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Everyone talks about how to find a broker. Hardly anyone talks about how to manage one. In my years of building CPG brands and working across every link in the distribution chain, I’ve seen firsthand that your broker relationship can make—or quietly break—your business. Whether you’re just starting out or managing a national rollout, understanding how to structure a good broker agreement and keep your brokers truly accountable is essential for sustainable success.

Why Broker Accountability Matters More Than You Think

Brokers are not employees, but they’re also not purely external either. They sit in that gray zone—representing your product, managing retailer relationships, pitching buyers, and guiding placement. But here’s the hard truth: many brokers are stretched thin. If you don’t put structure and accountability in place from day one, your product will get deprioritized behind louder clients with better systems. A good agreement and solid management practices prevent you from being forgotten.

1. What Should a Fair Broker Agreement Include?

Let’s start with the nuts and bolts. A good broker agreement should set expectations clearly for both sides and reflect the work involved. Here’s what every solid agreement should contain:

Scope of Work

• Retailers and regions covered
• Types of accounts (independent, regional chains, national)
• In-store support responsibilities (e.g., resets, merchandising)
• Communication expectations (e.g., call summaries, meeting notes)

Commission Structure

A fair rate depends on the complexity of the product, the channel, and the broker’s involvement. Here’s a general guide:

• 10–12% for natural and specialty channels
• 7–10% for conventional grocery
• 3–5% for foodservice or club store brokers
• Tiered commissions for opening vs. managing accounts
• Optional: lower rate for existing accounts, higher for new distribution

Payment Terms

• Commission paid based on actual shipment or invoice date (not PO date)
• Monthly reporting cycle
• Net 30 or Net 45 after verified sales

Territory and Exclusivity

• Define whether the broker has exclusive rights in the territory
• Include carve-outs if you have house accounts or active direct sales

Performance Reviews and Exit Terms

• Quarterly performance reviews
• Right to terminate with 30–60 days notice if KPIs not met
• Post-termination commission tail (usually 6 months for opened accounts)

2. How Often Should I Expect Broker Updates?

The right cadence depends on your growth stage, but here’s what I recommend:

• Weekly check-ins during the first 3 months of onboarding
• Bi-weekly updates once things are humming
• Monthly written reports with call logs, sales performance, open opportunities, and buyer feedback

You want to build a habit where your broker knows you’re expecting visibility. Set up a shared tracker (I like Google Sheets or Notion) to log retailer calls, reset schedules, objections from buyers, and any pending action items.

3. What KPIs Should I Use to Measure Broker Success?

Without clear performance metrics, it’s too easy to assume a broker is “doing stuff.” Here are the KPIs I track religiously:

Distribution KPIs

• New doors opened per month
• Reset participation & planogram wins
• Speed to shelf after authorization

Sales Velocity KPIs

• Units per store per week (UPSPW)
• Retailer reorder frequency
• Stockout rate or fill rate (if managed)

Engagement KPIs

• Number of buyer meetings or calls
• Tradeshow support, demos, or events
• Accuracy and timeliness of reports

Set a baseline, and then review every 60–90 days. This gives you both leverage and clarity when performance starts to drift.

4. How to Replace a Non-Performing Broker Without Burning Bridges

This is the part no one talks about. Here’s the playbook I follow when it’s time to move on from a broker—but you still want to keep the peace (and protect your reputation):

Step 1: Diagnose First, Don’t Assume

Are they truly underperforming, or are you not providing the support they need (samples, promo budget, UPC data)? Review your mutual obligations before placing blame.

Step 2: Have a Direct (but Constructive) Conversation

Set up a formal performance review. Use your KPI tracker. Frame it as: “Here’s what we agreed on, here’s where we are, let’s talk about how to close that gap.”

Step 3: Issue a Written Warning or Probation Period

Give them 30–60 days to meet specific targets. Outline exactly what will happen if they don’t improve.

Step 4: Be Transparent During Termination

Stick to the contract. Give formal notice in writing. Thank them for their contribution. Don’t vent. Don’t gossip in the trade. If you handle this well, you’ll be remembered as a pro, not a problem.

Step 5: Protect Transition Accounts

• Communicate to retailers clearly
• Introduce the new rep or broker in person, if possible
• Pay any commission owed promptly

Bonus: Red Flags When Hiring Brokers

Prevention is better than cure. Here are a few red flags I’ve learned to watch for before signing with a new broker:

• They represent more than 30 brands and can’t name 5 SKUs from each
• They talk more about “relationships” than results
• No CRM system or reporting infrastructure
• Unclear about who is responsible for resets or merchandising
• They want full exclusivity without any performance targets

If your gut says they’re all pitch and no follow-through, trust that instinct.

Final Thoughts: A Broker is a Partner, Not a Savior

It’s easy to fall into the trap of thinking a broker will magically open doors, grow your brand, and hand you national accounts. But that’s not how this works. A great broker is a multiplier—but only if you have the product, support, and systems to make it work. Structure your agreement right, manage them like a pro, and don’t be afraid to walk away if it’s not working.

Need a template broker agreement or sample KPI tracker? Drop me a message and I’ll send one over.