Tuesday, July 9, 2013

Distribution Model?

As I read a recent Seth Godin post * it brought me back to my wine days and the insanity of distribution and the games played in the pursuit of making suppliers happy.
He laments not seeing any of his books in any airport bookstores during a whirlwind tour.  After sharing this news with his publisher, "Someone wrote back, 'Seth, if you tell us which airports you'll be visiting, our salesforce says they will do their best to have your book in a place you can see it.'"
Clearly not what he was after.
The wine market often functions in this same dysfunctional way.  Regional or national representatives come to town and the local distributor for the supplier's products tries to find out (or control) where the rep is staying and eating to guarantee the wines will be available.  In some cases this is appropriate - go support those who are supporting you - but this is not always how it works.
What if the chosen restaurants have no interest in the products?  What if the wines have never been presented?  Then the give-aways begin.  I remember a local rep for one of the two big wholesale companies in New Orleans walking into Martin Wine Cellar, where I worked, and offering us a free four case stack of $13 a bottle wine if we would display it for a few days while a market survey was conducted.  He went further and told us whatever we sold could be profit for us and they would pick up the remainder next week.
Never mind the illegality of selling alcohol on consignment in Louisiana.  Never mind that he knew no amount of sales was going to magically create a "permanent" stack of the wine in the store. The company was creating false success for the survey.  They do deplete more bottles from inventory but they are not building a sustainable distribution model.  They are building, as Seth says, a Potemkin village (the link is here because I had to look it up).  I always pictured a set from a western movie, storefronts, but no insides, just support beams to keep the facades from falling over.
In restaurants, the same thing happens.  "Could you feature this wine by the glass this week?  We'll give you a case."  Or perhaps, "We'll give you four bottles and reprint your list for you if you could add this wine for a few days."  There is always this lonely, outsider grasp at hope that the wine will be so successful that the placement will remain and the outlet will actually order (and pay for) the wine in the future.
This is the teenager doing favors for someone they have a crush on.  In my experience, these efforts go unrequited and your time and energy is much better spent doing almost anything else.  Don't waste your limited resources on those turning a deaf ear, find prospects willing to listen and join your team.  As Seth puts it: "Don't save the canary. Fix the coal mine."

* If you don't follow him, you should.  He has a brilliant way of getting to the heart of the matter and focuses on distilling ideas down to simple concepts.  Many of his posts are like snacks for my brain, a short read but plenty to consider.  He is an impressive businessman, a programmer, an author, a traveler and explorer and, perhaps most important of all a questioner.  I think of him as a paradigm of the new modern technological Renaissance man.  Seth's Blog

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