alone in business” book which I am currently reading.

    Hi Rod – thanks so much for jumping in and joining us – it’s certainly amazing how generous contributors are around here :) As others have said it sounds like you’re on the start of a great journey. Thanks also for reading the book and all the very best with the business.
    Cheers
    Peter and the other FSers

    #1142545
    Rod87
    Member
    • Total posts: 6
    Up
    0
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    MH08, post: 163024 wrote:
    • This will depend on the relationship with your manufacturer in the US; All distribution rights/licences are purchased (if their serious), also make sure there are non-compete orders inside and that the licence is has options on top of a 5 year licence.
    • If you don’t have an extended licence, like a 2 year licence? There’s a good chance that you could be doing the work for him, meaning you could work hard for 2 years, sell to Bunnings and they don’t renew your licence.
    • Your order may be a 20 foot container at first, if you understand small businesses you’ll know a cost like that per month by working one or two days a week would almost send the business broke on paper without the ability to finance it.

    The distribution game is an excellent game with huge rewards (I own a distribution company) but you need serious tenacity, your business will be under attack everyday, just as you work 1 or 2 days a week other companies have reps that work 6 days 10 hours a day plus experience.

    Thank you so much MH08 for the info. The financial side and also the time devoted to the business are really my main concerns at the moment. It seems very daunting moving from a secure wage to the unknown of owning a business! But with risks come great rewards right?

    Rod

    #1142546
    Rod87
    Member
    • Total posts: 6
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    Cat – GLC, post: 163032 wrote:
    Hi Rod,

    Will give you a call today as we have also jumped through a few hoops in becoming a distributor of a product from the US so may be able to give you some tips as well.

    Cheers

    Cat :)

    Cat,
    Thank you for your time over the phone today.
    You were extremely helpful and genuine in your advice and I will be definitely using your services once I reach that stage in my future business!

    I look forward to receiving your email with more information on freight/shipping.

    Rod

    #1142547
    gtrain
    Member
    • Total posts: 1
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    Hi Rod & Cat,

    I’m looking to do exactly the same thing for a range of gardening products.
    The company in the US has been very responsive to deal with so far however we have not yet discussed the finer details of any agreements.

    I am reluctant to over commit in the early stages and would prefer to bring in a small shipment to test the market. I am however concerned that if i don’t enter into an exclusive distribution agreement then my hard work initially to bring the product in and market it could be undone.

    I’ve been given advice to start lean and i think theres merit in this.
    It would be great to pick up with you guys to learn more and get some feedback.

    Cheers,

    #1142548
    Shipporter
    Member
    • Total posts: 22
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    hi Rod87 & gtrain,

    If you’re wanting to test the waters with some products without committing to full containers, our Sea Courier service may be useful.

    See our instant freight calculator here; http://www.shipporter.com/shoppers/shipping-calculator

    #1142549
    tim_davies
    Member
    • Total posts: 54
    Up
    0
    ::
    Rod87, post: 163019 wrote:
    Hi all.

    Firstly I would like to say a huge thank you to everyone that contributes to this forum. It is an amazing source of information and knowledge.
    I am a new member to Flying Solo although I have been using it for months doing my research into starting my own business.
    I have also bought the “Flying Solo – how to go it alone in business” book which I am currently reading.

    So a bit about myself. I work full time as a Small Business Banking Specialist for one of our Big Four Banks in Sydney. Working with small business owners on a daily basis and helping them with their banking needs has given me great insight on the challenges they go through but also the great rewards they can achieve. I have also made many connections in various industries.

    This has triggered me to start researching into setting up my own business, not so much for the fact of being my own boss but more for achieving my own goals, setting my own targets and taking the skills I have gained from the Banking sector towards my own business and, hopefully one day when my business grows, my own staff.
    After doing lots of thinking on what I would like to do I realised that what drives me are innovative ideas and products and I would do this by importing products from overseas which are unique to the Australian market.

    I have done many hours of research into products that I have come across which are not yet marketed/sold in Australia and one of them is a particular outdoor equipment made in the US (not health or food related and would be ready for immediate sale in stores – assuming that no relabelling is required to meet standards, etc).

    I have contacted the manufacturer who was interested in my proposal and we have set up a Skype call to discuss in more detail in the coming days. My goal is to become the sole distributor of this product in Australia.

    During the initial phase my aim is to maintain my day job and gradually move into the business by knocking off one or two days per week to focus on the distribution of the product until it is viable for me to do it full time.

    I have done a rough business plan but was wondering what others would advise me to propose during our initial contact in order to gain distributor rights for this product as I do not have experience in this market (although I have extensive sales experience)?
    What, in your view, would the manufacturer be looking for in a prospective distributor?

    I believe that, from their point of view, they may not have much to lose as their main market focus will be the US and agreeing on selling their product to someone willing to take on the risks and financial investments to distribute their product in a foreign market would mean extra sales. I do understand that they will be concerned about brand reputation risk and this is something I will address.
    My fear is that due to my lack of experience they may be reluctant to agree on sole distributor rights and this is something I want to overcome by delving into my sales background and management skills and also my personal passion and interest in that market.

    Also, the product would be targeted to retail stores and would retail between $100-$120 per unit. What should I expect to pay for each unit from the manufacturer to be viable to sell to retail stores, taking into account shipping, taxes, etc? What should I aim to sell it for if the shelf price is $120?

    What sort of initial investment would be recommended to start with (I have some savings but I am not sure if what I have would suffice)?

    I will be registering my own company (I am currently a sole trader) and taking out liability insurance, etc.

    Am I missing anything?

    I have emailed Global Logistics (thanks for the recommendations on previous posts) to obtain a quote on shipping and customs costs for an initial delivery which I am waiting for a reply.

    I would appreciate your thoughts and feedback!

    Many thanks,

    Rod

    How did you end up going with this Rod? I was going to drop my two cents in, but guess you’ve already sorted some more things out?

    How did you do with exclusivity? Margins? Landed costs? etc
    Do you have a plan to break into majors?

    Best wishes.
    Tim

    #1142550
    Tony Manto
    Participant
    • Total posts: 581
    Up
    0
    ::
    Rod87, post: 163019 wrote:
    Hi all.

    Firstly I would like to say a huge thank you to everyone that contributes to this forum. It is an amazing source of information and knowledge.
    I am a new member to Flying Solo although I have been using it for months doing my research into starting my own business.
    I have also bought the “Flying Solo – how to go it alone in business” book which I am currently reading.

    So a bit about myself. I work full time as a Small Business Banking Specialist for one of our Big Four Banks in Sydney. Working with small business owners on a daily basis and helping them with their banking needs has given me great insight on the challenges they go through but also the great rewards they can achieve. I have also made many connections in various industries.

    This has triggered me to start researching into setting up my own business, not so much for the fact of being my own boss but more for achieving my own goals, setting my own targets and taking the skills I have gained from the Banking sector towards my own business and, hopefully one day when my business grows, my own staff.
    After doing lots of thinking on what I would like to do I realised that what drives me are innovative ideas and products and I would do this by importing products from overseas which are unique to the Australian market.

    I have done many hours of research into products that I have come across which are not yet marketed/sold in Australia and one of them is a particular outdoor equipment made in the US (not health or food related and would be ready for immediate sale in stores – assuming that no relabelling is required to meet standards, etc).

    I have contacted the manufacturer who was interested in my proposal and we have set up a Skype call to discuss in more detail in the coming days. My goal is to become the sole distributor of this product in Australia.

    During the initial phase my aim is to maintain my day job and gradually move into the business by knocking off one or two days per week to focus on the distribution of the product until it is viable for me to do it full time.

    I have done a rough business plan but was wondering what others would advise me to propose during our initial contact in order to gain distributor rights for this product as I do not have experience in this market (although I have extensive sales experience)?
    What, in your view, would the manufacturer be looking for in a prospective distributor?

    I believe that, from their point of view, they may not have much to lose as their main market focus will be the US and agreeing on selling their product to someone willing to take on the risks and financial investments to distribute their product in a foreign market would mean extra sales. I do understand that they will be concerned about brand reputation risk and this is something I will address.
    My fear is that due to my lack of experience they may be reluctant to agree on sole distributor rights and this is something I want to overcome by delving into my sales background and management skills and also my personal passion and interest in that market.

    Also, the product would be targeted to retail stores and would retail between $100-$120 per unit. What should I expect to pay for each unit from the manufacturer to be viable to sell to retail stores, taking into account shipping, taxes, etc? What should I aim to sell it for if the shelf price is $120?

    What sort of initial investment would be recommended to start with (I have some savings but I am not sure if what I have would suffice)?

    I will be registering my own company (I am currently a sole trader) and taking out liability insurance, etc.

    Am I missing anything?

    I have emailed Global Logistics (thanks for the recommendations on previous posts) to obtain a quote on shipping and customs costs for an initial delivery which I am waiting for a reply.

    I would appreciate your thoughts and feedback!

    Many thanks,

    Rod

    Hi Rod, here are my concerns:

    My fear is that due to my lack of experience they may be reluctant to agree on sole distributor rights and this is something I want to overcome by delving into my sales background and management skills and also my personal passion and interest in that market.

    I doubt you will get sole distributor. I would not worry at this point as if someone else wanted this product range they would already have it…

    Also, the product would be targeted to retail stores and would retail between $100-$120 per unit. What should I expect to pay for each unit from the manufacturer to be viable to sell to retail stores, taking into account shipping, taxes, etc? What should I aim to sell it for if the shelf price is $120?

    A very raw formula is 30% on product, 30% for distribution and 30% for profit. In other words take the end price an divide it by 3. That should be your cost.

    WARNING This is a very raw formula!!!

    Tony Manto
    Strategy Specialist
    [email protected]
    0400 902 717

    #1142551
    Rod87
    Member
    • Total posts: 6
    Up
    0
    ::
    tim_davies, post: 169595 wrote:
    How did you end up going with this Rod? I was going to drop my two cents in, but guess you’ve already sorted some more things out?

    How did you do with exclusivity? Margins? Landed costs? etc
    Do you have a plan to break into majors?

    Best wishes.
    Tim

    Hi Tim,

    I would really love to hear your two cents!! (any advice or pointers are always useful, even if it is to open my eyes to things I have not yet considered)

    This will be a boring post as my progress has been a little stagnate.
    As the product that I am seeking to distribute is only in the initial manufacturing stages I have not yet obtained solid information. This is actually good for me because it has given me more time to get my head around it and do more extensive research.

    I will update this thread once I have more info and have made some more progress.
    Thanks for your interest and, as I said, please share your two cents

    Rod

    #1142552
    Rod87
    Member
    • Total posts: 6
    Up
    0
    ::
    gtrain, post: 167335 wrote:
    Hi Rod & Cat,

    I’m looking to do exactly the same thing for a range of gardening products.
    The company in the US has been very responsive to deal with so far however we have not yet discussed the finer details of any agreements.

    I am reluctant to over commit in the early stages and would prefer to bring in a small shipment to test the market. I am however concerned that if i don’t enter into an exclusive distribution agreement then my hard work initially to bring the product in and market it could be undone.

    I’ve been given advice to start lean and i think theres merit in this.
    It would be great to pick up with you guys to learn more and get some feedback.

    Cheers,

    Hi gtrain,

    I was wondering if you’ve had more progress with your product?
    Please feel free to PM me to share your experience!

    Cheers,
    Rod

    #1142553
    Rod87
    Member
    • Total posts: 6
    Up
    0
    ::
    Tony Manto, post: 171568 wrote:
    Hi Rod, here are my concerns:

    My fear is that due to my lack of experience they may be reluctant to agree on sole distributor rights and this is something I want to overcome by delving into my sales background and management skills and also my personal passion and interest in that market.

    I doubt you will get sole distributor. I would not worry at this point as if someone else wanted this product range they would already have it…

    Also, the product would be targeted to retail stores and would retail between $100-$120 per unit. What should I expect to pay for each unit from the manufacturer to be viable to sell to retail stores, taking into account shipping, taxes, etc? What should I aim to sell it for if the shelf price is $120?

    A very raw formula is 30% on product, 30% for distribution and 30% for profit. In other words take the end price an divide it by 3. That should be your cost.

    WARNING This is a very raw formula!!!

    Tony Manto
    Strategy Specialist
    [email protected]
    0400 902 717

    Hi Tony,

    Thanks for your tips!!

    It is very daunting to take a risk in introducing a new product without knowing that I would have sole rights to it if it in fact does become successful. How do you suggest I approach this? The product is actually a new invention to improve an existing product and it is not even being sold as yet because they have only just started production so this is why no one is currently selling it.

    Thanks for the cost formula also, it at least gives me something to work from.

    Cheers,
    Rod

    #1142554
    MH08
    Member
    • Total posts: 284
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    Hi Rod,

    Sound’s very risky in the sense that it hasn’t been created or sold in the country of origin? If this is true, then it’s a huge red flag with a stop sign, flashing lights plus bells n whistles.

    Order 2 of the stock and organise a visit to the large retail chains and see what they think, one my even want it exclusive sales and marketing rights just for themselves.

    Then if anything were to go wrong, make sure you ask the large retail companies what there ‘job lot’ (how ever it’s spelt) criteria is (I assume you have the product tested to AUS standards by now) then how you can push product through. This essentially means if you have product that you can’t sell at the price you were hoping for, then you can apply for a job lot, make a loss on yourself and they will sell it a at a discount to offer more product or service to their own customers.

    Large retail chains have this system in place to take the excess stock when smaller companies wind up and the adminstrators/receives need to sell stock/assets quickly. Excellent way they make a chunk of change to wash their cars ;)

    So first thing, get some of the stock here, negotiate the price as low as possible because it’s a new product that is significant risk no matter how excited and good it is. If they tell you “sorry we want this price”, bluff them and let them know they won’t get better, if they do. Let someone else import it and see what happens to the product. It’s better to duplicate their business and do it better whilst they bear the risk of marketing a new product.

    But first prepare yourself to see if the product actually works and try and get as much information as possible about it, images, CAD drawings, odd parts that cannot be purchased here, maintainence costs, life time expetancy etc.

    Then if all goes well, you can still keep your job. Get the container sent to a 3PL (third party logistics) company, pay the $3 – $5 a pallet per week or $50 a pallet to be courier/carted from there own warehouse, they will store it, catergorise it, maintain it and ship/courier it for you without you need to see the product ever. Unless you wanted to then just drive to the warehouse.

    3PL’s makes life very easy, but make sure you apply this into your costs. I do this, I move around 2 containers a year in product, I’ve never seen it and all it takes is a few phone calls and around 4 pallets a week are carted out.

    Hope it helps and grammars crap because it’s late. Cheers.

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