Be an Exclusive Distributor

Forming Alliance

Maintaining your relationship with the manufacturer is likely to require regular visits in both directions, as well as frequent communications by phone, e-mail and fax of routine business matters. It's easier to keep your relationship exclusive if you start strong. Even if bigger, more experienced competitors want to vie for a piece of your exclusive distributorship, they may be unsuccessful if you have solid personal ties to the manufacturer.

That's been Pacarc's experience with a second company they've begun representing exclusively in the U.S. "We consider the founders friends," Rosen says. In a recent meeting, they learned other companies have approached the manufacturer asking for similar deals. "We were happily surprised that one of the reasons they chose not to work with these other companies was that they enjoyed the relationship with us," he says.

The first exclusive national distributorship probably came not long after the establishment of the first nation, but the practice continues to evolve. Recently, new challenges have been raised by direct selling through the internet, which allows manufacturers and others to sell into an entrepreneur's supposedly exclusive territory, and terrorism-related security procedures that make it harder to import to the U.S. But entrepreneurs continue to chase the big potential that comes with having exclusive rights to sell the world's most wanted products to the world's largest market. "Pacarc started because of some of the cool and unique things we've seen in Japan," says Allard. "Our mission continues to be finding the products we are really passionate about."

Sealing A Sweet Deal
Long distances and cultural divides make international trade challenging much of the time. When you add exclusivity to the mix, it creates nearly insurmountable problems for an already tricky task. For that reason, obtaining an exclusive U.S. distributorship requires more patience, sensitivity and commitment than almost any other business model.

There are countless places to buy honey and just as many brands to choose from. But for Eric Bromberg, 44, founder of New York City importing company BBV LLC, one kind of honey is so distinct that he wanted to have the exclusive rights to sell it in the U.S. The honey comes from a single farm in Mexico, where a seasonally changing variety of flowering plants gives the honey flavors that change several times a year. "It's a unique and extraordinary product, and it tastes entirely different [than] honey from other areas because of the floral makeup of the region," says Bromberg, whose year-old company employs six.

The problem was that the farmer sold most of his crop in Europe and wasn't interested in having a U.S. distribu-tor. Luckily, a member of the farmer's family worked as a chef in a restaurant where Bromberg was a partner. But it still took eight years of talking and convincing to get the exclusive license to sell Blue Ribbon Honey in the U.S. "It's such an extraordinary bond between a farmer and his product that they needed to know we respect what they were making and were going to treat it as lovingly as they have," he explains.

So far, Blue Ribbon Honey is only sold at the Blue Ribbon Bakery Market in New York City and is generating a modest $150,000 in annual sales. Bromberg is looking at wider distribution through retail chains, but he's remaining patient and trying to make sure his business's needs are addressed as thoroughly as those of his Mexican supplier. "The more exclusive the product," he explains, "the more we'll be able to keep our price at a point where it makes it worthwhile to do this."

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This article was originally published in the October 2006 print edition of Entrepreneur with the headline: The One and Only.

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