Why Most Margin Conversations With Distributors Fall Flat
Can You Actually Negotiate Distributor Margins?
Watch this tactical breakdown from Shane Lohman as he unpacks real strategies for navigating distributor margin conversations, reverse-engineering shelf pricing, and setting your brand up for long-term scale. This isn’t theory—it’s what works in the field.
Your distributor margin matters—but it all starts with the shelf.
If you aren’t sure what price point your product needs to hit at retail, it’s hard to have productive conversations around margins with your distribution partners.
I see it all the time: brands negotiating with distributors without ever doing the math that actually matters.
They’re debating a few points of margin without understanding the real levers of brand strategy—who they’re selling against, what value they offer, and how their pricing aligns with a realistic path to velocity.
Let’s simplify it:
- Start with the shelf price.
What do you need to be priced at to win in your category? If you’re $3 above an established competitor with no clear value prop, your product won’t move—regardless of your distributor’s margin.
- Work backward to your numbers.
Take that shelf price, subtract retailer margin, and you’ll land at what your distributor needs to sell it for. From there, calculate what you can afford to give them—and what’s left for you.
- Lead the conversation, don’t follow it.
When you approach a distributor with a clear strategy—“Here’s where we need to land, and here’s why”—you gain leverage. You become a brand with a plan, not just another product hoping to get pushed.
This isn’t just a pricing exercise.
It’s how you build credibility, confidence, and partnerships that last.
If you’re working through this now, you’re not alone.
These are the exact kinds of conversations shaping whether brands grow—or stall.
Still navigating the margin conversation?
This video walks you through the real playbook—no fluff, just field-tested strategy for building partnerships that work.
