5 Biggest Challenges Of Wine, Beer and Spirits Distribution Business
What are the biggest challenges that Wine, Beer and Spirits Distributors face on daily basis?
1. Building A Wine Portfolio:
Lot of times, we assume and think that buying is easy. But, buying can be as important as selling. Building a wine portfolio that generates profit, and helps your sales team sell with ease is a big challenge.
Big brands do not want to go with a small wine distributor and boutique brands are not what retailers will buy easily.
Some times it is true that a couple of wine brands can steer you towards growth. Learn How to Build A Wine Portfolio that helps you grow profitably and sustain the business.
2. Sales Team:
Hiring is one of the biggest challenges that a new wine distributor or even an old one faces. Lot of wine companies would want to hire the sales team on a commission basis and that does not bring a strong commitment from the sales team. The main reason is that sales people do not make enough money in selling a new wine portfolio, they need good brands to help them get more sales and again it comes back to building a wine portfolio that is also a good sell.
If your wines are NOT moving, your sales reps will leave eventually as they need to make money. Thus your focus should not only be in making sure your wine distribution business is profitable but also that your sales reps are hitting their numbers. If they are happy, they will stay. If they stay, your retail accounts will get good service. If your retail accounts get good service, they will give you a chance and buy your 'unknown' brands.
3. Accounts Receivable:
AR has become a problem for wine distributors. In their start up months, many owners will surely face the heat and do 'deals' and give better terms to their buyers. This results in bad AR management and also affects your reputation. The retail community will soon realize that you are offering great terms and that you will do anything to get a sale. Beware:this will hit you hard on your face. Always grow on the right principles -- it is vital.
Your sales team must understand that rules are rules and your retailers must know that once they buy it is their product and they must pay within 30 days. Your focus as a distributor should be to make sure that either your accounts staff or you call them on the 31st day reminding them about their dues.
AR is a slow killer. Things will look good when you are making numbers, but if you find yourself in a position where you are not paying your sales reps on time or even your wine suppliers on time, that is a problem.
4. Drivers and Delivery Team
If sales reps are the face of your business, the driver and delivery team is 'the business'. Wine distribution is a service business and the most important part in the business is making sure that your customers get the 'right product' at the 'right time' in the 'right way' with the 'right attitude'. We will explain in detail here...
Drivers need to receive good training about perfection and they need to understand why they are so important. Your customer (retailer) will see 2 people in your company more than you.
Their sales team and their driver. Many small businesses have sales reps complaining about their drivers and drivers complaining about sales reps. Both are right. Some times, sales reps 'push their brand' so hard and convince the 'wife' or one business partner for example and when the delivery goes out, the husband refuses it.
The driver is not a sales person so he/she should not be expected to explain the basis of the sale to the retailer, or call their sales rep at that moment to clarify the situation.
These kind of problems happen on a daily basis and it all comes down to the 'relationship' the sales person has with the retailers. I have had drivers complain on an ongoing basis about a few sales persons (and mostly about the top sales people!).
Getting your delivery team to understand how hard it is to sell is vital. They need to understand that they are NOT delivering Pepsi or Bud Light, no one 'needs' their brand, so it really helps if they 'handle the delivery with care'. Good drivers and delivery will make your life easy, so always hire drivers with some patience and sales skills and you will save yourself some returns.
5. Support and Merchandising
Budget for 'support' in your pricing. Support is vital. Tastings are a great way to help your retailer bring in new product and a great way to build brands. Learn from the beer distributors, they have mastered the craft of merchandising - they decorate their customers' store as if they are showcasing jewels.
