The Dust-Free Bottles Framework: A Simple System to Spot Venues Worth Your Time (and Avoid Ones That Won’t Reorder)
How To Identify Venues That Will Reorder And Drive Sales, And Avoid Those Where Your Bottles Gather Dust.
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Dear Bottom-up Drinks Builder,
You've been there, done that. You see it every day when a bar makes its first order. They buy their first bottle from you. You are probably the only person selling your brand in your city, and you focus on moving on to the next bar, forgetting about the previous one.
You have your own way of working, but it is probably homemade. You know whom and when to follow up with, but you lack a system that will give you consistency.
In the last twenty years, I've analyzed On-trade sales of premium drink brands across 30+ markets. I've also investigated what happens after a bar makes the first order. I will give you a checklist to help you focus on the right things and improve your productivity.
The first order is the most exciting moment for a salesperson. I still remember my first sale in the On-trade in Rome 20+ years ago. The owner, Jamie, was a British guy who owned a Cuban restaurant and bar, and I had to do everything in English. Walking out of the room, I thought: wow, and what is happening now?
I consider the first sale just like a first date. Will there be more, or will I never see that person again? How much is that bar going to sell? Will it be a significant customer of mine, or will this be the first and last order?
When a brand starts to get traction in a city, it is crucial to prioritize outlets so you don't waste time on those selling too little. But when you start in the market when they place their first order, how do you know if you should put in the effort with them?
Here you find a few Guides about it:
Chris Maffeo
Chris Maffeo
Chris Maffeo
Analyze your sell-out per outlet.
When starting to get the first sales in a city, the most crucial thing to do is to understand where the sales velocity comes from.
Most brands I talk to discuss "average sales velocity" per outlet. They take all their sales and divide them by all their bars. That gives them the most useless metrics there could be. Everyone knows it, but everyone uses it.
Why do they? Because it makes your numbers look better than they are when reporting to management.
In the beginning, bars will not order cases but bottles. Let’s be honest: few bars have the gut to say, "Let's try a case."
To understand your potential in a city, analyze who sells very little and understand the patterns in those bars.
That's the only way to understand how to react to objections, divert from the outlets that waste time, and appreciate your real potential. I am not talking about market share but essential monthly sales in bottles or cases per outlet.
Analyze your first orders
After gaining your first 20 buying outlets, understand who sells what. Some outlets will sell very little, but there are a few reasons why that could be the case. Most brands get discouraged about analysis because they think they lack sell-out data. It's a big mistake. Why?
- Most bars are small, and their sell-in is close to their sell-out. Nobody wants to lock their cash in stock, so they buy the minimum needed to run the show.
- Especially at the beginning, your orders will be so small that you can track them with a simple Excel (if you don't want to invest in a CRM system)
Tip: It is good to start the analysis when you use a sizeable number of outlets as a sample. Most outlets will give you low sales velocity if you start too early. I recommend doing this after the first three months in the market. This way, you also have the chance to factor in reordering.
Imagine you want to straighten the trunk of a growing tree. If you start too early, there is no trunk. You start too late; it's already hard and woody. You must catch the right moment.
Understand their sales velocity in the period.
Whether you want to analyze it by week or month, you will understand how much they ordered since their first order with a simple calculation. By dividing the sales by the number of months or weeks since their first order, you will get your ratio (e.g., two bottles per month or one bottle per week, etc.).
Tip: especially on small accounts and small orders, there’s no stock build up so sell-in and sell-out will basically be the same
A number is just a number if you don't dig into it. It's important to clarify that outlets that sell little include a few categories of bars.
Understand if there's a potential or skip it.
Depending on when you are running the analysis, you will get the following:
1. Those who ordered once and never reordered are a lost battle, and you should leave them alone. Go back there only if they contact you again.
2. Those who ordered more than once but a long time ago: understand why they didn't order. If they order more than once, the chances are that they like the product and need to be reminded. It is very common with smaller brands, especially those that are not a core category for that bar.
3. Those who just started ordering are trying out the brand. They are usually those outlets that just decided to try the product. You might be able to increase their average rotation, especially if their core occasion matches one of your brands. Follow up with them, ensure they know how to sell your brand and monitor their sell-out. If you see potential, try to bring them up in sales in the Farming Matrix; otherwise, treat them like in point 1.
💡 How to understand the right bar for your brand:
Target Occasion: how does your core occasion fit with theirs? If your occasion is a "shot," a fine dining venue won't be right for you, even if it's on all the guides as the best place in town.
Commercial Proposition: what's your purpose, and what values does your brand represent? How would you translate your brand positioning into three types of outlets? Those are the outlets where your brand would ideally fit its drinks range.
What's key is to understand soon enough which outlets to invest more time in and which ones to skip.
Some of them will stay there. They will never reorder; at best, their average velocity will decrease with time or stay where they are with sporadic reorders.
Some others will move with time. You must be strict in treating them and managing their expectations.
- too many visits would be a waste of time
- too little, and they may not reorder and become a missed opportunity
You will learn with experience but must have a straightforward system.
Repeat the analysis after each month and monitor your progress on how outlets move left and right on the Farming Matrix.
I hope this newsletter will help you better focus your efforts while scaling up.
Build your brand bottom-up.
I hope this mini-guide will help you develop the small, consistent habits you need to build your brand from the ground up.
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