Distributors how do you sell

How do you sell to the majority of your retailers (not restaurants)?

I am putting this here rather than in Wine Pimps or Cellar Rats for two reasons, one I would love to show the majority of wine lovers that sales are not what they think and two I think it may get a little more traffic here rather than elsewhere.

This is my first poll, so those of you who are quick to point out it is flawed…yea heard that before !!! A glass on me.
Todd and moderators, if you need to move this…well okay!

Not sure what you are shooting for here, how many distributors/reps there are on this board, what you think peoples’ perception of sales are, etc. We distribute our own wine here in Oregon. I would say we have everything from six-pack to mixed case to multiple case orders depending on the retailer, the wine(s) and time of year. I am guessing from your last 3 options you are expecting to get a lot of slow/no sales sorts of answers?

Hi Jim, thanks.

I was discussing this with a friend recently that our distributors in most our States sell by the bottle to their retail stores. Obviously if you have a fast moving good priced product it will move faster and retailers may request a whole case of certain wines, but from what I hear this is not the rule. My friend did not have any idea, he felt the distributors sold by the case almost always. Wineries selling direct I would imagine would sell most often the way you are indicating.

My last three were to attempt to cover options to prevent the “flawed poll” response. I added a couple of other options.

Nola,

Cases only. I’ve gotten requests for bottles but have to charge a premium and the truth is it’s a waste of time for me. Pallets tend to move on less expensive items that are being floor stacked.

It also depends on the state, I believe some states allow bottle sales and some require case sales. I can’t imagine it’s cost-effective to deliver 1-2 bottles to retailers, as Jeff mentions, unless we’re talking very high-end wines.

Although I’m not ITB I do know that here in Maryland distributors do sell by the bottle.

In many states there are no quantity discounts so those distributors have a much higher percentage of bottle business.

Most distributors sell by the bottle but between no quantity discount + a pick charge it makes you non competitive especially on inexpensive wines.

Most inexpensive wines ($5-20) are usually sold in multi case deal levels 3,5,10 (depending on the state you can mix sizes, varietals).

Only the biggest most powerful stores (usually $10mil+) would consider a pallet buy.

Most distributors have a delivery minimum as well this ranges from $100 (typical of a big distributor that does there own trucking to 5 cases (typical of a small distributor that outsources warehousing/delivery).

Many states don’t allow bottle sales, others do. Incredibly inefficient and mixing a single case with different bottles is borderline crazy unless they’re super-allocated bottles and really highly priced.

Some wineries put their wines into 6 packs if they think the stuff is a little expensive for a 12, but those are kind of a pain too. In NYC, there aren’t a lot of stores that have the storage for pallet deliveries although those are obviously the most desirable. If you’re selling to distributors in other states however, they often prefer to take those as it’s a more cost-effective way to deliver.

It also depends where the wine is coming from and the cost. Many Italian wines are sold by the 6-pack. Many higher end domestic wines are also 6-pack buys. Luckily in CALIF. wholesale is not limited in terms of format (btl, 6pack, case, etc…).

We’re more D2C but do have a couple of small restaurant clients. It’s case only for us.

In Michigan, we have no case minimum requirement under the law, so my company does sell by the bottle, as does every other distributor in the state. Similarly, state law mandates same pricing from bottle one, so no volume discounting is allowed.

Additionally, most of us also have split case fees and delivery minimums that mean in many instances we get orders of mixed cases as retailers either build up their order in bottle increments to meet delivery minimum, or having easily met that, simply opt to give away margin by paying the split case fee when they tack on a few more bottles. Split case fees range between .50¢ per bottle to $1, maybe a bit more, but not enough in any case to discourage the habit, as most retailers don’t watch the books so carefully and are largely unaware of how much the charges are exactly.

I don’t know how you want to record this, Nola, but I’m guessing that since we don’t deliver strictly in multiples of 6 or 12, you’d say we sell in bottles.

I believe that Ohio’s LCB is almost a twin to Michigan’s.

Most distributors Ive dealt/worked with have a minimum case requirement to sell to restaurants, usually 2-3 case minumum. Unless its a BTG pour, they tend to be different cases from different producers. Hi Nola!

Unbelievable. I can’t imagine not knowing the actual cost.

Yeah, I know!

After so many years of fielding the question from long-time clients of what our split case fee was when, in fact, we’d never had one, made me realize that we were leaving money on the table by not charging one!

We’d thought not having it was a “value added” feature for our clients, but since they didn’t know, when we decided to add one and I started asking around about what other distributors charged, I found most clients had only vague ideas about what they were actually being charged (off the cuff, at least), with some variances of .20¢ or more. Obviously, split case fees were, and are, non-issues around here when it comes to quantities ordered and shelf pricing. We’ve had one for about a year now.

+1 but not really surprising, the wine business is not always run like a business, which is what really amazes me.

The average split-case bottle charge in NY is in the $1.50-2.00 range. Particularly with liquor but also with plenty of wines, regardless of case pack size quantity discounts are often listed in bottle increments.

So for example distributor A sells Smirnoff 750mls and they come in a 12 bottle case. The distributor may offer a 3bot & 6bot discount level as well as a case price and multi-case discounts. However, on any split case increments the bottle charge applies to the loose bottles shipped. Distributor B is smaller and they sell Sobieski 750ml. They offer the same discount levels but waive the bottle charge as long as you purchase in the appropriate increments to encourage more business.

With less expensive products split case charges can really eat into margin. But does a dollar or two really make a difference in the base cost of a $50+bottle? It’s a great way for a small retailer like me to sprinkle in 3-4 bot quantities of higher end wines and liquors. However if I have something that sells even reasonably fast stepping up to buy a 6 bottle case is really a no-brainer. The expensive items that come in 12-bottle cases make it a more reasonable situation to simply pick at a few bottles.

Also, I would proffer that a retailer ‘not knowing’ their actual cost is simply willful ignorance. Bottle charges are always applied on the line item totals of NY invoices so it’s plainly obvious what your net bottle cost is, and with invoices where they add a ‘surcharge’ when you don’t meet a minimum delivery amount that should likewise just be amortized by the retailer towards his net bottle costs of the invoiced products.