You only have two options when it comes to getting your brand into the North American market. You either find a distributor (and cross your fingers) or you build up your own direct infrastructure (and cross your fingers). Turns out there’s a third model that gives you the transparency and control of the direct model while still outsourcing all the hassles of distribution.
Time For a Nui Plan
Everything was going great for Nui Organics, a children’s clothing brand whose name means big or important in the native Maori language of New Zealand.
They had big plans for the UK when, out-of-the-blue, their UK distributor threw a wrench into the gears.
“Well, basically, they called us up and said ‘sorry, we’re shutting down the business, here’s your customer list. Good luck.’” said Founder & Lead Designer at Nui Organics, Amanda Searancke. “We didn’t have the same personal relationships that the distributor did, so we had to scramble to establish these connections – and save future orders – and then figure out how to get them our product. It was an unpleasant bump in the road that we didn’t see coming.”
Direct vs. Distributor Model
How can you avoid such disruptions to your business? One option is to invest in your own sales and logistics infrastructure. Known as the Direct Model, you have full control over the entire value chain and gain complete transparency into your customer base. On the downside, it comes with a huge investment and, especially for a small brand, a huge distraction from your core competence of designing, producing and brand building. Dollars and hours get sucked away as you hire local staff, find a warehouse and then figure out American or Canadian laws, import tariffs and currency issues. No thanks, says the small brand, I’ll go with the distributor model.
For key markets, the distributor model has inherent flaws that restrict the control you have over the growth of your brand or, in the worst case, ruin your brand in that market
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