Salesman with a Distributor question

[Scott_W]

We are a young brewery and decided to sign on with a distributor after 8 months of opening. We hired a salesmen/delivery person at the beginning, to self distribute and he did a great job for us the first 9 months. We have a 30bbl brewhouse and are setup for production and felt that a distributor makes since for our business model. Our sales person established around 60 accounts before we made the move, which the distributor will service going forward. We are struggling with this persons role now that the distributor has a sales force that will be selling our product. Before, he was an hourly employee and we could justify his pay by seeing the checks from the accounts he was landing. Now all sales will be going through the distributor and we are trying to figure out this persons role and pay structure. We would like to keep him on but how do we justify his pay if there is no way of knowing how much money he can actually bring to the brewery now that all sales are through the distributor? How have other breweries transitioned an employee like this? I am sure he is a value to the business. He can still get accounts, handle outside events and customer relations. We are thinking some kind of commission based system makes sense. Any thoughts and advise is greatly appreciated.

Scott

[SMiller]

My advice, he remains a salesperson. Distributors will deliver your beer, but won't sell nearly as hard as your own staff will. You'll need a face of the brewery hitting accounts maintaining relationships. The distributor may handle all the sales, but you and your team need to keep selling.

[Austin Brothers]

I agree with the comment above 100 %. Both breweries I brewed for (one is a real big San Diego brand) both had distribution and we had sales people still... Lots of them. For the big company we used crest. They did a great job delivering and supplying our beer. However if you think about how many products they sell, you have to think to yourself why would they go out of there way to sell a customer your product over someone else's? They won't. They give the customer what they want. It is your job to get guys out there, making sure customers are happy, someone checking/ rotating stock, getting new accounts bc no one else will. Distributors say they will push your product for you but believe me you will want a guy out there who has a stake in the game. Also if you bottle or can Its nice having someone out there making sure no other sales guy is taking your bottles out of the cooler and putting theirs in your place to double their shelf space.. Happens all the time believe it or not. Keep him on! You will not regret it! He will be your biggest selling assett! Hope this helps!

[lhall]

Yes, this person is even more valuable now. You will still need him to keep face time with all your existing accounts and to get new placements. The combination of a dedicated sales rep and the distributor's team should triple your existing sales, in my experience. Pay him a salary plus commission on sales to the distributor, and he will still have plenty of incentive to go out and get new business.

[BeerBred]

Nationally experienced distributor manager here agrees with all comments above. Distributor is a warehouse and delivery system. Sales job is to build relationships, run routes with D guys, manage inventory and code dates, forecast sales etc... Salary, 15% bonus at target, car allowance.

[Scott_W]

Thanks for the reply's. So the over all opinion is that we need him and he will be a valuable asset to the company. I agree with that. What we need now is to figure out a payment structure. Salary plus commission seems to be the best model. In your experience how is that structured? How much commission? Commission on exactly what? Just what he sales? What he and distributor sale? How would the 15% bonus after target goal work? Any options you can offer would be extremely helpful. Thanks

[BeerBred]

I suppose the commission thing could work if done properly but I think I make a good argument against it. This might only make sense to you if you have a thorough knowledge of the game as it's played at the distributor level. First, you can't pay your guy just for what he sells. You are creating a paper trail, he said she said nightmare. How will you be sure your guy got the placement and not the D salesman? What if your guy rides with the D, gets interest from a bar, and you don't go on tap until 3 weeks later when the handle is open? Do you want to spend your time tracking who sold what or do you have better things to do?

More importantly, your guys job is to build relationships with the D guys so they sell your stuff while he isn't around. It's a team game. There is other stuff to manage than just obtaining placements. You want your guy to monitor code dates in the warehouse? Why would I spend my time on that if the money is getting placements? You're going to spiff me for new draft accounts that I get? I will go get 100 of them, give me the commission. I forgot to tell you I called in 100 favors, you won't retain one of these accounts after the first keg is blown and I don't know how many of those expensive tap handles we will get back but I made a great commission so it ain't my problem. Get it?

I'm not saying your guy is that low down or whatever... You can commission him on every case and keg that goes through the distributor, but that's donk too. Do you want to be writing a check every month out of your cash flow? What if you need to sell say 500 barrels to show a profit or justify your guys job, but you only sell 350? Why pay a spiff if you aren't hitting target? Determine a number in barrels or case equivalents that you will be happy with, and shoot for that. Pay a bonus at the end of the year if it's hit.

You should be paying your guy a decent salary and some kind of car allowance. He shouldn't have to rely on a weekly or monthly commission to feed his family. Otherwise he may not act in your best interest. He may take in house taps cuz he needs the money. That will piss off your distributor. He may pull BS as I mentioned above with temporary accounts. You don't want these problems. Real breweries pay salary, car allowance and bonus. Be a real brewery. You can get excellent young help for say 36,000 - 42,000 a year. 15% to hit your goal isn't bad.

You are now in the game for the long haul. Don't try to micromanage who sold what or spend your time writing extra checks every week or month. Your guy is now your best asset and the face of your brewery. You want him making good decisions for the longevity of the brewery. I'm sure some of you guys out there have a commission plan. Whatever works for you man. I like my way. It attracts competent help and eliminates weekly guessing games as to can I pay my rent as a salesman for you.

I recently received a commission based offer with a $450 a week base. No mention of a car allowance. The guy spent 20 minutes telling me how his brewery will sink if he doesn't find success in my market which is the nearest city to him. He's several hours away in the mountains. I was quite insulted at the offer. Guy builds a 2 million dollar brewery and doesn't want to pay competent help to sell his brands. What the F do I care about $2 for getting you a case placement? now if you are going to pay me $2 for every case I sell, we can do business. That business will be me making all your profit.