The Most Expensive Case You Lose Is the Placement That Goes With It..

Alcohol brands spend a lot of time and money getting products onto a shelf, wine list or back bar. Losing that placement can cost much more than a missed case.

Consider a fairly typical independent account win:

• Three sales visits each valued at $100 to $150 in loaded sales cost for a total of $300 to $450
• Samples: $50 to $100 each account
• Follow-up, order coordination and administration: $50 to $100 for each account

Given the above list, a brand can easily invest $400 to $650 just to earn one placement! That’s before accounting for travel, tastings, promotions or the cost of generating the original lead.

Then there is the value of the account itself: A placement buying three $150 FOB cases per month represents $5,400 in annual supplier revenue. At five cases per month, it is $9,000. Keep that account for three years and the potential revenue can reach $27,000. That makes protecting placements incredibly important.

Why Good Placements Disappear

A lost placement does not always mean consumers stopped buying the product.

Sometimes:

• Inventory can be out of stock when the buyer needs it. Replenishment delays can turn a temporary inventory issue into a permanent replacement on the shelf.
• Distributor sales incentives work against an existing placement. A rep may be paid to place another supplier's product, creating an economic incentive to replace a brand that is already in the account.
• Portfolio priorities change. As distributor portfolios become larger, smaller brands compete for limited sales attention. Less attention can lead to lower velocity, which can eventually lead to SKU rationalization or a lost placement.
• Sometimes (especially lately) the distribution system itself changes. Distributor transitions and consolidation disrupt ordering, inventory and account relationships. Recent industry reporting has documented smaller brands falling through the cracks during these transitions.

The Real Cost of Losing One Account

For a brand with a $150 FOB case:

Losing a five-case-per-month placement does not just mean losing the next $750 order. It can mean losing a $9,000 annual account, the $400 to $650 originally spent winning it, and the additional time and expense required to replace it.

Distribution Should Help Protect the Placement

At LibDib, we believe earning the placement is only half the job. Keeping it matters just as much. Our model gives makers visibility into their placements and depletion activity through LibSights, so sales teams can identify accounts that need attention and opportunities for growth.

Maker sales teams work directly with their customers and enter orders directly into the LibDib platform. Our demand-driven logistics model is designed to fulfill the orders those teams generate without requiring the account to compete for the attention of a traditional route salesperson.

Because the most expensive case a brand loses may be the one that costs them the account.

Protect Your Placements

Our Maker team can help you set up a distribution strategy that protects what you’ve worked so hard to create. Reach out to us today at makers@libdib.com to see what works for you.