Sales Rep & Brand Ambassador Compensation?

[VictorFL]

We're starting to ramp up our sales program and need to get more boots on the ground.  Curious what some other distilleries/brands experience has been with compensation structures for sales managers and brand ambassadors.  What's worked well?  What hasn't?  What's the relationship been like between in-house sales staff and distributor's sales force?  How much should we really be budgeting for sales force compensation?

[captnKB]

Hi Victor, Ive always set aside one third of my operating budget to go towards the sales team.

Dont count on your distributor selling a single bottle for you. Your distributor is there to distribute your product, it is your sales team's job to make the sell. 

On the compensation side of things I have found a pay structure that is heavily performance/incentive based for a sales person will yield the highest ROI.

[indyspirits]

59 minutes ago, captnKB said:

Dont count on your distributor selling a single bottle for you.

The corollary is, "Count on your distributor telling you they will be a brand ambassador for you and help move product"

[FireRoot]

We hired a sales team that took 10% of all our distribution sales for the state. We are in a control state, so everything is distributed through the state warehouse and sales people are separate. Unfortunately, they didn't really do anything for us. They have a portfolio with other brands and we didn't see a single new account open up, but we still had to pay them the 10% from the accounts we had previously opened. We had a short contract and once that ended my wife and hit the road and tippled our sales ourselves.

However, we cant be on the road all the time, so we are looking at getting brand ambassadors around the state. Anybody have brand ambassadors? Do you pay them a percentage of your sales and if so how much?

[Sudzie]

Running production is the easy part. Hire an assistant distiller and train them on how you want things done. Pay them a good wage and then get out and sell your product. No one on earth is going to do a better job selling the goods than the person that has the most skin in the game. 

[richard1]

True BUT, when one is no longer a spring chicken this becomes somewhat more challenging. !!

[Sudzie]

5 hours ago, richard1 said:

True BUT, when one is no longer a spring chicken this becomes somewhat more challenging. !!

All I can say at 62 yo and selfemployed for 44 of them is I have always lead by example. Set the tone of your company.  This can only be done if you are proficient in the tasks at hand. People want to get into this business because they want to run a still. Wrong reason in my option.  This business is 15% production (a young persons position), 5% facility mantiance, 5% logistics, 15% hospitality and 60% sales and marketing. So with that, this is actually a sales and marketing business that people find themselves in.  BTW doing production is physically more demanding than sales and marketing any day.....

 

To clear things up these are the definitions that we use for staff and S&M positions. 

Brand  Ambassador - Marketing; someone that promotes the brand and educates the end consumer.

Sales Person - Sales; someone that sells and promotes your products through your on premise and off premise distribution network. 

Inside Staff - Hospiality; someone that bartends, does tastings & tours, cleans, and is the smiling face of the physicsial distillery.

So, if you can find someone or several as we have that can do all 3 proficiently pay them as much as you can afford!

 

So now back to the question at hand.  Distrubtiors are the UPS/FedEx of your sales distrubtion.  In reality they will just deliver your product for a huge fee.  (Part of the business model).  You are the only one (owners) that will sell in reality. If you don’t, can’t or want to sell your products then you need to employ a substitute for yourself.  How much are you worth?  How much would you want to be paid to do a stellar job selling your product. And how much can your company afford to pay for your replacement? These are the true questions you need to ask yourself. Not others.  Each company has a different overhead cost and demands on real or implied margins.  We calculate $35 of the case profit for S&M support efforts. I have seen some figures go as high as $110 per case for a period of time to open a new market.  Ouch!   From time to time we will use non staff (ambassadors) to help out with events and they usually get $15-$20 per hour for the event and usually a nice dinner or lunch prior and maybe a drink after.  Always build camaraderie.   And in closing, don’t forget in business “you get what you pay for” and you “only get back what effort you put in”. Go full tilt buggy and sell, sell, sell!