Centra Foods supplies wholesalers and food service distributors with olive oil (and other non-gmo and organic oils) in bulk. As a result, we get a lot of business questions from companies in this industry.
One thing that is the most commonly asked is from wholesale distributors working with new accounts for oils. They are concerned after they work hard to set up a new supply chain for their customers, they will eventually be backed out of the supply agreement. They want to make sure that if they spend the time to get a customer in place and coordinate deliveries to their customers' facility (and offer them significant savings) that they will be able to keep that customer.
A common fear is that after the first shipment, the customer will research the brand name and go directly to the manufacturer for their orders from that point on. This fear is a legitimate concern. But there are some ways you can avoid this!
3 Ways To Protect Your Company
Here are a few ways you can protect your distribution company to make sure that your customer keeps coming back to you (or only knows about your brand/company to begin with).
- Sell Under Your Private Label Brand
Create a brand that is your own. Design the brand name, labels, and artwork for each item that you are going to sell. This can often be cheaper than you may think, especially for items that use a stick-on label.
- Utilize Hidden or "Blind Shipments"
It may be cheaper to have full pallet orders sent directly from your supplier to your customer. This takes away having inventory shipped to your warehouse, which then is shipped to your customer; you can cut out some cost by utilizing a "direct shipment." Are you concerned about having the order show up with your supplier's paperwork? Many suppliers will allow you to arrange the shipping so that everything on the order paperwork points back to you and your business. This works great in conjunction with a private label brand.
- Have A Non-Compete Agreement Signed
If a supplier knows that you are working with a particular customer, many will sign a non-compete agreement showing that they will not target that customer and will value your partnership. To finalize this agreement, you will have to provide information about the customer you are working with.