I want to spend a little time setting the context for this post because the longer you’ve been in the wine and spirits game, the harder this concept is to grasp. Distributors can no longer do what they used to be able to do for their suppliers. Why is that? Quite simply, there are too many suppliers and brands, and too few distributors.
That sets up a new reality, and if you fail to appreciate this new reality, it will leave you very frustrated. You have to adjust to this new environment and, more importantly, completely let go of any notions you may have that somehow you can get your distributors to perform at a higher level.
It’s not the distributor’s fault.
Let me be clear. The diminishing of distributors’ capabilities over the last five to eight years is not a matter of motivation or intention. So if you’re trying to address those things as a way to get your distributors to act, you’re going to set yourself up for failure. It’s simply a function of them being very overwhelmed, and it’s up to you to see what’s going on. They’re not going to come out and tell you, “Hey, we’re overwhelmed!” We must stop the seriously flawed belief that more training, communication, education, accountability, or incentives is somehow going to cause the distributors to improve their performance. Put away your stupid trackers. Put them in the paper shredder, where they belong.
I see the most evidence of this flawed thinking when I look at a typical wine sales job ad. It doesn’t matter whether I find it on winejobs.com or BevForce or another place. When I look at these ads and see the job description, I am astounded to see the way people think about what it’s going to take to be successful with distributors. I can’t believe this way of thinking is still alive, but it is. As I peruse the essential functions for one of these wine sales jobs, I see bullet points that are so out of touch with reality — it’s sickening.
How could so many people be so wrong about something so obvious? Because people are making the fatal assumption that what used to work still does. If you’ve been around the industry for a while, you remember the time when a great meeting with the distributor, spending time with them, and coming up with clever and creative incentives, used to work. So why are so many people still clinging to that?
For those of you reading this who are finally ready to accept the new reality and do something about it, consider this a nickel’s worth of free advice.
What should you expect from your distributor?
I think it’s wise to recalibrate your expectations to the lowest common denominator and then slowly incrementally move up from there. Think about the most basic capabilities that you need your distributor to do. You cannot conduct business without these four elements:
- Purchase pallets of your product and store them in their warehouse.
- Ship them to the accounts as ordered.
- Do it at the correct price.
- Don’t run out of stock.
Even within those four basic things, there’s a lot of ways that suppliers should be paying attention and helping the distributor. You’ve got to be actively involved in these things too, but they are certainly the baseline of what you can and should expect the distributor to do.
The next level would be to have their sales reps actively pursue and build new distribution for you. That’s the holy grail. That’s what everyone wants. But here’s where things start to go horribly wrong for most suppliers. This will not happen without you doing your part. Unless your footprints are all over the marketplace, you’ve got no right to expect the distributors to do any of it. A good rule of thumb is that the best your distributor can do for you is to match your efforts.
If you are one of the countless supplier “partners” that feel it’s the distributor’s “job” to do these things, you must wake up and recognize that those days are long gone. It isn’t a question of whether or not a distributor can sell your products, but will they sell your products? The answer is that it’s completely up to you. You need to be the lead dog on the sled, not them.
Once you’ve come to terms with the cold hard facts that you’re going to be limited in what you can expect of the distributors, you can get busy executing a newer, more modern approach to building distribution. And so, without further ado, here are the three things that you can do.
1. Have a Plan
You need to have a realistic plan based on solid research of the market, competitive landscape, and the ‘complexion’ of the market. Some markets are very chain-driven, some are driven more by independents. What does the on-premise landscape look like? The off-premise landscape. Where is all the business being done? Where are the key accounts? What other products are inside the distributor’s book?
I have news for you. If you think it’s the distributor’s job to do this research, you are sorely mistaken. But distributors will work hard to help the suppliers that have done all their homework and come to the table with a realistic plan. You need to do your homework — and lots of it.
2. Create Your Own List of Target Accounts
Start with a profile of the ideal customer for your brand, both off-premise and on-premise, then start researching accounts that fit the criteria. There are all kinds of great resources for this: Google, Yelp, Open Table, etc. Put in the time and the homework to research the best accounts and adopt the mindset that less is more. Fish where the fish are. Not all accounts are equal.
The 80-20 rule is real and very important. Time, people, money — all of these sales resources are always going to be very limited. You can’t be everywhere. You can’t call on everyone, nor should you. The results by volume approach is extremely foolish. You need to be a lot more selective in the use of your resources. That way, you’ll get a much greater return on the time invested. This becomes even more important if you’re a supplier that’s personally covering a large territory, and you can only spend just so much time in each market. Be disciplined and do your homework.
(And in case you haven’t picked up on this yet, you don’t just take this list of well-researched targets and hand it over to the distributor. That is not very wise at all. This list is for you so that when you’re in the market, you can make the most significant impact.)
3. Take responsibility for Generating Demand
This one is at the top of the list of unfamiliar tactics for most suppliers of wine and spirits around the country. It’s brand new, under-utilized, and thankfully, it’s entirely within your grasp. You must take responsibility for generating demand for your brands and products in the marketplace, with both trade and consumers.
This is the future, and it’s something you’re going to need to figure out. Don’t leave it to the leaders of your company in your marketing department to do this. If you’re in charge of a geographic area in the US, you can get busy doing this right away.
So how do you generate demand for your brands in both trade and consumers? There are several powerful ways, but I recommend this one-two punch: Facebook lead ads and Email Marketing. (We use ConvertKit, and we love it.) Use a highly targeted Facebook lead ad to gather consumer email addresses, then integrate the ad with your email software to grow your consumer email list. Do the same thing with trade.
Then, use email marketing to sell your wares to people. Now, there is a big learning curve to this, no question about it. But if you want to have any hope of prospering in the current environment, you have to take the time to learn it. Distributors are very overwhelmed. Gone are the days of them just doing stuff for you because you wrote a great incentive or had a great educational seminar.
Help your distributor help you.
If you want to take more control of your destiny, this is how you have to do it. It’s tough in our industry, in the three-tier system, to find things that are 100% completely within our control. The good news is this is one of them. Distributors help those who help themselves.
There is no doubt that there are varying degrees of successful collaboration between suppliers and distributors. They run the gamut; I’ve seen them all. Some do an exceptional job, and distributors respect and admire them and go out of their way to help them. At the other end of the spectrum, there are those that are truly terrible and clueless; they’re living in the past and don’t have a clue. Then there’s varying degrees along that spectrum — just your average supplier.
If I were you, I’d figure out where you are on this spectrum and how much you are clinging to the past. Either way, resolve to move up the ladder, one rung at a time, towards being a modern supplier that genuinely understands what distributors are up against. There is a magical correlation between how hard you work in the market and how hard your distributor works for you. Help the distributor help you; that’s your new mantra.
I also want to offer you a FREE resource that dives into the idea of a more “modern” approach to being successful in the 3-tier system. It’s my free online course called, “The Modern Playbook for Wine & Spirits.” It’s absolutely free and contains 6 short videos totaling just under 1 hour of total watch time. More than 300 wine & spirits professionals have already taken this short course. If you would like to enjoy this course for free, just click here.