Broker consolidation—like everything else in this life—is change and has numerous opportunities and challenges.
One of the biggest opportunities is the resources available with a large brokerage. Smaller manufacturers—like National Checking Company—get access to a broader group of customers and end-users and participation in food shows and sales meetings that on your own you couldn’t afford. And with more and more broadline distributors utilizing these brokers to be their sales force those benefits are substantial.
Larger brokerages also tend to be more data driven and technologically savvy, enhancing accountability to both the brokerage and vendors.
But with opportunities also come challenges. Large brokerages tend to specialize in center of the plate and categories outside of that are foreign to them. More people and more manufacturers for a brokerage is good, but there is still only so much time in a day and resources tend get spread thin.
Broker hours are divided up and the majority goes to the largest food manufacturers who demand the time and pay by far the most commissions. Even in the nonfoods categories money buys time and the more you have the more you get.
The key for smaller manufacturers is effective management, messaging and marketing. Regardless of the size of the broker, manufacturers really have to effectively and efficiently manage the broker sales team. If you rely on them to do the work for you, you will get pushed aside or completely lost.
Message reinforcement and adding value for all stakeholders is central in NCCO’s mission. Even as new challenges emerge with “Super Brokers” the opportunities presented—both with the brokerages and in the marketplace—are every bit as intriguing.
I was talking with one of sales managers the other day who mentioned that he thinks the emergence of Super Brokers has created an opportunity in the market for smaller startup brokerages with the ability to specialize, especially in the nonfoods category.
What are your thoughts on the evolution of the broker dynamic and where do you think its heading?
Topics: Company News