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Thread: Brewery Sales Rep & Wholesaler

  1. #1
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    Brewery Sales Rep & Wholesaler

    Hi all

    Looking for info on how others have setup an “in-house” sales rep and how that relationship works with a wholesaler. Currently we only have sales reps that work for the distributor, ie they peddle the entire portfolio. We are considering the addition of a part time sales rep who is employed by the brewery & establishes new accounts and maintains established accounts including introducing new products more reliably than the wholesaler.
    All products sold would be sent through the wholesaler to maintain compliance with the 3 tier laws.

    My questions to those who currently do this:

    If the brewery sales rep makes a sale:

    • does the price to the wholesaler change considering the exclusion of sales effort?

    • does the sales person receive commission and if so how is that paid for?

    •after the initial sale how is the account not taken over by the wholesaler rep cutting in? (I would assume it’s a contract language thing)

    Thanks & Merry Christmas!


    Sent from my iPhone using Tapatalk

  2. #2
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    Wow. You really know nothing about distributing through the 3 tier system.

    #1 No, the price does not change.
    #2 Totally depends on how you compensate your saleswoman.
    #3 What? The wholesaler rep "cutting in?"

    The wholesaler calls on the accounts generally from a pre-sale route. They deliver the beer and collect the money. They obviously buy the beer from you first. It doesn't matter who sells the account, the process continues as above. Most breweries have reps who work the market alone or hand in hand with the distributor. You will need to figure out how you are going to communicate to your wholesaler if your guy is working alone and makes a placement. For you, with your lack of understanding, I am very worried you will find a way to piss off your distributor. You don't seem to understand the relationship and team effort.

    Hire someone. When they go get an account on their own, call up your wholesaler and tell them not to cut in and take over. Let us know how that goes for you.
    Last edited by BeerBred; 12-25-2017 at 06:07 PM. Reason: political correctness

  3. #3
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    Quote Originally Posted by BeerBred View Post
    Wow. You really know nothing about distributing through the 3 tier system.

    #1 No, the price does not change.
    #2 Totally depends on how you compensate your saleswoman.
    #3 What? The wholesaler rep "cutting in?"

    The wholesaler calls on the accounts generally from a pre-sale route. They deliver the beer and collect the money. They obviously buy the beer from you first. It doesn't matter who sells the account, the process continues as above. Most breweries have reps who work the market alone or hand in hand with the distributor. You will need to figure out how you are going to communicate to your wholesaler if your guy is working alone and makes a placement. For you, with your lack of understanding, I am very worried you will find a way to piss off your distributor. You don't seem to understand the relationship and team effort.

    As far as compensation I stongly suggest salary, car allowance and expense account. I don't think you will move enough boxes to warrant someone making a living wage on commission with you. Furthermore, I suspect you would argue why your girl gets the commission eventhough the wholesaler "made the sale."
    The real world small brewery/distributor relationship in some jurisdictions is more fluid than your rigid interpretation of the three tier system. Do not assume the open nature of my questions as a lack of understanding. Furthermore also do not assume that the sales person is or is not a woman or a "girl" as that point is unresponsive to the question.

    Here are the questions again with further clarification:

    Question 1: "Does the price to the wholesaler change considering the exclusion of sales effort"

    If a brewery/wholesaler price is determined based on the a portion of the sales margin contributing to distributor sales rep commission is it reasonable that the sale price would change in the if the rep working for the brewery establishes the initial sale and account maintenance vs the wholesale rep.

    Question 2: " Does the sales person receive commission and if so how is that paid for?"

    Commission can be determined by individual sales, volume sales or goals or some combination...are there advantages or disadvantages to the different models?

    Question 3: "After the initial sale, how is the account not taken over by the wholesaler rep cutting in"

    Assuming Question 1 is answered that the sales price does indeed change based on who makes the sale and maintains the account and that the wholesale rep, that may also cover that territory or route, would not be eligible for the commission but rather the brewery sales rep what mechanisms are used, IE contractual language that establish protections for the parties.

  4. #4
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    I have worked in this business since 1991 in at least 16 states. If you are saying that you have or have heard of an agreement where a distributor would change the amount it pays a brewery based on who's employee sold the beer, that would be shocking news to me.

    Are you saying this is true?

  5. #5
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    Quote Originally Posted by BeerBred View Post
    I have worked in this business since 1991 in at least 16 states. If you are saying that you have or have heard of an agreement where a distributor would change the amount it pays a brewery based on who's employee sold the beer, that would be shocking news to me.

    Are you saying this is true?
    I think the question isn't being relayed clearly let me see if I can do a better job

    Here is an example

    Brewery sells a 1/6 keg to distributor for X

    Wholesaler marks up that keg 40% to an account for a sale price of $Y to the account

    The markup covers the distributors costs for storage, drivers, vehicles etc. A portion of that amount also is applied to sales commissions for the sales representative

    who makes the sale and maintains the account.

    So in this example if a brewery employed sales rep begins making new sales and maintaining accounts how is that commission paid to the brewery sales rep vs paying

    the distributor rep?

  6. #6
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    Sir, I understand the question. I stand by my original 3 answers.
    Unless there is some funny business going on, the answers are the same. It doesn't work the way you want it to.
    You pay your rep with whatever deal you can negotiate. The distributor is still going to pay their rep and rightfully so.
    Any attempts you make to get around this or otherwise isolate the distributor and their reps are going to severely backfire on you.
    You need to view the distributor as a partner. What if the distributor rep has been trying to get you on tap in account xyz for 5 weeks talking up your brands and saying how magic your sauce is and one day your rep walks in there on the very day the account is ready to switch to your brand because the keg they were waiting to drain finally drained and the account says "yes let's order it now". Are you going to claim that your guy won the handle and you therefore want a discount from the wholesaler? If i was that wholesaler rep and you tried to pull that shit on me I would MF you all over town and never sell your beer and see to it no other rep or account did either. The distributor rep is in these accounts generally once a week. You can't provide that kind of coverage or build the relationships with all accounts like the wholesaler can. See what I'm saying? Not the way to build relationships in this business.

    Maybe having a brewery rep is not for you, at least at this time. There is another avenue you may pursue... See if your distributor will do a sales incentive. They aren't as common these days, but they're still alive. By the way, your wholesaler should be "co-oping" all your tap handles, post off's, pos etc. They should co-op a sales incentive as well.

    * New case placement $5 with a buck a case for the next 30 days. Qualifier: account must re-order
    * $20 per new draft line with the same qualifier

    Note; draft incentives are tough these days because of the rotational nature of draft business.. Another reason you want that distributor guy on your side, he's in there every week and you aren't. Don't piss them off. They don't need you.

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