Every wholesaler is facing increased costs due to inflation and escalating wage levels. We are seeing the effect on our clients across the country as they search for difficult answers to mitigate the impact of the rising cost.
Significant cost reduction takes a lot of time & energy, usually requiring a full reroute & structure change, something many wholesalers don’t want to entertain heading into the busy summer selling season. Thankfully, there are some immediate changes you can make within your marketing department in the near-term that don’t require a massive undertaking that will help control cost. REDUCING COSTS IS ALWAYS DIFFICULT, BUT IT HAS NEVER BEEN MORE NECESSARY GIVEN TODAY’S ENVIRONMENT.
4 OPTIONS TO SAVE MONEY NOW
(THAT DON’T REQUIRE A MAJOR UNDERTAKING)
1 // REDUCE SIGN SHOP EXPENSES
- Apply 100% of True Sign Shop Cost against CPC. Make sure ALL your sign shop expenses are included in the cost you charge against your CPC budget, not just labor & materials.
- Develop a sign & POS policy. Clearly define how many signs and the quality of signs each class of retailer is allowed to receive.
2 // IMPLEMENT A TAP HANDLE DEPOSIT FEE
- Don’t wait for your competitor to do it first – be the market leader. Wholesalers that don’t charge retailers a tap handle deposit fee lose a higher percentage of tap handles than the wholesalers that charge the deposit fee.
3 // TURN SPECIAL EVENTS INTO A PROFIT CENTER
- Eliminate unproductive special events. If the special event doesn’t generate enough gross profit to cover your total costs of the event or if the event doesn’t attract enough consumers, the right consumers, or consumers directly from your market area, then consider discontinuing your sponsorship.
- Charge for all equipment, POS & personnel tied to the event. This includes vehicle delivery & pick up, cups, wristbands, signage, coolers, cold boxes, tents, and labor.
4 // REDUCE BRAND MANAGEMENT PAYROLL EXPENSE
- Refresh your portfolio. Discontinue suppliers & SKUs that don’t generate adequate gross profit and are also difficult to work with.
- Eliminate secondary responsibilities from the brand managers. Identify responsibilities that are currently assigned to the brand managers that could be reassigned to admin, ordering, pricing and/or sales support personnel with the goal of reducing the total # of brand managers.