Distributor costs

**redbaron586** · May 1st, 2009, 03:48 PM

Hi everyone, this is my first post. I've brewed my own beers in the bast with a friend of mine but I come here today with a different question. I'm trying to do a value chain analysis for a senior project. My professor told us that my group is a Mexican tequila company trying to introduce its product to Morocco. I was wondering if any of y'all knew the average costs for a distributor. Is it a percentage of the selling price or a percentage of sales. Thanks for your help!

Michael

**Jin** · May 2nd, 2009, 10:39 PM

Hey Redbaron,

Welcome to AR.com!

I don't know if I'm understanding your question correctly.

Average costs?

From what I know they get a percentage of the selling price and also a kick back for selling above quota.

As for exactly how much it depends on which distributor and which product.

I can get you exact figures if you have a price point for how much your tequila would cost.

There is a heirarchy from what I see when it comes to distributors. Some are upper class, well paid, famous products companies. Some are bottom of the barrell rot-gut carrying distributors. their profit margins differ. The top dog distributors have more room to flex on kickbacks directly to us.

I'd hate to use examples but in our area the top dog distributor is National Dist. They carry brands like Hennessey and Smirnoff to name a few. As for how much they make if they hit their numbers, I can ask since I'm personal friends with a few in upper management in the company.

I know on the other hand a lower distributor that sells the cheap stuff like Taaka vodka (10.99 retail) makes only 50 cents a case. It could be a percentage but I doubt it. From what I hear its negotiated when the importer sells their brands distribution rights. I believe the distribution companies will almost bid against eachother.

Let me know if that didn't answer your question because it probably didn't.

**Jin** · May 2nd, 2009, 10:40 PM

The distributors for my liquor store come in every day except Tuesday and Friday so if you have specific questions let me know. I'll try to get back to you the same day.

**George Jung** · May 11th, 2009, 12:07 AM

Can you ask them for some scotch samples, Jin?

I really enjoy trying different scotches, but spending $75 to try one is getting expensive.