When beginning to evaluate which distributor your cidery should sign with, you need to do a lot of thinking and planning before even considering the idea.
“They are selling our brand, blood, sweat, tears, and our farm/cidery story,” explained Tallgrass Cider’s John Knisley. “We don’t want to just chase the lowest cost and miss the story.
But even before finding who can be the right fit, Lara Worm said the first question you should ask is: Are you sure you want to distribute via wholesaler?
“There is a pervasive myth in the beverage industry that ‘that’s where the money is,’” said the co-founder and CEO of Bivouac Ciderworks. “For a small or medium-sized brand, that simply is not true. The amount of infrastructure, investment in sales and marketing, and percentage to the wholesaler and retailer eats so far into your margins, it is truly hard to make any profit.
“Many brands are trying to ‘scale and exit,’ without realizing what that really takes. So, before you talk to a distributor, ask yourself: Why am I doing this?”
Knisley also stressed how important your role in sales fits into this decision as well along with Worm.
“A brand, alone, is responsible for their own sales,” she said. “Not because the distributor shouldn’t also be responsible for those sales — and directly profits from them — but when a wholesaler isn’t doing their job, or doesn’t pay attention to your brand, or your sales are lacking, you are the one going to go out of business.
“At the end of the day, you are responsible for paying your own bills, so you better have a backup plan.”
READ MORE: Cider Corner: Ways to Formulate Market Differentiation & Consumer Engagement with a Wholesaler
She added that if the distributor is great, and you are partners in lockstep with each other, co-selling and growing the brand and sharing in profits can be beneficial.
“But if a distributor isn’t great (for your brand), which unfortunately happens more often than the alternative, you’ve got to have a plan to go around them,” she said, “either with your own sales and marketing team or with a reasonable alternative business model.”
Coming Soon: Strategies to Consider When Evaluating Distro Partners
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