This article is the first in a series on improving your standing with your distributors.
There are over nine thousand wineries in the US selling countless brands. Pushing this ocean of product through the chaos of a quickly changing and ever-consolidating distribution network poses monumental challenges for all suppliers and distributors alike, even the largest and most-disciplined. For large suppliers, like in other categories, scale offers a major advantage because they can command attention from and wield considerable control over their distributors. But what if you are a boutique winery? Or a small brand within a larger supplier’s portfolio? If you are one of these, you likely feel helpless and frustrated by your distributor’s complete lack of time and attention.
This feeling of helplessness is akin to visiting a foreign country where you don’t speak the language – the signs are unfamiliar, and communication and understanding are a challenge at best. That’s because wineries sell products to consumers – intimately crafted wines and the experiences they conjure. Distributors sell services – B2B warehousing, logistics and credit services. The two couldn’t be more different. Accepting and addressing this difference in the following three ways could set you apart as a small player in that distributor’s big pond of products.
Flip Your Perspective
When thinking about their products, suppliers have a tendency to believe, “If we just make our distributors understand how our products are unique/better/special, then they could optimize their business and help us achieve our goals of reaching many consumers.” Viewing the world in this way – what is best for us – is taking an Inside-Out approach.
In order to sell their experience outside of direct-to-consumer programs, suppliers must first think of their distributor as a customer. They can’t just create value for their end-consumer. They must create value for powerful stakeholders in their supply chain.
Rather than trying to find all the ways to more efficiently pull customers through to their own view of the world (Inside-Out), success is far easier to achieve when suppliers focus on how well business processes align to target the supply chain’s buying processes, using an Outside-In approach.
Consider: Which of your goals, if any, are focused on understanding and meeting your distributor’s needs?
Check Your Assumptions
It is worth repeating – in order to sell their experience outside of direct-to-consumer programs, suppliers must create value through a supply chain that includes that “all powerful” distributor. In order for the distributor to move that product to a market of hundreds of thousands of on and off premise accounts, the supplier must supply, in addition to a product, a RELEVANT reason for the distributor to engage fully in that effort. Otherwise the supplier fails to reach the market and the distributor is stuck with dead product.
Mid-sized and small brands complain about the difficulty of getting distributor focus when the big brands and suppliers in a distributor’s portfolio are always hogging the spotlight. With a portfolio of thousands of SKUs, you will likely find competitors just like you offering a wine with the same price, variety, appellation, and case incentive. Yet some of these brands and suppliers still receive more of the distributor’s attention. Why? And have you ever asked them?
Consider: How many brands your distributor is selling just like yours. Do you know which are getting distributor focus and why?
Open Your Mind
Many suppliers view distributors as a necessary evil. After all, you’re likely paying your distributor upwards of 25% of your margin to sell your products. Shouldn’t that be enough to get a little attention? The challenge is, that despite the craft and the story that goes into wine, it is no different than every other product that goes through a distributor – food products, industrial products, or electronics. There is almost always a long tail of products in the distributors portfolio made up of an endless list of goods they are paid to sell after they take care of their top 5-10 brands.
Our challenge is when we view something as a necessary evil, or put another way, when we don’t particularly like someone or something, we have two reactions – we ignore them or we confront them. Neither makes for a particularly fruitful relationship of dialogue. Imagine you have a meeting scheduled with your distributor. You come to the meeting angry as you have been busy creating great wine and running a great tasting room, and yet the distributor’s performance has been lackluster. Your plan, naturally, is to grill them and get commitment on what they will do to turn performance around. And, naturally, you will get one of two responses – the shutdown or superficial appeasement.
When we are jaded by disdain and frustration, building relationships becomes really hard.
The following three questions, perhaps uncomfortable, are a guide to help you break this cycle and change the tenor of your conversation. If you open your mind, you may just be surprised by what you hear and learn that could improve your relationship and the results you have with your distributor.
Consider:
- What distributor interests do you consider in your business decision-making?
- What would you need to know or believe in order to trust your distributor’s perspective?
- What would a mutually beneficial relationship with your distributor look like?
By continually asking, and answering these questions, you both raise awareness and identify barriers between you and your distribution network. Furthermore, by raising your “Outside-In” awareness, you begin to discover possibilities that can differentiate your business and create demand through the distributor.
Next month: Identifying and Addressing Distributor Needs: What You Can Do to Raise Your Game with Distributors
Published August 6, 2018 in Wine Country Advisor
Expert Editorial by Laura Webb, Okos Partners
Laura Webb is a partner with Okos Partners, based in the North Bay. Okos focuses on helping companies and their leadership teams define and implement strategies for growth.
