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Questions & Answers

Posted by Ted Fleming on 2014-09-25 15:21:00
Title: I own a business that specializes in non-alcoholic alternatives to traditionally alcoholic beverages...
Category: Marketing

I own a business that specializes in non-alcoholic alternatives to traditionally alcoholic beverages (beer, wine, cider, cocktails, spirits). Our website is geared towards retail sales to individual consumers. I would like build the distribution side of the business and also sales to commercial customers. I am looking for suggestions on how I might approach this on a limited budget.

Answer:

Chris Neal
2014-12-01 10:42:00

Hi Ted,

You have 2 choices: you either build your own distribution network or find a distributor. You have also indicated that you would like to pursue both retail sales and food service/commercial sales. If you are building your own distribution system then you simply combine the 2 and have your sales force call on both sides. However, if you are looking for a distributor you are likely going to have to find 2 separate partners as few companies look after both retail and hospitality and there is nothing wrong with that, as they are very different animals. What you need to do is make sure you find the right people to work with, ensure that you have sufficient margin to satisfy both you, your distribution partners and still allow yourself enough room to support the brand through discounted pricing for specials, ads in flyers, or any costs to list the products with larger multi-store accounts. I would recommend speaking with some of your ideal accounts, places you think your product would best be suited and ask those people which distributors look after them and which don’t. If this route is the one you choose, you sacrifice margin but you have much less capital costs.

If you choose to build your own network, your costs are going to be in drivers, warehouse space, gasoline, insurance, truck leases etc., but you retain FULL control over the handling of your product, where it is placed in a store, etc.

Both choices have inherent advantages and disadvantages.

Best of luck with it,

Chris Neal, Operations Expert, Neal Brothers Inc.