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The Merchant23 Blog

First There Was Direct-to-Consumer, Now There's Direct-to-Trade

Mar 21, 2018 11:59:47 AM / by Jacob Moynihan

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2017 was all about Direct-to-Consumer sales, but 2018 is about Direct-to-Trade (DTT). Unlike DTC, Direct-to-Trade sales still operate within the highly regulated Three-tier System. But DTT isn't your everyday approach to wholesale; it gives Buyers and Sellers much more freedom. So, what exactly is 'Direct-to-Trade'?

"Direct-to-Trade (DTT): The act of buying wholesale alcohol in the Three-tier System by placing purchase orders directly with Sellers and having an in-state distributor invoice and clear the transaction."


With DTT sales, a Sellers products are not listed on the distributors 'book'. Instead, the distributor simply takes title of products as they enter the state and pays the necessary taxes for a reduced markup, similar to Total Wine & More's Winery-Direct program.

Direct-to-Trade sales have been growing in response to distributor consolidations. These are creating a bottleneck on the products that are able to get to market. That, coupled with consumers' growing desire for craft and Buyer's need to bring in exclusive products, is fueling the DTT movement.

Check out this free comparison chart: DTT vs Conventional sales

 

Direct-to-Trade Goes Digital

New platforms have been emerging to help Sellers navigate Direct-to-Trade such as Merchant23. Merchant23 is an online Marketplace that displays products available to be purchased DTT. Any licensed Seller (Winery, Brewery, Distillery, Importer) can upload their products into the Marketplace. Then, through Merchant23's network of clearing distributors in all 50 states, any of the products can be purchased by licensed trade Buyers. 

 

Selling DTT: How To Be Successful

Any Seller can begin selling their products using Direct-to-Trade today. Below are four tips on how you can be successful at it.

1) Call on accounts instead of distributors

Wine-Seller-Merchant23-olivia-schonewiseWhen selling DTT you don't need to spend time calling on distributors. Instead, focus your sales efforts directly on the Buyers who are going to end up with your product. Revamp conversations with the Buyer who wanted your product at a tasting! Email your wine club list and let them know your products are now available to the trade. Pull out the stack of business cards that have been collecting dust in your desk drawer. Communicate directly with the Buyers themselves.

2) Test your hypothesizes - all of them

beer-tap-olivia-schonewise

Do you think your wine should only be sold in Michelin star restaurants? Or that your whiskey would be incredibly successful in Southern states? Maybe that your beer should be sold exclusively on tap? Go find out! Start engaging with the Buyers of those accounts. Send them samples, make a sale, listen to feedback from the markets, then adapt your game plan. The world (or rather the country) is your oyster now.

 

3) Drive sales in the states you're registered in

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When you receive an out-of-state PO, you'll need to get set up in that state. After the initial sale is complete, have your team focus on other accounts in that state. Plan a trip to visit the area and pour for potential Buyers. Chances are if one account wants your product, others in the same region will too. You can really build a following in a select few - sometimes unexpected - markets.

4) Attend trade shows with confidence

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Have you been to a trade show and had a Buyer show interest in your product, only to have to turn down the order because you didn't have distribution in their state(s)? Now you do. With Direct-to-Trade, you never have to turn down a PO again, which means its time to get back on the (trade show) horse! Go to trade tastings, industry events, whatever your budget allows, and start getting your brand out there. 

 

 

Grow Your Brand Your Way

Through Direct-to-Trade sales, Sellers can grow their brands on their own terms, in their unique way. In today's market, no one is going to care about your products more than you. With Direct-to-Trade you now have the freedom to champion your products directly to Buyers. No one is better at selling a product than the Seller themselves. It's time to get out there and start getting orders!

I still have questions, help!

Topics: Three Tier System Wholesale Direct-to-Trade

Written by Jacob Moynihan