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Labor day 2, let’s go. Today we’re talking about outside sales.

Ok, what are outside sales? We both know what outside sales are. They are your sales reps supporting distributors or they are your sales reps actually in a self-distro environment out selling to different accounts and visiting different accounts.

The benchmark for sales reps in a 50-50 brewery is simple. 10% of what they contribute. 10% of their sales contribution. So if a rep is responsible for $480,000 in beer sales over a year, they should be compensated around $48,000 a year. If a rep is responsible for $200,000 in sales, they should be compensated around $20,000 a year — if you’re following the SBS benchmark.

And it’s a good one in my opinion. The problem lies: Who’s going to live on $20,000 a year. So if you’re paying that rep $30,000 or $40,000 with commissions, all of a sudden that 10% ticks up to 15% and 20% very quickly.

And guess what? I’m telling you right now, that’s not sustainable. It’s not sustainable with your razor-thin wholesale margins. A major pitfall that we see with outside sales is lack of accountability.

Lack of accountability. And that can come in many forms. That could be cadence of sales reps meeting. Internal meetings, right? Meetings with leadership, meetings with ownership. That could be lack of account follow-up. That could be lack of distributor follow-up. That could be improper training.

You want to go with a lower-wage rep and that rep may need love and training and constant accountability to get the job done. That’s what happens when you’re hiring a lower-wage rep vs. someone seasoned and experienced who has the relationships, right? So there’s always a trade-off. We talked about risk week one. Risk and reward. There’s always a trade-off when it comes to selling our beer.

So biggest pitfall: Little to no accountability when it comes to sales. You hire a sales rep and you assume it’s all going to be taken care of, right?

Where we see breweries winning is with following our CE goal, right? So our CE goals are, for a brewery working with a distributor, each rep should be responsible for around 15,000 to 20,000 CE’s per year.

If you’re wondering what a CE is, it’s a case equivalent. And distributors don’t speak in barrels. They don’t speak in cases. They don’t speak in half barrels. They speak in case equivalents. Ok? So they take your half barrels, they take your sixtels, they take your fifty liters and they drill those down into what’s called a case equivalent.

So when you’re working with a distributor, the CE goals are 15,000 to 20,000 CE’s per rep per year. If you’re in the self-distro model, it’s 7,000 to 9,000 CE’s per rep per year.

A good self-distro sales rep can quickly eclipse 10,000 CE’s per year if they know what they’re doing. So you have to weigh the options of hiring someone who’s new and inexperienced and needs tons of accountability vs. someone who’s been doing this and has the drive to get it done.

Alright. Outside sales, critically important. I spend most of my time consulting about outside sales compensation, CE goals, and some tactics on how to improve those.

Overall recap: Outside sales. These are the people on the street wholesaling your beer. What is the metric? 10% of wholesale sales or 10% of what they are contributing to the business.

Pitfalls: No accountability. Successes: CE goals — 15,000 to 20,000 if you’re working with the distributor, 7,000 to 9,000 if you’re in self-distro.

Talk to you tomorrow when we visit production labor.
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