Everything You Need To Know Before Hiring A Broker For Your Food Business

sales Feb 22, 2023

Everything You Need To Know Before Hiring A Food Broker 

As a food producer, you know the importance of putting out a quality product. So how do you make sure that your products are available to consumers? By hiring a quality food broker! Food brokers are crucial for increasing distribution and making sure people can find your product. However, choosing the right one is important so it's best to have an idea of what they will be doing for you before signing on the dotted line. This guide lays out what to look for when hiring a food broker and what needs to be discussed with potential brokers when you’re interviewing them to make sure they’re the right fit for your company.


What exactly is a food broker and what do they do for you?

First, let’s lay out what exactly a food broker is and isn’t. A food broker’s job is to get your product sold into stores. This means they’ll be connecting with wholesale accounts and distributors to sell and negotiate on your behalf. Look at this almost like a part time sales person who represents your products. Once a broker has successfully sold your product into a store, you’re then responsible for getting the product delivered to the store. This is one of the main differences between a food broker and a food distributor. A food distributor will buy the product directly from you, take ownership of it and then sell it into stores and distribute it to those stores as well. Both have pros and cons and as a new or emerging food or beverage business, both can be key to your success.

Food brokers do more than just get your products listed in stores though. They can also help make sure your product moves off of shelves too. They can work with you to set up and manage promotions with stores, they can ensure you have the placement you’re supposed to have on store shelves and help set up demos and other in store marketing activities. It’s best to work with a food broker as a part of your full team so you can work together to accomplish the shared goal you both have which is selling more of your product.


Benefits of Working with a Food Broker

Hiring a food broker can make growing your food business easier and faster. One of the main reasons for this is because a food broker already has the relationships with stores and distributors to make selling happen faster. So much of selling is based on relationships and a food broker has often times worked with the stores they sell to for years, meaning getting that ‘yes’ to listing your product becomes so much easier.

Another benefit is that the broker knows what certain stores require for new products to be listed in the store and so they can help you make sure you meet those requirements before presenting the product. Not only does it make getting a yes a whole lot easier, it can also save you time and energy by not trying to present something to stores that they just wouldn’t be interested in carrying. For example, assume you are trying to sell your product to a wholesale account and want to offer them 22% margin, which you feel is fair for you, the consumer and the store. But, let’s assume the store always needs to make 38% margin to even consider carrying a product. Unless you know this already (which a food broker would), you won’t have a chance of getting listed.

But, if you knew this in advance, you could see if you could do something to make the margins work, or be prepared to negotiate based on giving the store something else they may be interested in like demos, promotions or display support. And here again we get to a point where unless you know what they want (which a food broker would know), you don’t know what to offer them in negotiations to have them say yes to carrying your product.

Another key reason to hire a food broker is you’re hiring a sales expert to grow your business. Unless you’re a sales expert yourself or have the time and willingness to train to be one, you’re going to be spending far more time and energy for likely less results trying to sell yourself. Just like you want to make sure your suppliers provide you the best products and your co manufacturers know how to manufacture your product, so too do you want to make sure you have the best person selling your product for you.


If you’re wondering if the benefits of hiring a food broker outweigh the investment, ask yourself these questions:

Hiring a food broker is one of the best ways to make growth come easier for your food business because you’re able to leverage their expertise and free up your time to focus on other areas of the business.


Make Sure You’re Ready to Work with a Food Broker

Working with a food broker can be a great choice regardless of what stage of business you’re in. There are some considerations to keep in mind before hiring a food broker though. First, you need to make sure you have room with your margins to hire someone to help sell. Second, food brokers want to represent companies they believe in and that they believe will make them money. That means you need a strong brand that can get wholesale accounts and consumers excited and motivated to buy. If your product does not have a clear or compelling brand you run the risk of brokers not wanting to carry your product because they can see they’ll have difficulty selling the product into stores and that stores will have trouble moving the product from store shelves.


Costs Associated with Hiring a Food Broker

Hiring a food broker is less expensive than hiring a part time sales representative but there are costs associated with it. Different brokers will have different ways of charging for their services. Some brokers will charge a percentage of sales they secure and others will charge a monthly retainer amount to sell your product in addition to a percentage of sales. Percentage of fee amounts range from 3%-10% and typically have a higher percentage for opening orders with a new store and a lower percentage for repeat orders from a store. Monthly retainers can range widely depending on where you’re located and where you want your product listed.

While you might not want to give away margins on your product, if this person can help you get into stores you might not have gotten into in the first place, can save you time so you can work on other areas of the business and can save you energy not wasting it on something you don’t enjoy in your business, the payoff can absolutely be worth the investment.


How to Find and Hire the Right Food Broker

Finding the right broker to represent your business is key for the relationship to work. You want to hire someone who ideally has the same values as you and of course, will best represent your product. Here are 8 questions to ask food brokers you’re interviewing.

What to ask when interviewing food brokers:

Hiring a food broker is a great way to find new wholesale accounts for your business and get your product into more people’s homes. With so many brokers out there, it can be hard to know where to start looking. That’s why we created a list of certified food brokers and food distributors that you can work with today. You’ll have immediate access to a list of verified partners so you can start interviewing the right partners for you & start growing your business faster. Working with a food broker can help you save time, money and energy so you can grow your food business even faster and with more success.


Get your list of verified food brokers and food distributors here.

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