HN Explorer

Am I wrong or are Adafruit, Makerbot, Sparkfun and others are?

8 points by touny ↗ HN
Recently I have been asking some companies like Adafruit, Makerbot and Sparkfun if I could become a distributor of their products in my country. Amazingly (or not?) I have been sort of rejected from all of them. For example in a trending company such as Adafruit, I asked about the requirements to become a distributor and I told them that I had the intention to develop an online shop to resell their products - They told me to contact them again once I had the online shop up and running and taking orders from customers.

I replied that if all companies asked things like these, there would be no companies at all. Which company would be the first to let me sell their products without having already a prosper business?

Anyway, the stories are similar with the others. With Makerbot for example, they told me that I had to invest $250,000 USD to become an authorised reseller. Please correct me if I am wrong, but don't you think that a company that started like Makerbot should be the first to understand how businesses develop? Please! $250,000 USD? Of course they would let me buy "a few" printers if I wanted (well thanks a lot...) maybe with their permission I could do that!

The less frustrating experience was with Sparkfun, where they told me they "already feel very well represented" in my country. At least this could be understandable since there are probably deals in place with the current distributors, but even so, if somebody comes to me asking to sell my products, it wouldn't matter to me to have another sales representative, but again, maybe that's just me.

I don't pretend to have the truth, but I would be very happy to hear what other people think.

18 comments

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noonespecial
Don't ask to "be a distributor". Ask for a volume discount; and then be prepared to pay for this up front at first. I suspect you might be getting turned down because "being a distributor" often involves them sending you a bunch of product on faith or extended credit terms. They are small operations and may be operating one bad deal away from bankruptcy and be unable to take such a risk.
touny
You are right, volume discount is less risky for any business. Nice way to put it, thank you. But anyway, I sometimes believe that some new companies turn too fast into "small" large inaccessible corporations! It's a good thing to take this in consideration for all startups out there.
CyberFonic
The companies you mention have good international sales from their existing online stores. What are you offering that they cannot easily do?

Saying you want to be a distributor implies that you will have a network of resellers. For that to be attractive you would need to have substantial local inventory. As @noonespecial says, that requires making a substantial investment up front. You can't just say your are a distributor, take orders and then pass them on the the companies you mention. That is of no benefit to them.

As for Makerbot, do you have the resources to support what you plan to sell?

Take a look at Arrow, Farnell, etc and see how they operate. That's what it takes to be a distributor.

touny
In my case, I am hoping to develop an inexistent market in some cases (such as 3d printing). In my country we don't have so many hobbyists for example, but certainly I believe there could be many applications. The market is rather small and I doubt that these companies could develop the markets from abroad. Just a thought though....
serf
Many people become resellers in order to buy product for themselves and friends at a discounted price. This trend is rampant in the car-modification and hotrod cultures of the United States.

Perhaps without a shop they are suspicious of your intentions.

touny
Surely this is a widespread problem, tough one to overcome.
lazylizard
the problem is, after they give you your margin, or cut, or discount, as 'distributor, you buy just 1 item. for yourself.

there are vendors that actually don't care, and anyone can sign up as a reseller. but apparently you asked a few who do.

touny
Same as above, this happens a lot too, you're right.
kjs3
Distributors (or, commonly, a "channel") are generally expected to bring something tangible to the table in the relationship. Sometimes, they have a large book of clients or have access to a market that the supplier can't tap. Often they also take on first tier support, installation, service and/or training. In many cases, they smooth out the suppliers cash flow by pre-booking and/or stocking product locally. A requirement to pre-purchase demo gear and/or have a certain number of employees trained/certified on the products is common.

So, based on what you've said, you don't have a sales pipeline, don't have a sales mechanism (and a web site isn't a particularly interesting one to companies who already sell primarily via the web), aren't willing/able to put in a significant cash investment in the relationship, and haven't mentioned support and training. They probably have a couple of dozen people a month come to them with "I have nothing to offer but why don't you trust your reputation to me, give me a big discount and let's do business together!". Their reaction really shouldn't be surprising.

touny
Maybe I am wrong in my concept of distributor, for me there can be large distributors and smaller ones. Retailers of all sizes (small hobby shops or large hardware depots)
kjs3
There are all sizes of distributors. But that doesn't mean all suppliers make use of all sizes, and regardless of size, they're bringing something of value to the supplier. The small hobby shop, for example, provides hands on assistance that a distant supplier can't. Telling people who sell via web site you want to sell via website isn't particularly compelling in and of itself.
touny
You are right, differentiation with value is what would make my offer stand out.
qq66
These companies are already resellers for the most part. Why not just buy the products directly and compete with them?
touny
I hadn't considered this. Certainly a good idea, maybe I am trying to resell from a reseller which already has a tight margin.
qq66
Keep in mind that to achieve differentiation, Sparkfun/Adafruit etc. do build proprietary products themselves. Mostly breakout boards and other things that require low capital investment but make the components that they resell (Atmel and TI chips, etc) much easier to use for the through-hole hobbyist. If you don't do the same, you'll probably get stomped by them in the long term, but if you can build a market position in a specific country quickly enough, you can get bought by them instead.
touny
Great insights thanks!
SebSigloch
I'm agreeing with "qq66". If you wanna make a real business out of this, you should follow qq66's advice and get yourself the producers on board. They however would wanna see prospected sales pipelines and some forecasts. In addition to that, you might need to agree on fixed sales per year in order to be recognized as a distributor. Alternatively, you could go with a luggage full of money to some small Asian trade fairs..
touny
I agree, good point.