One Blog |February 7, 2018 | POS Tracking Software
A New Tool for Wine Distributors — Custom Beverage Menu Software
A New Tool for Wine Distributors
Beverage alcohol distributors, especially those distributors who specialize in wine, often spend a small fortune in what we classify as “POS” — Point-of-Sale marketing materials.
Whether it’s a simple printed sign or a custom beverage menu, these marketing materials are produced and displayed at-retail (store or restaurant) to attract the consumer to purchase your brands over your competitors.
Producing and placing these materials, especially menus, is a costly project.
Wouldn’t you like to know that the investments you are making in “POS” are giving you a great return on investment?
Let’s Back Up a Little
We’ve noticed that some distributors use the terms “POS” and “POP” when they’re referring to temporary signage and permanent displays such as wine racks.
Menus of course are used at the point-of-sale in restaurants and bars, and some customers do use the terms POP or POS for their menus. Some distributors separate menus from the category of POS.
For the purpose of this blog we’ll be using the term “POS” interchangeably with “menu”” for the sake of brevity.
Wine Supplier Reimbursements - Background
Menu production and placement offerings are some of the most popular programs that can be negotiated between suppliers and their distributors.
Reimbursements or incentives for the distributor to participate in a supplier’s menu allowance program can be established for a specific time period, by wine producers, and often with a specific sales goal in mind.
A supplier’s menu reimbursement program is typically an ongoing program set up with a distributor, in an effort to help them recover a significant portion of their menu production and printing costs.
Distributors place menus at-retail in order to gain some or all of the coveted restaurant business in their territory.
It is often said:
“The distributor who supplies the wine menu for the restaurant ‘owns’ the business.”
The reimbursement can be stipulated as a specific amount for a supplier’s brand placement on a menu — For example, $15 per item mention on the wine menu. Sometimes a supplier will simply offer to share the printing costs of a wine menu with the distributor.
These approaches are effective incentives as they defray the distributor’s costs and helps them gain more on-premise placements in bars, hotels, and restaurants. Payment to distributors is usually made in the form of a credit memo after the wine menu is printed.
The supplier usually will ask for proof-of-placement by requesting a digital copy of the wine menus created by the distributor before sending reimbursement.
Different Size Distributors — Different Approaches
Large and Very Large
If you’re a larger wine distributor, chances are you already spend a small fortune in maintaining a graphics department and print shop to produce wine menus as well as other POS for your restaurant customers.
You undoubtedly buy menu covers and perhaps specialized paper to produce unique wine menus — and you certainly are aware of the overall costs involved in the production of these POS programs.
Perhaps you have certain allowances that you can claim from your suppliers to help offset your menu production costs, noted above. To increase cash-flow it is desirable, and sometimes required, for you, the distributor, to file for these allowances on a monthly basis.
For most distributors, the monthly supplier “bill-back” compilations (i.e., supplier proof) require several days to complete. Since these compilations are generally accomplished manually, it is sometimes the case that bill-back filings may contain errors or are incomplete.
Distributors with locations in multiple states often find that the terms and conditions with their suppliers differ by state and change frequently.
Our experience shows that without some type of automated solution distributors are not claiming all the bill-backs that they have earned.
The most repeated comment by distributors related to bill-backs is: "Things just fall through the cracks."
Medium and Small
Our experience shows that medium to smaller wine distributors have not considered offering wine menus due the perceived costs of setting up a print shop inside their facilities.
However, you may wish to reconsider your position on producing wine menus in light of affordable menu tracking software applications currently on the market.
These solutions may allow you to offset the costs of investing in menu production.
Regardless of your size here’s something to consider:
If you don’t have a software solution in place which allows you to order, produce, place and calculate bill-back for your POS marketing materials, in an automated, fast and accurate way, you may have problems.
Large and Very Large — While many distributors in this category have some automated order entry systems, those systems do not address the issue of accurately recovering supplier bill-backs. Without a technology solution, the bill-back process is still long and cumbersome, but worse inaccurate. We have worked closely with three of the Top 10 wine and spirits distributors to design and continually enhance our software across the beverage menu process, including bill-back recovery.
Some companies in this category have chosen to out-source their printing to a large marketing or print company that specializes in outsourced printing. This could be the subject of a blog in itself.
Bottom line, this approach often costs more than expected. In addition, out-sourcing may result in a loss of control over creativity and delays in delivery depending on how far away your print supplier is from your company.
Medium and Small — Without the knowledge of a software solution, distributors in this category often make a decision to stay out of the business of managing their own POS marketing materials.
Most use a local print company or FedEx Print, for example. Again, this can be a very costly option, but it may work for you. Armed with the knowledge of a software solution it would be worth an investigation as to its fit for your company. But most importantly you may find an opportunity to have your beverage suppliers fund your investment in an in-house print shop environment.
We’re not saying that every sized distributor should be in the menu production business, but if you have ever considered it, perhaps learning more about our technology will assist you in making the decision to do so.
In both these cases, having a system in place that tracks and measures the ordering and production work-flow, as well as the impact of POS (including menus), provides distributors with the opportunity to analyze exactly what POS is being produced, for whom, and at what cost.
Accurately managing supplier bill-backs is icing on the cake.
The Good News
The good news is there is a product — MenuTrak — that will allow you, regardless of size, to effectively manage the environments mentioned above.
The better news is that MenuTrak is very affordable and requires no additional investment in computer hardware because it runs “in the cloud”.
And the best news is that MenuTrak pays for itself almost immediately based on the elimination of costly ordering and printing errors, the reduction in the delivery time to market, and the accurate and rapid recovery of supplier bill-backs.
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To learn more about how OnTrak Software helps wine and spirits distributors determine the impact of their investment in POS marketing campaigns, book a free 30-minute consultation with one of our industry experts.