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Hey All! We're working on our First ADA distributor contract. An ADA in Michigan is an Authorized Distribution Agent. They are the only people we can sell to and use to distribute our product. This particular ADA also functions as a broker and helps sell / promote the product. That is while you'll see those numbers split out. As we navigate this, we'd love some feedback and are willing to share some numbers to benefit the whole. As an ADA -Michigan’s term for an Authorized Distribution Agent ie.. Distributor Delivery Charge $10.00 per case ($7.50 paid to supplier by the MLCC with supplier paying an additional $2.50 to ADA Monthly Storage Fee $0.20 per case per Month (For product older than 90 days) Special Handling Charge $0.75 per case (i.e. handling, repackaging, labeling, coding, returns) As a Broker Commission - 10% per 9L(12 btl) case. Bonus of - 5% per 9L case above X volume. I see the ADA Fee's being in the right ballpark, but maybe a little high. As for Broker Fee's, It seems high. Is anyone else seeing this high of a fee?
Lassiter Distilling Co posted a topic in StateAfternoon folks. For those of you in NC, did you represent yourself when presenting your products to the ABC in February? If you did, did you have to obtain separate permitting with the federal government to have a basic permit that covers your representation of suppliers in NC before applying for the broker permit? We'd like to represent ourselves, but are having trouble understanding what's required to serve as our own representative. I've spoken with some very smart brokers, but cash flow is obviously a consideration for a startup. If you went with a broker, what worked/what didn't?
I signed a simple contract with a broker not long ago - they represent and promote our products, and we pay them a fixed % of the selling price (as a broker they don't take possession of the liquor). I guess that I may be a little naive, but I thought that for this payment, they would promote our product at bars, restaurants, and in stores. Now they are proposing a two month program where we would pay additional money for performance: $ for each menu, $ for each new bar restaurant, $ for each display, etc.... My opinion is that this is what I have been paying them for already. I know that programming is normal in the industry, but is it typical for a broker to be paid these incentives on top of the agreed upon rate?
So, it's safe to say that wholesale mark up in open states is generally 30%, correct? In control states in which the state acts as a wholesalers, how do brokers (operating as a wholesaler sales force) make money? What is a typical broker fee per case sold? Percentage or flat fee? Example: RNDC, Southern, Glazers, Heidelberg all (or most) act as brokers in Ohio, PA, WVA, VA, MI, Iowa. They don't physically deliver, but have a sales force representing brand portfolio's from multiple suppliers. What kind of margins are they working on?