Beverage Distribution

**ajd** · 07-12-2009 07:22 PM

Does anyone have any experience with wholesale beverage distribution, or any kind of distribution for that matter. Im looking to learn as much as I can and would like to relay some ideas with someone who is experienced. Thanks!

**Manny4life** · 07-12-2009 08:55 PM

What do you want to learn and do you have a customer base already? I can help you with some ideas on how it works from your warehouse ordering, stocking and picking sequence, inventory flow management, etc.

**ajd** · 07-13-2009 06:45 PM

Originally Posted by Manny4life

What do you want to learn and do you have a customer base already? I can help you with some ideas on how it works from your warehouse ordering, stocking and picking sequence, inventory flow management, etc.

I just have a lot of specific questions that I would figure out if I could work at one of these places for 5 minutes or ask someone who has. For example would I, the distributor go to the supplier to pickup the beverages or would they be delivered to me. Should I get some brands before I seek financing so it will be easier? All the things you mentioned I would love to talk about. You cant receive private messages but I'd like to talk with you.

**Manny4life** · 07-13-2009 09:38 PM

Well as for the delivery from your supplier to your warehouse is discussed per your contractual agreement with your respective supplier. It will be safe to say that you will assume all the cost associated from the purchase of the product to its delivery. In rare cases, major suppliers bear the shipping cost, however, you are responsible for the liability insurance and other indirect cost associted with the delivery.

Branded products would seem like a good idea, but, you have to consider the key players and distributors in the market. Most investors are unlikely to finance due to the fact that there are other people in this market for same product, and this guys buy at far much larger quantities leaving no room for competition, and even if small guys like you come in, you will probably buy at a higher price compared to this guys meaning that you will sell at a higher price which definitely means that customers will likely go for your competitor.

What kind of branded beverage are you interested in?

As for e-Warehousing, this is a sequence where all activities are interfaced electronically through Electronic Data Interchange (EDI), or some other electronic method. For instance Inventory Management

Stocking sequence - This feature is when you program the system and when you receive products, the system tells you where to stock the item based on location ID #. For instance, you have product A, B and C, and location A to I, and a location has a sub location like A1, A2, A3,...... to infinity. Therefore, when you scan product A, it will tell you to stock in location A, shelf 2, bin 3, etc .

Inventory management - this is a very important feature if utilized properly controls "SHRINK", and this can include Pre-order, Cycle Counts, Bin and Location management, and several others. This controls the features of damaging products, withdrawing products including recalls and etc. It all depends on how you organize your system for different programs.

Finance and Acct,

This includes AP, AR, GL, bank deposit, reconciliation, etc and everything associted with accounting.

E-order
This is the features that allows your customers to order electronically using a Telxon scanner you see in stores. When they scan items at their location, because their order system is linked to server using IP addresses, the information is encrpyted and sent over to you where in turn you receive it and process it. After the order comes in, it will download into your system as a pending order pull batch, in most cases depending on how the system is programmed, you have to activate the order, but lets assume that you don't that it automatically activates, after downloading into the system, you will use your Telxon scanner to pull the items. Don't forget that because you have your warehouse organize in locations, the orders will be grouped into locations making it easier for the puller to move from one place to another. After the pull, the system completes the order and then in return transmits the information to the Host system where it will update all Balance on Hand (BOH) of all items prompting you if you have to order from your supplier. After you system updates, you will transmit the order pull information back to your customers server to update their BOH. When this is done, the finance dept will receive it and create an e-Invoice which it transmits to corporate for payment and the corporate system will transmit your money to you electronically down to the bank.

I mean this is the process and unless your warehouse is large, then you will just need basics of this stuff otherwise it needs to be fully automated.

**ajd** · 07-13-2009 10:00 PM

Originally Posted by Manny4life

Well as for the delivery from your supplier to your warehouse is discussed per your contractual agreement with your respective supplier. It will be safe to say that you will assume all the cost associated from the purchase of the product to its delivery. In rare cases, major suppliers bear the shipping cost, however, you are responsible for the liability insurance and other indirect cost associted with the delivery.

Branded products would seem like a good idea, but, you have to consider the key players and distributors in the market. Most investors are unlikely to finance due to the fact that there are other people in this market for same product, and this guys buy at far much larger quantities leaving no room for competition, and even if small guys like you come in, you will probably buy at a higher price compared to this guys meaning that you will sell at a higher price which definitely means that customers will likely go for your competitor.

What kind of branded beverage are you interested in?

As for e-Warehousing, this is a sequence where all activities are interfaced electronically through Electronic Data Interchange (EDI), or some other electronic method. For instance Inventory Management

Stocking sequence - This feature is when you program the system and when you receive products, the system tells you where to stock the item based on location ID #. For instance, you have product A, B and C, and location A to I, and a location has a sub location like A1, A2, A3,...... to infinity. Therefore, when you scan product A, it will tell you to stock in location A, shelf 2, bin 3, etc .

Inventory management - this is a very important feature if utilized properly controls "SHRINK", and this can include Pre-order, Cycle Counts, Bin and Location management, and several others. This controls the features of damaging products, withdrawing products including recalls and etc. It all depends on how you organize your system for different programs.

Finance and Acct,

This includes AP, AR, GL, bank deposit, reconciliation, etc and everything associted with accounting.

E-order
This is the features that allows your customers to order electronically using a Telxon scanner you see in stores. When they scan items at their location, because their order system is linked to server using IP addresses, the information is encrpyted and sent over to you where in turn you receive it and process it. After the order comes in, it will download into your system as a pending order pull batch, in most cases depending on how the system is programmed, you have to activate the order, but lets assume that you don't that it automatically activates, after downloading into the system, you will use your Telxon scanner to pull the items. Don't forget that because you have your warehouse organize in locations, the orders will be grouped into locations making it easier for the puller to move from one place to another. After the pull, the system completes the order and then in return transmits the information to the Host system where it will update all Balance on Hand (BOH) of all items prompting you if you have to order from your supplier. After you system updates, you will transmit the order pull information back to your customers server to update their BOH. When this is done, the finance dept will receive it and create an e-Invoice which it transmits to corporate for payment and the corporate system will transmit your money to you electronically down to the bank.

I mean this is the process and unless your warehouse is large, then you will just need basics of this stuff otherwise it needs to be fully automated.

I am looking at craft/specialty beer distribution. There is room for such a business where I live. I know the rules and regulations of the industry. I am looking to start very small with one truck, a small warehouse and a couple employees. As far as the e-warehousing and e-ordering goes I think that may be unnecessary at this beginning stage as I don't intend on having a huge inventory. There should not be a huge problem obtaining suppliers since there are many more micro-breweries than distributors to carry their beer. I know this is a difficult business to enter but it can be done. I do wonder if it is possible to start as small as I plan to. Basically me, a driver, and maybe a part time sales person and/or marketing person.

**Manny4life** · 07-13-2009 10:18 PM

Sure you can, I mean you start small with about 3 - 8 employees but you still need to get the the cheapest warehousing software so that you can take orders received either through fax, and or phone otherwise you are going to have quite a hard time with inventory management, and since you want to be the driver, when your employees know that nothing is monitored, that creates room for theft. Buy YES, you definitely can start-up small. As for the e-warehousing, I guess you don't need it now though.