Leeann Froese
This is a marketing column, so you might think “does sales come under marketing?” and the answer is… sort of.
If you’re a new reader to this column, marketing is the process of getting people interested in the goods being sold. Sales are all activities that lead to the selling of goods and services.
But we can dig into that another time. Here, I’m going with the idea that a sales article belongs (as many people think of sales and marketing synonymously), as the end objective for both sales and marketing is to move the merchandise!
So, how and where are you selling your beverage alcohol? Most BC wineries, cideries, and breweries (suppliers) have the same channels: onsite, to clubs or subscription lists, on your website, to retail stores, and on-premise outlets (restaurants, pubs, and hotels).
Depending on the size of your organization, those responsible for sales on the team can handle onsite sales and customer service, and a team member or department may be dedicated to look after the direct-to-consumer and mailing list sales.
When it comes to B2B (business-to-business) sales in the trade, some suppliers have owners or staff that work on their own sales in the market, and the rest hire a sales agency.
There are advantages to working with a sales agent and we have helped some of our BC winery clients secure agents. As specialists, these companies know how to navigate the different channels, and have established relationships with the buyers and managers. With their strong contacts, they can open doors for you. But, how to choose the agency that is right for you?
Determine your Distribution Objectives and Agency Size
Set your sales goals. How many cases do you want to sell? Know your maximum case goal and then determine which agencies match that goal.
There is no industry standard, but if you want to sell 1,000 cases for example, an agency with five or six sales reps who service around 1,000 retail accounts could be a better choice compared to an agency who has two reps who service around 300 accounts.
If you are a small to midsize supplier with limited production, then you need to decide if your business would be a good match to a similarly small, boutique distributor who can better identify with growing brands, or whether a large agency may have the resources and multiple-geography footprint to streamline logistics.
Smaller wineries may find that smaller agencies tend to focus mainly on smaller accounts, where small producers can thrive.
That’s a lot of “small,” but sometimes the small, top tier on-premise accounts can really build a brand through exposure to the right kind of consumer.
Larger agencies are not always in the business of growing something, so larger may be a better fit once you are a bit more established and will be an asset to them.
There are other pros and cons to the agency size: with a larger agency you might not be able to move as quickly, since there are more people and more logistics to deal with. With a smaller one, you can maybe do things more quickly in some instances, but you likely trade off speed for a lesser reach.
With a smaller sales team, you might get a listing, but if they don’t have a large enough team that can continue to service the account, you can lose your listing.
Lynette Faye, agency principal at KIS Consulting, founded in 2007, notes that is it important for a winery and agency to talk objectives from the onset. “What does success look like?” she asked. “Volume/brand awareness/channel?”
Is It a Good Fit?
Faye adds “Do they actually want to work with an agency? This might sound quite silly,” she notes, “but I have come across so many companies that really don’t know how the agency model works and once they do, it is not what they want.
“They do not understand that while this is a partnership, as an agency we do represent other brands as well,” she continues. “If you are not willing to share, then an agency might not be for you.”
Raymond Wong, principal/owner at Harvest Select Wines agency, agrees with Faye, “There is no exclusivity,” he says, “an agent has more than one winery represented.”
Looking at the agency’s overall portfolio is a crucial step in determining if your brand fits. Look at some of their priority brands. Can you see your brand alongside them and getting its fair share of attention? Also looking into the business practices of an agency and the other brands it carries can help you learn if that agency aligns with your core values.
Prepare to Support Your Agent
Wong has been selling wine, beer, cider, and spirits for more than 25 years. He notes that “both the winery and the agent must work together, especially if it is a new winery. The winery must provide as much information as possible about their vineyard and winemaking.”
Agencies need their suppliers to be partners that are going to join them on the road, to connect and educate both the sales teams, and customers. And agencies also need marketing support.
Cost of Doing Business with an Agent
Depending on your volume you will need to budget for the distribution model (warehouse fees/shipping/fuel surcharge), as well as sales commission. These should be separate budget line items, and they all add to the sales cost.
What is your marketing budget? “…and yes you need one,” says Faye. “I can sell in the first case, but how are they planning to ensure pull through, especially now with no in-store tastings?”
Plan to spend on marketing and advertising, and any available in store programs. But that brings us back to marketing, so we can tackle that another time.