What are the biggest challenges that face Beer, Wine and Spirits Distributors? Our Chief Product Officer Steve Peppler gives us his take on the modern pricing challenges transforming the beer, wine, and spirits distribution industry.
Every country has its own rules and regulations for Beer, Wine, and Spirits Distribution.
Distributors need a system flexible enough to follow or take advantage of any regulatory requirements.
Having functionality to resolve pricing around requirements such as minimum pricing, discounting laws, liquor taxes and how trade promotions work such as free goods and samples.
For example the US is complex with each individual State having different regulations.
Customer expectations have never been higher for getting the best deal possible from a distributor.
Offering 10% off an order is no longer enough to sway customers. Distributors want to increase the complexity of discounts on offer but too often do not have the flexibility with their ERP.
Being able to offer cascading discounts would be a big advantage and with a system in place to manage the activity, there is little risk to margins.
Also offering upcharges for split cases, or discounts for pallet purchases is becoming a necessary option to stay competitive.
As a distributor knowing what you are owed from your supplier rebate programs is a growing challenge.
Distributors are offering their own deals or deals that are subsidised by their vendors and passed back for payment. Yet, they are managing this activity with no real visibility on how it affects margins.
Without full visibility of their vendor rebate support distributors are unaware of their true deal margin.
More and more distributors are adding craft beers to their portfolios to take advantage of higher margins.
Increasing product variety, also adds yet more complexity to the supply chain.
Distributors need technology that simplifies pricing, automates promotional pricing and supplier charge-backs.
New technologies can capture charge-back details accurately and give suppliers transaction-level bill-back detail.
Distributors can also automatically calculate charge-back amounts and generate bill-backs for samples and incentive programs.
For some, the challenge is managing the volume of small sales they have and for others; it is updating prices across all channels in real-time.However, being able to confirm the prices before they create the order is equally crucial.
If a distributor receives an Electronic Data Interchange (EDI) order from a large retailer, they need to compare their pricing to the order and add any discounts or promotions.