Marketing Aquaculture Products — 1

Dealing with Brokers
and Distributors
Brokers and distributors get your product into
channels. A channel in the established foodretail
system is a business segment or grouping.
Th ere are fi ve to seven established retail
market channels. Th ere are four well-established
food channels serviced by brokers: retail
stores, club stores, food services, and C-stores.
Direct-to consumer and Internet direct-marketing
also can be considered channels. Some
see these as alternative channels, but these are
producer channels not covered by brokers.
Brokers and distributors usually take 1% to 5%
of what they get paid by their clients. Th is may
not seem so onerous when one considers that
brokers are highly professional extensions of
your sales staff that have solid connections to
immediately market your product.
Th is is a complicated marketing area. Th ere
are contractual demands for your product,
and there may be convoluted pricing systems.
Brokers and distributers make their money on
volume, so they tend to think in terms of volume
of product in the most effi ciently handled
units; the entire distribution value-chain exists
on very thin margins. Th ey like 100% fi ll rates
in units that are effi cient for them to handle
(no partial orders, or partial orders packed
for immediate delivery bundled with other
partial orders in effi cient units). Big brokers
and distributers talk in a complex terminology.
For example, when entering into conversations
with brokers, distributors or retail
(grocery store) buyers, it is good to have some
understanding of table stakes, terms, shelter
or program money, procurement money, and
bill-backs.
For smaller producers, there is an emerging
segment of aggregators. Th ese are specialty
brokers, mostly in the ever broadening organic
and buy-local sectors. In the city of
Marketing Aquaculture Products — 29