Aussie young guns, Jeremy Liddle, Andrew Cameron and Andrew Maciver started natural health company RioLife back in 2005. In 2010 they were featured as one of BRW’s top emerging companies, and also picked up a Fastest Growing Small Business Award from My Business Awards.
RioLife is now stocked in over 1700 stores including Australian pharmacies and 2/3 of major health food stores and are on the cusp of expanding into New Zealand. From these launches distribution is expected to grow by another 1,000 pharmacy outlets over the next 12 months.
Building a distribution line for a product from scratch is a challenge in its self but then you need to find a way to get them off the shelves. We spoke to Co-Founder Jeremy Liddle to find out exactly what is required in order to achieve success within the distribution industry.
When looking to distribute a product, what should entrepreneurs be looking for?
Something that there is a demand for, when we discovered Acai overseas we saw that there was an established demand in Rio, California and given that the culture and mindset was fairly similar we thought it may work for us as well.
What is the quickest way to grow your distribution & how should entrepreneurs approach retailers or distributors?
Buyers in chains are where you get the big distribution quickly, these guys have a certain criteria with a number of boxes which you need to tick and if you tick them they will put you in. They look for:
- Products with an established demand in the market place
- Backed up and supported through marketing
- Cooperative marketing spend – contributions to their catalogues or install displays
- Certain percentage of sales
- On going support and training
- And obviously the price needs to be right
What is the most important aspect distributors look for in a company/product?
Demand for the product within the market place. Whilst most people think its price, consumers don’t buy on price they buy on value.
What are some things to avoid when dealing with retailers/distributors?
Discount wars, you want to stay clear of discounting wars as much as possible and raise more value in your product than your competitors because the value comes in marketing and getting more product out the door.
Getting your product on the shelves is the first thing in the process, what steps are involved after that?
We have a concept called push and pull; you need to push the products out onto the shelf and then you need to pull them off the shelves by creating a market demand for it through in store displays, sampling, main stream advertising, online, banner advertising, print and pr.
Do you recommend growing organically to be able to handle growth and demand or do you advise getting capital injected?
If you are in a competitive market or industry and you want to grow quick and compete, then capital injection is necessary but if you don’t and want to grow it slowly then you grow organically. It all depends on your goal.
What were some of the challenges you faced throughout your expansion?
Cash flow was constantly an issue. We would get orders of which we had to turn away simply because we could not fulfill them.
If you could do things differently what would you have changed?
I would raise capital and get strategic investors on board and do it big, put the money behind advertising, resources and staffing.
What is one piece of advise you can give other budding entrepreneurs who are looking to distribute their product?
Do your research and make sure you have the right product for the right channel and you’re targeting it to the right market because if you don’t have those three things you don’t really have a business.
Interview by: Alex Pirouz is the founder of RIDC Advisory Pty Ltd. A Business and Sales Advisory firm partnering with Australia’s largest and fastest growing companies to further increase their revenue. Visit www.RIDC.com.au for more detailsSuscribe to the podcast