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Off Premises quanity buys


Big Poppa

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Our distributor does a very nice job with selling our products right now he wants to offer quanity buys to off premise retailers what is reasonable discount to offer to these places he threw some ideas to me but, I really hate giving away the farm or do I have to have a different attitude toward this concept.

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If you have the stock and won't be pulling it away from more profitable channels, and your distributor has willing customers, then you should not hesitate to take it; that's the Holy Grail of the industry. Retailers only make quantity buys when they are confident they can sell the merchandise through, quickly and at a nice profit. That's nothing but good for you because the retailer will do everything in his power to make sure everyone who walks into the store walks out with a bottle of your stuff. I'm guessing you want that. If you do, then say yes immediately.

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  • 2 weeks later...

In my experience, you have to be careful with this. Some retailers will buy a quantity, but then they will undercut the price of your products as against their competitors, which will tick off those other good customers and potentially drive down the value of your brand or the perception of your brand in the marketplace - I see this somewhat often with less-well-known brands. A big brand has a "street value" so they'll take the higher margin if they get a deal, often, but on a lesser-known, they sometimes don't.

Just be aware that your distributor is not looking out for the long-term value of your brand - only you are doing that, and they will suggest/encourage things sometimes that aren't necessarily the best strategy in the long run. They are, after all, looking to maximize the # of cases they move. Sometimes it can make sense, but you should understand/analyze it.

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  • 3 weeks later...

I offer QD's for our wine brand. It allows the chains to undercut independents. Normally with a QD the distributor will offer the chain 6 to 12 dollars per case off your every day low price(EDLP) You will have to negotiate with your distributor on the depletion allowance you will provide. Generally the distributor will eat part of the QD by taking a lower margin and you eat the rest through a DA. So if the QD is 6$ you may have to provide a 3 or 4 dollar DA. If you are going to give that kind of discount I would want at least a 8 or 12 case deal.

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