Know-How Exchange : Strategy

A distributor has the sales staff already in place, knows the market, has a customer base, knows the legal quirks of each state liquor laws, warehouses, maintains its own trucks, etc, etc. All, are things you'd have to recreate on your own if you handle distribution yourself. With a niche brand, can you expect the volume to handle that kind of expense and turn a profit?

If you let them handle the sales side, you can put your attention on marketing your product and drive sales.

Sell Well and Prosper tm

I believe your best route is to go the brokerage route. You can still do the things you do best in creating a brand and developing a name for the product while allowing them to handle the shipping logistics.

Further, I suggest you build incentives for the distributor which drives them to assist in market development. Far too many companies fail to plan in this area and it leads to trouble down the road.

if you have questions about how to work with distribution you can contact me via my profile.

May I suggest please.

Before diving in too deeply and investing cash :) Take a very very very close look at the novelty Vodka market.

City Level
State level
National level.

it is a very crowded and very low profit market place.

Define very well who your target customer is.
Are you planning to sell to bars and restaurants?
Supermarkesta dn liquor chains?
Corporate Gift Market? (THis one may be a great place to start).

Go out and buy a few novelty Vodkas that are already in the market. Try to speak with the stor owners and find out how many cases per month they move. (probably one).

if it is a novelty Vodka, don't expect any big volumes - the key is broad distribution across many many outlets. Many retailers will want to take it only on consignment to start to see how it moves and they may only want half a case at that if they are small.

My main point is just - DO your homework very well before you make your marketing plan and try to gather as much info from retailers and distributors as you can.

Do a mini trial run - ie. get in your car with 10 cases of the stuff and go to some of the liquor retailers adn try to convince them to take it on. They will give you great feedback as to what price points they think will sell, how much volume they can anticipate per month and How much money they will want from you for marketing support (Posters, Shelf Wobblers and other display items plus free caps, drip mats etc. etc.).

Good luck :)

Feel free to get in touch if you want more ideas on this.
matthewanxa at gmail dot com

You're going to be swimming in some deep water. We currently have 42 different vodkas in stock. That counts the flavors individually, but different sizes of the same vodka are only counted once.

I'm not exactly certain what you mean by 'novelty.' Is it made from an unusual product (we now carry a tomato vodka), is it an unusual flavor (pomegranate is hot), is it unusual packaging (look at Grey Goose to see how packaging can affect a vodka brand), a celebrity tie in (Trump)...?

I just looked at the history of a few different small brand vodkas, so I can give you an idea of what you may face. In one case, someone here bought 12 (12 bottle) cases - in 2004! He got a good deal, but we still have 50 bottles on hand.

For another item, back in 2005 the vodka was hot, and we sold 5 cases (purchased one case at a time) in less than six months. We then got a great deal on 5 cases and we now, 3 years later, have about 20 bottles on hand.

A more successful brand is one where we sell about 3 six bottle cases every two months, and that is the most expensive of the three.

Three things you should take away from this.

1. Someone will buy it, once, if the deal is good enough.
2. If you want to see reorders, though, you are going to have to sell it. That means a big advertising push, as well as samples for buyers, in-store tastings, bar events, etc. Don't expect a distributor to do that for you.
3. We really need to have a sale on small brand vodka.

I can't answer the question of compensation, because I've never been in that part of the business.

For which route would be best to build the brand, it would depend on your marketing budget, but there is no way I would suggest going it alone. If you have a big enough budget (like 7 figures) the major distributors would be the way to go. If you don't have that kind of budget, I would try to get it into small distributors in a few major cities. The small distributors will be able to give your new brand some personal attention you wouldn't get from the big boys, and you could concentrate your marketing efforts on a local, rather than national, scale.

I hope this helps.

Paul

Most companies expanding to a new country just want to find a distributor and start selling, but most of the times there is work to do before placing the product on the shelf.

You need to write a marketing plan first. Define the target audience, current usage and behaviors (may be different to the country of origin), needs, define the competition, pricing, life cycle of segment, and benchmark to the country of origin. That will help you identify the opportunity/niche and design a sales and marketing strategy.

Once the marketing plan is in place (provided it determines that there is a market for a new vodka), you can sit together with the distributor and start selling!