What California Suppliers Should Consider Before Choosing a New Distributor

As the dust settles from recent shifts in California distribution—particularly for suppliers who were formerly working with RNDC—it’s decision time. Your next move is critical, especially in a market as complex and competitive as California.

Before signing with a new distributor, it’s important to take a step back and strategically evaluate your options. While some opportunities may look promising on the surface, the details matter. Here's what every small to mid-sized supplier should be thinking about:

1. The Big Distributors Are Focused Elsewhere

The top three distributors recently took on dozens of $50M+ brands, marking a seismic shift in portfolio priorities. Here’s what that means for you:

• Attention is limited. Smaller suppliers (think sub-$5M in revenue) are unlikely to get airtime with portfolio managers or sales reps.
  
  
• Placements may be at risk. If your product isn’t a top-tier revenue driver, it could be deprioritized or even replaced.
  
  
• Access is narrowing. Getting visibility—or even basic communication—with decision-makers may become increasingly difficult.

Bottom line: If you're not one of their major suppliers, you may be left in the dark.

2. New and Smaller Distributors Are Entering the Scene

Several new players are jumping into the California market, hoping to capitalize on the moment. While some may offer agility and enthusiasm, proceed with caution.

Compliance:

Make sure the distributor is actually purchasing your product—not just moving paperwork. Consignment is illegal in California. If you’re caught participating, you risk significant fines and regulatory action.

Payment:

If you don’t get paid after your first shipment, do not send a second. No matter how promising the relationship seems, payment history is everything.

Contracts:

Read every clause and ensure you have a clear exit strategy. If you’re not getting paid or promises aren’t being executed, you need to be able to walk away without penalty. 

3. Infrastructure & Experience Matter More Than Ever

Distribution is more than moving cases—it’s managing thousands of moving pieces every day. Evaluate your potential partner’s:

• Technology: Do they have platforms for real-time account management, shipment tracking, and supplier visibility?
  
  
• Operational Know-How: Do they understand taxes, reporting, licensing, delivery windows, and customer service?
  
  
• Staffing: Who’s supporting your brand—an experienced team, or one person juggling 40 tasks?

Being a distributor is hard. Choose a partner who knows how to do the hard stuff well.

Final Thought: Ask the Hard Questions

This is your business. Your brand. Your momentum. You owe it to yourself to choose a distributor that aligns with your goals, protects your compliance, and actually delivers value.

At LibDib, we’ve built our model with transparency, compliance, and technology at the core. Whether you work with us or not, we’re here to help suppliers make informed, smart decisions in today’s ever-shifting landscape.