If you are new to the consumer goods industry, you may not be familiar with outsourced sales and marketing agencies, commonly called brokers.  These agencies typically represent a portfolio of brands within a contracted territory, with the objective of growing sales and distribution through the following activities.

  • Wholesale and Retail Chain headquarter sales calls
  • Retail sales, merchandising, resets, item “cut-ins”
  • Marketing analytics, category management, space planning
  • Demand planning
  • Order processing
  • Trade promotion management

An experienced broker company has extensive customer contacts and a deep understanding of their needs.  From the customer’s perspective, an effective broker can:

  • Help maximize their time by managing several brands through a single touch-point
  • Anticipate needs, concerns and solutions, making communication very efficient
  • Provide insights through data analysis and retail audits
  • Execute plans at store level

Brokers come in all shapes, sizes and specialties.  For example, some agencies specialize in a product category, such as confection items, while others span nearly every consumer goods category.  You will also find some brokers that focus on a particular customer base such as the Dollar channel, and others that cover many classes of trade across the country.  The size of these companies ranges from one person to several thousand employees.

When choosing a broker, it is all about fit.  A great broker relationship starts with understanding your needs and matching them up with agencies that excel in servicing them.  Some factors that manufacturers commonly consider when determining fit are:

  • What size broker will best handle the business and give me the time and attention needed – National, regional or smaller “local” brokers?
  • Does the broker align to my sales management structure – territory alignment, channel alignment, other?
  • What services does the broker offer that would complement my current resources – retail reporting technology, analytics, consulting/brand strategy, etc?
  • What is the cost to work with this broker – commission rate and fee-based services?
  • Does the broker represent competitive and/or complementary clients in its portfolio?

Once you have found the best fit, create a contract that assigns the broker an exclusive territory.  While the term “exclusive” may concern you, keep in mind that most brokerage agreements have a 30 – 60 day out clause.  Be specific about the territory within the contract to avoid confusion later.  Once the contract is finalized, the broker is officially an extension of your organization.  Quickly follow up with sales training, marketing materials and samples so they can hit the ground running.