Hot dogs are the quintessential American sausage. More than 21 million hot dogs were sold in baseball parks alone in 2011. Grocery store sales amounted to $1.7 billion in the U.S. in 2011, according to the National Hot Dog & Sausage Council. Hot dogs are sold through several distribution channels before they reach the final consumer.

Direct to Consumers

A widely used distribution strategy for small businesses is selling directly to the consumer. Hot dogs are sold in many venues. Possibilities include setting up your own hot dog cart for special events such as arts and crafts shows, county fairs, sporting events, school events or on the corner of a busy street at lunch time and shipping the customer gourmet, vegan, organic or kosher hot dogs, along with various mustards, toppings and breads. These could be sold through a website, by mail order or telephone. Starting small doesn't mean your hot dog business has to stay small; you could start with a single hot dog stand and eventually expand to multiple locations or even open a franchise.


Selling to small grocery chains, local chains, restaurants, food carts and food trucks is a better bet than national grocery store chains. Major grocery store chains are a difficult market for a small hot dog producer to break into. These stores charge a slotting fee, a supposedly one-time fee that buys your hot dogs shelf space in the refrigerated cases. However, that fee may not guarantee that your hot dogs remain on the shelves for any specified time period. In addition to a slotting fee, the grocery store may expect you to pay "trade dollars" to advertise your hot dogs in the store, place them in prominent positions within the store or include the hot dogs in the store's weekly newspaper ads.

Through Wholesale Channels

Instead of selling the hot dogs wholesale yourself, you can use a company that does it for you. The wholesaler buys the hot dogs you've produced and then resells them to grocery stores, restaurants and retail outlets. The wholesaler is responsible for delivering the dogs and collecting payment. If the wholesaler doesn't get paid, he still owes you for the hot dogs. The advantages are that your hot dog business doesn't have to have a sales staff and the wholesaler has established customer relationships already in place. The disadvantages include receiving a lower unit price than if you sold your hot dogs directly to the public, since both the wholesaler and the store or restaurant he sells to have to make a profit.

Through Distributor Channels

A distributor earns a commission by selling your hot dogs to venues such as sports arena concessions, restaurant chains, individual restaurants and grocery stores. You have the responsibility of delivering the dogs and collecting the money from the retail outlet. The difference between a wholesaler and distributor is that the wholesaler buys the hot dogs from you, while the distributor sells your hot dogs for you.

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