06/11/2019 Finding the right distributor to represent your spirits is important. Here are 5 tips on how to find the right distributor.
It’s no doubt that the alcohol marketplace in the US is one of the largest and most important in the world. Let’s be honest, everyone is looking to get into the US market. Whether it’s in retail chains, restaurants, bars, or even gas station stores - tapping into the US market is a huge deal, and everyone wants to be a part of it.
But being a part of the US market requires heavy distribution. There’s a high demand for spirits in the US, of course, but let’s not forget that with the high demand, there are also new brands and products popping up across the market - so there is a lot of competition as well. One thing to keep in mind while entering into the US spirits market is that finding the right distributor is critical to your success in the industry.
Why is it important to find the right distributor?
Let’s not forget about the three-tier system for alcohol distribution in the US, which goes a little like this : Importers/Producers; Distributors; Retailers - but you probably already knew that. Because of the three-tier system, your spirits can’t directly find their place on retail shelves or restaurants, they need to go through the distributor. Therefore, finding the right distributor who will represent you and your brand with interest and passion is very important.
How to find the right distributor for your spirits
- Do all your homework
Too old to be doing homework? Well, kick it back to high school because you’re going to have a lot to do. Before picking the distributor you want to go with, you need to do your research. Pull out the distributors you think you might be interested in. Once that’s done, do research on them.
Follow this checklist to make your life easier
- The distributor’s salespeople, how are they? Do people know them? Are they easy to work with?
- Check out the distributor’s social media and website. Is everything updated? What accounts do they distribute to? Who are their other suppliers? Is everything legit?
- Ask the top account in the market about the distributor. So for example if you find out Olive Garden is working with a certain distributor you might be interested in, then find out how they are. Find out if their way of working is good.
- Ask other suppliers about the distributors. Other suppliers would be the best people to tell you about how the distributor works and if it’s worth building your account with them.
- Are you a good fit for their portfolio?
Before picking the distributor you want your spirits to end up with, you need to find out if your spirits fit into their sale book. Do they have experience in distributing a product like yours? And are they distributing where you want your spirits to be distributed? Think of it this way, if you want your premium spirits to end up in high-end bars and restaurants, and you go with a distributor who distributes to gas stations and retail chains, then what’s the point? So make sure that you find out if your spirits would be a fit for their portfolio.
- What’s their payment schedule like?
In the end, everyone is in the business to make money. Yes of course, everyone has a vision and a passion for their business, but money is also what they’re here for. Find out if the distributor is paying their bills, find out if they are paying their suppliers on time and as promised. You don’t want your money getting stuck for ages and affecting your business.
Once you’ve found your distributor, building relationships with them is important. Click here to check out 7 tips on how to build a relationship with your distributor
- What’s their market presence like?
This is one of the most important things to keep in mind. Does the distributor have a market presence? Do people know about the distributor? And what is the distributor’s impression in the market? If you find out a certain distributor is known in the market, but doesn’t have a good impression overall, then ask yourself - is it worth working with that distributor? You don’t want your spirits to end up in the hands of a distributor who isn’t liked by the accounts you want your products in - because then that creates friction, and in the long run, the friction will affect your brand.
- What do market influencers think of them?
If you didn’t already know, the alcohol market in the US has a good amount of big boys who are known as market influencers, such as people supporting brands, Godfathers of retail, and others who have been in the industry for a while and sort of run the game. These influencers have the power to make or break brands. It’s important to find out what their perception on the distributor is. Do they like working with them? Or do they think there’s too much friction by working with them. Finding this out will help you figure out if your distributor is going to make a place in the market with your spirits or not.