Somebody has to get the product into the retail stores. It's a different business. Cases of beverages weight about 20-40 pounds. You make about 15-25 deliveries a day. Each account buys 10-15 cases of beverage products per stop. Distributors typically work on about 25-30% gross profit. which is about $2.50-$3.50 on a case. Some items like bottled water are very competitive and you might have to work on less. Some exclusive items can earn you a little more. At some point you will have a mix of products and you'll be able to calculate your average profit per case. Basically, figure 1/3rd of the profit is selling expense, 1/3rd towards delivery expenses and the remaining 1/3rd covers the warehousing, office, phone and your profit. Driver sales operations figure 60-66% of the profit go to the operator who has two jobs-selling and delivery and also is paying all those expenses for the truck. If you plan to pre-sell accounts yourself and then eventually hire a driver working a salary and/or commission to load the truck, make deliveries, collect the money, you need to maintain a the cost structure of 1/3rd, 1/3rd and 1/3rd. You have to work efficiently and build tight routes so you can service one area efficiently without doubling back and forth across the landscape.
It's generally a cash business with most accounts paying you COD. Some larger accounts require you to give them payment terms. This is a difficult for small companies because you need the cash to pay for the product so you can get more product and then use the gross profit in the order to pay your expenses. Distributors who start to give credit wind up with their inventory gone, no money to pay their suppliers so they can get another shipment and lots of people who owe them small bills which are difficult to track and collect.
You have the costs of a driver, truck, warehouse and then somebody has to go out and sell each account a couple of cases. You have to sample the decision maker, sell them an assortment of flavors, offer them a free case as an inducement to get started and then put up the point of purchase signs and decals that you have seen.
It's a street level business. Avoid large supermarkets and chains that want cash payments for "slotting". Work the small up and down the street accounts first. Then go to colleges and hospitals. Food courts at malls. The business grows by selling more accounts additional products. This requires more products and effective sales effort. You have to service each customer at least every other week. You build a route one stop at a time and have to organize them to give you the most efficient way to service all the stops in a given area.
If you neglect your customers, they don't buy from you and go back to whatever they were selling before.
We have distributors who are large companies as well as one man operations servicing 300 accounts.
If you would like to become a distributor for Elliott's Amazing juices in your area and
-have access to a small warehouse with a fork lift truck
Start with 50 cases and as the business grows, move up to a cube van
with dual wheels.
A small truck with a beverage body which allows you to load/load the truck from the outside costs $40,000 new and about $20,000 used. Only consider trucks with diesel engines and automatic transmissions-better fuel economy and your employees won't burn out clutches.
On a lease deal, it will cost about $800-$1000 a month for the right truck.
Selling beverages on "the street"
-prospecting, approaching the account, qualifying the buyer, making presentations on your feet, dealing with objections, asking for the order, keeping the customer happy. This is not order taking or filling up empty shelves or cooler shelves.
Pro forma budget for start-up
-one person, adding a driver, adding someone in the office. Use this spreadsheet in Excel Format and plug in warehouse size, rent, payroll, fuel cost, etc and find your break even point.
Setting up your first warehouse
-with details about trucks, material handling and warehousing.
Finding Customers and Building Profitable Routes
-How to start with zero customers and build a profitable business in 90 days.
Obtain a distributor and credit application here
-please download, print, complete and fax back these documents
You should have Adobe Acrobat Reader to open, save or print out this file.
Distribution Area Map
Please download this file, locate the maps of the state(s) you cover and
indicate the counties your company can cover so we can define a territory. Fax
or mail back with the distributor application.
SBA Personal Financial Statement
You'll need to complete this if you want to borrow money from a bank,
the SBA or require to provide personal guarantees to suppliers extending
you credit if you are a start-up.
click here to go to Adobe and download Reader
PLEASE...MAKE SURE YOU READ ALL THE INFORMATION HERE FIRST.
Call 1-800-545-8423 if you are interested or
Please tell me something about your background.