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As a wine brand in the US, the most important and hardest part of the game is finding the right wholesaler. Because of the works of the three-tier system in the US, you obviously can’t do directly to a retailer and restaurants. So the wholesaler is the most important part of the supply chain for you.
Hosted by Sid Patel, the 15th episode of the Wine Whiskey Weed Show features Eric Guerra. Eric Guerra is known to be one of the finest sales and marketing experts in the industry. Along with selling over 50 million cases of wine in his career, he’s also developed over 500 wine brands.
One of the main things that Eric focuses on while building a brand, is finding the right wholesaler. Finding the right wholesaler is where most suppliers and producers tend to get stuck.
So the question is, how do you go about finding the ideal wholesaler for your brand?
Before you go into the game, remember that every wholesaler is in the business for one sole reason - and that is to make money. Of course, they are passionate about the art, but in the end it all boils down to making money. So before jumping into the search for your wholesaler, be prepared to be doing most of the selling.
Look at your wholesaler like a gateway into the market, and not the market itself. What this means is that the wholesaler will definitely get you the accounts, but you need to put in extra to make the sales and get the stock depleted.
Wholesalers across the United States have big books, and if your brand isn’t making them money, then it’s very easy to get lost in their books. So, the first thing you need to take care of is be prepared to do all the selling. Make sure your stock is being depleted, so your brand turns into a repeat purchase. Only then a wholesaler would want to work with you.
Let’s dive into how you can actually pick the right wholesaler for your brand.
Knowing yourself is the most important thing to check off the list before settling on a wholesaler. You need to know your goals and your strengths. You need to know where you want to be. Are you looking to be nationwide? Or are you just looking to be in your state?
If you don’t know your goals and are not settled on what you want your brand to portray, then your brand is definitely going to end up in the wrong wholesaler’s hands. Think of it this way: you’re looking to take your brand nationwide, but you’re securing a wholesaler who doesn’t have a wide reach and only deals in a certain area. See how that will stop you from growing? Similarly, if you want your brand to be focused in a particular state/area, and you go with a wholesaler who only focuses on national brands, then you’re in the wrong hands here too.
“It’s no different than dating. You need to find out who you are and who can deal with your daily issues and your daily greatness as well. It’s the same thing with wholesalers. You gotta find the perfect match”
All in all, you need to define your brand and your goals.
“Most brands just open up widely to let’s say 50 markets, and I think that’s a really terrible way to go”
When a brand directly goes to a noisy market like New York or California, they tend to get lost since they go in without a strategy. The best way to infiltrate markets is by taking things slow. It’s best to pick a strategy where you start small. Maybe start out in the Mid Atlantics and then move ahead.
“Having a strategy where you don’t have to make a million dollars overnight is what works. For me, moving slow wins the race, especially in the wine distribution network”
Start with lesser states, go to places that have great cities, great wine culture, where you can find wholesalers ready to give you the attention.
This goes back to approaching markets slowly. Before you go ahead and infiltrate larger markets with large wholesalers, try building your base in about 5-8 states as a start. Build a relationship with your wholesaler out there, build a relationship with your retail accounts. Build a base with people who will respect your brand and care about your brand, especially when you’re starting out.
Look for your repeat business first before you end up going into a new consumer base all together. Focus on a repeat order, and that’s when you know that your brand is doing well - when you have the repeat business.
Relationships are very important in this area. You need to know people to get your wines out there. People need to know your story, because in the end that’s what sells to the consumers.
Before you even go on in picking who is the right wholesaler for your brand, you need to focus on finding wholesalers that might suit you. You need to find wholesalers who you think will fit your needs, and whom you can work with. The tricky part is singling those wholesalers out. Where are you going to meet them? How are you going to meet them?
Trade shows are a great way to connect and meet with wholesalers. Trade shows are a place where you’ll meet a bunch of wholesalers all under one roof. You’ll be able to see what they are looking for, and you’ll be able to offer your brand to them right there and then.
Let’s be honest, wholesalers are really tough to get a hold of, but trade shows are a great way to single them out and meet with them face to face the first time. Keep in mind that you should definitely make an impression. Whether it’s with your wine, or with your strategy, or just something as simple as your booth - making an impression helps the wholesaler identify you and your brand if you get to working with them.
This is full-proof. Ask around for recommendations from friends. You have a friend with a brand? Find out who their wholesaler is. Ask around the industry for different wholesalers. This way you’ll be able to get a list and then slowly single out the one you want to work with according to your brand and what you want.
Asking other brands who their wholesalers are, is proven to be a great strategy as well. Most brands usually go ahead and have their wholesalers on their websites, but sometimes when they don’t, you’re just going to have to pick the phone and make a call.
“You can tell them you’re a retailer or something. I know I’m being dishonest here, and it’s an awful thing, but it works” said Guerra, as he explained the calling sector.
It’s like aiming to be a brand. If your aim is to be like a certain brand, then go to that brand and find out who their wholesaler is.
You now have everything set out, a list of wholesalers you can approach - but now it’s time to qualify which wholesaler to actually go for. You can’t just pick the first name on the list. You need to pick someone who is ready to work with your brand, its story, and its authenticity - along with the business side of things as well.
So for example, if you have a luxury brand, then your wholesaler should be educated about the wine. They should know how to sell a $300 bottle of wine. They should know how to rightly tell the brand’s story, which is a major driving force in selling a wine.
On the other hand, if you have a more affordable brand like let’s say $10 a bottle or $50 a bottle, then make sure your wholesaler is an expert in the distribution channel. Make sure they have a good amount of retailers they can pitch your wine to, maybe even bars, and restaurants. Keep a check on the distribution channel of the wholesaler. How deep are the penetrating? And are they going to be able to do the same for your wine?
“I would suggest when going with a wholesaler, you should go with a medium sized wholesaler”
Going with a largely established wholesaler, who has been there for years, you’re bound to get lost in their books, and they already have their money, they’re making their money, so they aren’t going to focus much on you. On the other hand, newer distributors just don’t have deep distribution channels. They don’t have a lot of connections either.
However, someone in the middle would be perfect as they are looking to grow as well. They’re passionate, they have the knowledge, they have the interest and they also have the connections. So it’s usually a perfect match.