After the prohibition, the federal government of the USA instituted the three-tier system and assigned the responsibility of alcohol distribution to the states. The entire three-tier structure revolves around suppliers, distributors, and retailers of the alcohol beverage brands. In this supply chain, alcohol distributors have a huge and important role to play. Suppliers are required to go through the alcohol distributors in order to get their products on retailers’ shelves space.

For alcohol beverage brands, the process of picking and partnering with a right alcohol distributor among the thousands of them seems a little (or maybe much) complicated. However, with correct guidelines and correct ways to implement those guidelines, alcohol suppliers will be able to find the fitting distribution company that can help them enter into their targeted market and expand their scope.

Selecting the right alcohol distribution company

The first step towards the selection process is to research on distribution laws as they are different in every state. After considering all the regulations, the next step is to list down all the companies that distribute alcohol in the area that suppliers have targeted for their products’ distribution. Find out the distributors that have performed in the past successfully reaching the targeted consumers. Every emerging brand may have different requirements according to their production capability and marketing ability. A supplier must establish the criteria and only shortlist the distributors that fall into the defined criteria.

Attracting alcohol distribution companies

Once the list of potential distributors is ready, suppliers should start presenting them with a pitch. Every distributor will have a different approach and perception about the brands that they would like to add to their portfolio. Therefore, suppliers will need to prove that their products can offer the value that distributors are looking for.  

For an initial approach to distributors, suppliers should consider contacting them via a phone call or a detailed email with the description of their beverage specifications and why their brands are best suitable for the distributor’s portfolio. This first contact should indicate that the supplier has researched about the distributor company in depth and understood how his products will satisfy a particular zone of the market that is not in the radar of the distributor’s company.

Pitching alcohol distributors

After the initial contact results into a personal meeting, it’s time to prepare the pitch. This pitch should address how the products of the supplier will sell. One good point to be discussed upon is the demand of the supplier’s brand in the marketplace. This may, to some extent, confirm that the products will sell well in the retail stores.

Negotiation

Suppliers must discuss their pricing, logistics costs, and marketing budget, as keeping clean with the numbers is an appreciated thing. Typically, distributors would want 40% of the margin. Whenever it is feasible, suppliers should compromise in order to manage to get distributors higher return.

Win a deal

• The distributor would like to see supplier’s ability to execute marketing efforts, to come prepared for it, bringing product samples and POS materials (Point-of-Sale Materials).

• A merchandising tool that can collect data about product promotions among other options will absolutely help suppliers representing their business in a unique way.

• Expressing the potency of the product’s packaging, how it will leave an influence on customers and attract them to buy, is another good point to consider in pitch.

• A supplier must consider explaining how stockout situations will be prevented. This means meeting current stock requirements, measure the production for the future, and being flexible to prevent mishaps in supply chains.

The relationship between suppliers and distributors is long-term, hence, before commencing it, the supplier should evaluate the comfort level, how mutually beneficial the relationship is, and how confident they are in starting this. Here is an article to deepen your understanding as a supplier on how to pitch a distributor.