“We sleep better at night knowing we have assisted small business in a meaningful way every day”.
Speakeasy Wins and Spirits wants to make sure you can make the best decisions with whomever you choose to work with in the US Market
Label Approval and Importer noted on the bottles and cases-a necessity for your brand to enter the US Market-TTB approval, importation and compliance are mandatory. A SKU is also part of the compliance process for every bottle. Every state is different and requires unique licensing.
Hiring a Broker: your brand can hire a broker in the US Market, pay commissions and have a broker place your brand with distributors either regionally or nationally. Most are compensated with a commission (average 8-12%). This can be a great way to market your business, and Speakeasy WS can offer referrals to trusted brokers.
Speakeasy Wine & Spirits is compensated with a monthly retainer-based service. We compensate our own people to execute quickly. Our trusted representatives have profound relationships both on and off-premise. If your business is not wishing to hire an employee for the US Market and pay employee benefits, payroll taxes, workmen’s comp, and other fees, your brand seeks a company like us. We are “sourced out supplier reps” for your brands regionally, nationally or state specific.
Distributor Placement vs US Warehousing: The frequent downside with distributor placement is a waiting game with a 3-Tier system. Once your brand is placed with a distributor or distributor network, they typically will order “JIT” just in time inventory. The days of shipping huge quantities can be unrealistic expectations. A new product does not garner large quantity buy-ins with an unproven brand. Another option: you place inventory in a US warehouse, whereby the distributors in any market can dictate what they feel a buy-in should be and pick up from a warehouse. Typically, this will occur on the East or West coast. Other markets like Texas where the taxes are lower is an option, but most distributors prefer the East or West Coast. They pick up more frequently from the Eastern or Western markets-typically New Jersey, New York or California.
Brand Developers can place your brand at a “Park Street “for example, which is a warehouse, delivery service in FL, CA and NY. Park Street can deliver to restaurants, retailers, and distributors. For example, a Texas distributor would pick up at Park Street in CA. We would place your portfolio in distributors however we do not rely on this time-consuming process to build a brand. Speakeasy Wine & Spirits goes down every road: we have the ability to go direct to the retail chains and succeed with the placements. This is what we call “backdooring” a brand. Placement at a distributor can be an arduous waiting game. The distributor decides if they wish to pick your brand and sell it. They are very particular about what they represent since there is so much competition in the US Market.
Distribution Options: A distributor can represent the brand, whereby a sales force presents and sells your product for a higher % (average wholesale margin 30%+). A clearing model is an option whereby the distributor accepts the goods and delivers without their sales force representation. A lower % (average 15%) and the mark up is passed along to the retailer. Retailers like to make a 30-45% mark up on any brand, so the clearing model is enticing to many retailers. The retailer makes more money on your brand and is likely to pick up and sell it vs any competition whereby they are making less margin. Options such as Park Street is ideal for many brands. Park Street does compliance, importations, and delivery, and are open for distributors to pick up product from their own warehouse
Distributors with a new brand are not going to order in containers. They are going to order “JIT” just in time inventory. They are going to order very conservatively until proven. Therefore, it is hard to forecast volumes/case goals at the onset of execution. Choosing a brand developer, broker or distributor to execute quickly is key to your success.
“Going through the back door”, placing brands across the country in chains which enables the volume to build in a matter of months. Then a Park Street can deliver to the actual account in NY, FL or CA for instance. Another option is a distributor to have them pick up your brand and be represented by their salesforce or “clear” and deliver at a smaller margin.
It takes time to build a brand in the US Market. Though your brands are unique, it’s an investment and realistic budgets need to be set up accordingly prior to execution
Ideally, you would warehouse on the East or West coast, be able to have a warehouse that can ship direct to clients or distributors, and house inventory here in the states. This way you have state-side inventory and re-orders would be easy for all involved. When the volume is built, many businesses can go (DI) with your brand. Direct Importation is purchasing in quantity (containers) directly from your point of business. This results in lower pricing passed onto the wholesaler and retailer to make higher margins.
Ratings and Reviews: You will need ratings on your brands immediately. Consumers want to feel secure in a purchase knowing the brand has “pedigree”. Go with a brand developer that can direct you to the most influential rating and review sites. A directory is provided on this website to ensure the most reputable journalists, trade tastings, competitions, and reviews. PR and Media are of utmost importance. Plan on spending about $1000.00 for an initial Press Release launch announcing your brand in the USA. The press release will be focused geo-targeted to Trade, Industry, and Media, who can promote your unique story to the US Market.
Point of Sale Materials: Point of sale materials encompass retail shelf talkers, bottle neckers, recipe cards, back cards for floor stacks and much more. Make sure you go with a Consulting brand developer who has these services, along with Press and Marketing development
Find a Brand Development Company with a trusted broker network to execute the needs of the brand’s growth. This is a question you want to ask up front to ensure coverage for the growth of your brand. Make sure they can execute quickly. It is common to take 30-90 days to make progress with retail chains.
It is vital you find a broker or brand developer that appreciates every dollar you spend in the US Market like it is their own.
Find a Brand Developer that has a strong relationship with a distributor network and chain retailers.
Solid US Web Presence and SEO: Your website tells your profound story of the blood, sweat, and tears that went into creating your unique and distinctive brand. Make sure your website is relating to the US Market, in many instances it may not be and will need to be updated to reflect your USA presence. Make it easy to navigate and find the information on your site. Search engine optimization (SEO) is also important for the distributors, retail and restaurant trade to find you along with consumers. We recommend companies like https://www.webolutions.com/
Budgets: The US Market is a “monster” full of competitors for brands like yours. We not only want you to make sure you go into this project prepared, but you do need to have the budgets to back up your continued success.
A realistic, very conservative budget is $40K-80K to build a new brand in the US. This budget is vital for your brand to thrive. Some of the expenses will include, warehousing and delivery services, marketing dollars, distributor support, retainers to your broker or brand development company, and consumer pull through.
Examples of where your budgets will be spent:
Promotions: If your brand is placed for example in Texas at Specs Liquor stores (with 200 locations) https://specsonline.com/, for example, Specs places your brand in 40 stores initially, demos are going to cost around $5K, in 40 stores a month. ($40.00 an hour per Brand Ambassador). Your brand would probably need at least 2 months’ worth of demos, wet or dry or hand sellers. Retail chains expect the supplier (you) to build the brands. Stores no longer have the time to build your brand. Demos and hand-sells are vital to consumer pull through.
Influencers and Brand Ambassadors: An Influencer is a person that has their own following and can message the mass market and introduce your brand. Typically they have tens of thousands of followers on Social Media like Facebook, YouTube, Linkedin, Twitter, and Instagram. Brand Ambassadors may not have the mass following but they are your mouthpiece and manipulate consumer purchases.
Hand Sells-Demo professionals to stand in the aisles and hand sell your brands to consumers, known as a “Dry Demo”.
Wet Demos-Sampling consumers on your brands in a retail store or restaurant
DTC-Direct to consumer-websites that sell direct, another option for your brands
On Premise-Restaurants
Off Premise-Retail Stores
PO-Post Offs-immediate discount given to a distributor on a shipment of goods
SPA-Special Purchase Allowances-given to a distributor to purchase more quantity
DA-Depletion Allowances-given to a distributor, the more they sell, the more dollar support your brand gives a distributor by the case
OND-October, November and December where approx. 70% of the business is done for the calendar year in the US Market
FOB-Freight on Board-your cost per case
Landed or Laid In-your cost+ freight and taxes that a distributor calculates prior to getting to their List Price
List Price- the distributor markup prior to discounting the product to the retailer or restaurant
Margins-typical % of profit a distributor or on or off premise account will make
Mark-up- work on % markup instead of% margin, need to clarify before working your strategy.
Shipments-actual total cases shipped
Depletions-how many cases are depleted (sold) per month or year which a distributor should report monthly
JIT-Just in time inventory-the # of cases a distributor will order since they do not want to carry too much inventory
Terms-typically a distributor will ask for 30-90 days terms. The distributor will ask for extended terms like 45-90 days with a new brand to pay their bill. The money will be facilitated through an Importer and the Importer will pay the bill to the supplier (you).
Clear vs Distribute-a distributor not representing a brand with their sales staff, but clearing and delivering for a supplier, thus taking a smaller margin (example 13-18%) instead of their regular margin of 30%.
DI-Direct Import from your business to the distributor, typically a healthy discount given to the distributor to make more money on the brand. This typically only works with a brand that is built or has a high rating.
Importation and Compliance-what you will need prior to entering the US Market
Label Approval-TTB- https://www.ttb.gov/offices/alfd.shtml
Padding-increasing your FOB to support the broker on commission, we don’t necessarily recommend this route, use your marketing budget to fund a brand developer
Sourced out supplier rep-a brand developer that works on a 1099. Their business pays their own taxes so your business does not have the cumbersome payroll taxes, employee benefits, or workman’s comp fees.
Brand Ambassador-A demo, hand sell, event person that promotes your brand. They can also take the form of managing your brand in markets
Cross Market-cross marketing with an established brand for quick brand recognition. This typically costs money to do this but can be well worth the spend.
PODS-Points of distribution, how many placements your brand has in stores or restaurants
Organic Marketing-Social Media, clubs, and type of promotional venue, for example if you represent a Whiskey brand we will find cigar shops and Men’s Hair Salons to cross market and organically market your brand. If you have a Champagne we will organically market with Bridal Shops.
SEO-Search engine optimization makes it easy for consumers, retailers and distributors to find your brands. This is website or brand (word)optimization so if a consumer or retailer types into Google for example Whiskey-your brand may come up on the first or second page instead of the 10th page. Research shows a consumer does not go past a 2nd or 3rd page.
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