Has anyone here worked in beverage distribution?

Rick Lee · Rick Lee's Garage

I have an opp to buy into a protected territory (100 mile radius in Phoenix) for Pur Beverages. It's a pretty low cost of entry, around $15k, and I'd get $38k (retail) worth of product to sell. I'd be pretty much on my own, pounding the phones to get appointments and then trying to get retailers, bars and distributors to buy lots of product. I've done sales for a long time, am very used to pounding the phones to get appts. and then going out to meet prospects and customers. Previous Phoenix rep. had a heart attack and moved away. Seems like, even if I couldn't crush this, I'd at least be able to get my investment back after a few weeks of hard work. They have a warehouse in Phoenix and I'm going to pick up three cases of samples scope the place out tomorrow. My bands gig in some local bars, so I know I can always talk with those owners for advice. Anyone have experience with this stuff?

vash · vash's Garage

does drinking it and peeing it out 15 minutes later count ?

McLovin · 10-20-2015, 04:34 PM

1) Read the contract very, very carefully, make sure you understand every provision (I can tell you without seeing it that it is going to very one sided, against you. The only issue is how one-sided).

2) Get someone who knows contracts to do the same for you.

3) If you go forward, get it carried at your local Costcos. That should do it!

masraum · 10-20-2015, 04:41 PM

I was a bartender for almost 5 years when I was younger, but I don't think that's what you're talking about.

Rick Lee · Rick Lee's Garage

Ok, got my three cases of samples today, handed a few off to friends to try out, had another hour-long call with the owner and read through the contract with a highlighter pen. The catch is that, after the first 90 days, I am required to purchase three pallets per month, which is 300 cases of 24 11.5oz cans. Obviously, I need to be selling at least that much anyway in order to make some money at this. Will look into the Costco thing, but owner says independent grocers are where it's at until a dist. picks me up. Probably gonna pull the trigger on this, as I'm flush with cash after the 993 sale, and can't bear the thought of going back to work for the man. I really look forward to getting to work on this.

impactbumper · 10-20-2015, 05:24 PM

go for it. Love the hustle.

stomachmonkey · 10-20-2015, 05:27 PM

After my FIL sold his businesses and buildings he bought a Wise territory to keep busy for a couple of years till he was ready for retirement.

Worst part was delivery and replenishment.

You sell the stuff, how does it get delivered?

The last guy who had the territory, he had established accounts, how much a month was he moving?

patz · 10-20-2015, 05:28 PM

You will likely be paying off the manager or owner to take the stuff. Back in the day the under the table pay off was called "schmiess"? My Dadz (shut up Sid) was in the Liquor and Wine wholesale biz for 40 years.

KFC911 · 10-21-2015, 02:53 AM

So what the heck is it...some type of energy drink? Good luck Rick!

You'd go broke on me though....middle man distributor in the bar biz for decades...almost exclusively bottled beer while listening to a band

Shaun @ Tru6 · 10-21-2015, 04:20 AM

Quote:

Originally Posted by Rick Lee

Ok, got my three cases of samples today, handed a few off to friends to try out, had another hour-long call with the owner and read through the contract with a highlighter pen. The catch is that, after the first 90 days, I am required to purchase three pallets per month, which is 300 cases of 24 11.5oz cans. Obviously, I need to be selling at least that much anyway in order to make some money at this. Will look into the Costco thing, but owner says independent grocers are where it's at until a dist. picks me up. Probably gonna pull the trigger on this, as I'm flush with cash after the 993 sale, and can't bear the thought of going back to work for the man. I really look forward to getting to work on this.

Entrepreneurial spirit, great. But required to purchase 300 cases per month is not working for the man, it's being used by the man. Seems like an Amway thing.

It's these guys, right? Pur Beverages - A Healthy & Natural Alternative to Modern Energy Drinks - Pur Beverages - Healthy, Natural Energy

While a cactus may pose a problem, you're a smart guy Rick and I'm sure you can do something better than hustling a new entry into a very crowded market by a water tap filter company trying to branch out because Target sales are down.

Here's another way to think about it. I'm sure you can get X number of stores to buy a case to try it out. How many customers will go past the 20 other waters, plain and flavored, the top 10 of which are paying for product placement position in the 7-Eleven fridge and grab a can of Pur on a monthly basis?

If you can make the math work (I would make a few consumer consumption models), then it could be a good venture. I would talk with several and different kinds of retailers to see how much they are moving per month of Pur's competitors.

Who are Pur's competitors?

Eric Coffey · 04:44 AM

Quote:

Originally Posted by Rick Lee

The catch is that, after the first 90 days, I am required to purchase three pallets per month, which is 300 cases of 24 11.5oz cans.

Just looked them up and it smells a little bit like another “superfruit” beverage, not-quite-MLM deal (Nopelea, Vemma, MonaVie, etc.). The heart attack story sounds fishy as well. I'd want to talk with the previous rep to verify and get some insight.
Regardless, the recurring purchase requirements and buy-in costs seem unreasonable, and would be a non-starter for me personally. In addition to the initial $15k territory buy-in, you would have a minimum monthly burn of $3,528 (300 cases/month @ $.49/can) after 90 days. That's just for inventory, not including any additional overhead/expenses. You would need to move at least 15 cases a day starting out (based on a 5-day work week) just to prevent backing up in inventory. Otherwise, storage may become an issue.

Even if it is a "premium" beverage, it doesn't have much (if any) brand recognition/strength at this stage. If this was a Red Bull or Monster distributorship, I'd say go for it. As it stands, you would be selling a no-name health/energy drink to retailers at what, $1.00-$1.50 per can to cover all expenses and make a decent profit? If so, the price that a retailer would then mark it up to doesn't seem palatable as a consumer. Keep in mind that retail shelf/fridge space is golden, and the beverage industry is fiercely competitive and over-saturated. There are countless beverage companies out there, all fighting for the same space, from indy c-stores to grocery chains and big box retail.

Quote:

Originally Posted by Rick Lee

Will look into the Costco thing, but owner says independent grocers are where it's at until a dist. picks me up. Probably gonna pull the trigger on this, as I'm flush with cash after the 993 sale, and can't bear the thought of going back to work for the man. I really look forward to getting to work on this.

Costco, Kroger, and Walmart are the brass rings. You probably aren't even getting a meeting unless you know someone, and that's if you are the manufacturer/company principal or their direct intermediary. The big guns are all about supply chain efficiency, so ANY middleman (that they don't own/operate) is usually out of the question. Also, you would basically be a distributor with this. So any other (larger) distributors interested in picking you up would want/need to be paying what you are paying. Again, it sounds like several other products out there that use the business model of adding an unnecessary link in the retail/supply chain. I'd rather be a 1099 sales rep for the company, brokering deals with grocers, c-stores, and large beverage distributors, instead of being an "independent distributor" required to buy product (again too much like MLM to me).

Really, the only way I would consider it is if the buy-in included established routes/relationships and a healthy book of business to build off of, especially if you are going to be contractually bound to recurrent product purchases. If the previous rep was successful and only left for health reasons, it should be easy enough to confirm his previous/existing accounts (and I’d want to see financials). YMMV!

Shaun @ Tru6 · 10-21-2015, 04:42 AM

I think you will find that Big Box stores are corporate accounts or there is one person/regional people who only do Costco, Walmart, etc.

john walker's workshop · 10-21-2015, 05:24 AM

I'd bail. Doesn't sound good, especially the $15K buy in part. Kinda like the old pyramid scheme.

MRM · 05:44 AM

It's almost impossible to break into distributing a new product unless you're already an established distributor. The reason he's telling you to market independent groceries is that the chains will not buy from you. Their purchasing is controlled by corporate home office who buys only from specific distributors and stocks only approved items. You will not be able to sell to the local Costco. You will not sell to any chains, period, and that's what you need to do to sell enough product to be profitable.

You will be stuck literally going from Kwikee Mart to Kwikee Mart with a case of product in your trunk, trying to talk to the clerk behind the cash register to find out who has authority to buy for their store. There are ten people a day trying to sell these independent shops a new product. They do not welcome the attention and do not make it easy to find the buyer.

Maybe you can set up a stand at county fairs and sell it at farmer's markets. That's about the only way you'll sell anything. This is not a good opportunity.

nota · 05:57 AM

don't you have to
BUY SHELF SPACE
TO GET IN A BIG BOX/SUPERMARKET ?
super/box stores are a closed game unless you pay to play

http://bizshifts-trends.com/2014/05/18/war-retail-shelf-space-battle-shelf-placement-fight-low-slotting-fees-position-mindshare/

smaller independent grocers may not want cash for space
but will want a cooler like red bull will give them
do your guys even have coolers ?

btw how much ad volume is the PUR corp spending

McLovin · 10-21-2015, 06:04 AM

I agree with a lot of the above warnings. That's why I said to read the contract carefully.

And my Costco suggestion was a joke (that's why the smiley face following it). The odds of you, some dude off the street, getting something carried by Costco is zero.

Rick Lee · Rick Lee's Garage

Thanks for all the replies. I rarely get email notification, so I just saw all this.

First, yes, I spoke at length with the previous rep. He's the one who told me he quit due to health reasons, not the owner. He went into great detail, enough that I want to clean up my own life a little after listening to that.

He broke into Albertson's, which is HQ'ed out here, and the owner flew down to help him with the deal. That easily covered his purchase quota, but Albertson's first wanted a hefty fee for the shelf space. Owner negotiated that away, but then Albertson's got bought and BK'ed. I don't know their status now, but shop there all the time and Pur is not on their shelves anymore.

I've heard from several places that Costco is not that hard to get into, that they'll give a listen to most and you have to do your own in-store demos and sell what you can right then and there.

Both owner and previous sales rep. said cold call visits do not work in this industry, that you have to pound the phones and set appts. I have long experience in that and have no fear at all in that area. My concern is getting them to buy and in large enough volume to make some money at this.

I'm not into the whole energy drink thing at all, have never had a Red Bull or Monster. I drink Powerade after workouts, but that's the extent of it. But I know those types of drinks really have an audience.

McLovin · 10-21-2015, 06:22 AM

Well, worst case scenario, you'll be extremely well hydrated.

stomachmonkey · 10-21-2015, 06:31 AM

FWIW, the only use that I know of for those types of fruity beverage products is as cocktail mixers.

For 1/5th the investment you could bottle and sell your own water.

Rick Lee · Rick Lee's Garage

Quote:

Originally Posted by stomachmonkey

FWIW, the only use that I know of for those types of fruity beverage products is as cocktail mixers.

For 1/5th the investment you could bottle and sell your own water.

Yeah, I see that a lot in bars too, though have never used one. I will talk to two local bar owners today, where my bands sometimes gig. They'll certainly give me a straight story as to how receptive they are to such vendors and how much of and what kinds of those products they run through.