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Outsourcing Wine Liquidation: Why You Don’t Want To Use Your Sales Team

June 10, 2021by Alexander Pagon0

As you well know, if you’ve been given a great deal once, you’d have to be crazy not to ask again. Third Leaf Trading will consult with you on price and placement but, we bring our own network of buyers to the table. We’ve picked those buyers because they understand the way we operate and rigorous demands we place on brand protection.

It’s all relative. Every action has an equal and opposite reaction. While you may want to leverage your existing sales team to help liquidate your excess inventory – we often find there’s more negative blowback for the rep to manage over the long term. Outsourcing the liquidation is a layer of protection for your team, brand and price.

Don’t distract your sales team with inventory liquidation; they need to focus on building your brand. Every minute spent on something else is a wasted opportunity to move your business forward. Your team is likely specialized in the sorts of sales – on-premise, chain retail, etc. – that drive your business forward on a daily basis.

Discreetly selling excess inventory is not the sales segment they specialize in.  Just as you wouldn’t expect your chain retail team to have current relationships with all the top on-premise accounts, you shouldn’t expect your team to have a full contact list of the right buyers for discreetly selling your excess inventory.

Furthermore, your sales team is almost certainly going to engage your distributors and existing customers in the inventory liquidation effort, which will be doubly injurious. Your distributors can only devote a certain amount of time and attention on your wines, so time spent on inventory liquidation is time not spent on expanding your account base and selling current vintages.

Perhaps the biggest problem is that management will get distracted trying to manage and oversee a process that it is likely new to them.  By definition selling excess inventory is not a core task, so the most productive course is for management to establish a clear objective and desired resolution, and then engage with a professional team that will provide a clear plan for the winery’s approval and then execute and report back.  Successful organizations delegate and outsource non-core functions, and selling excess inventory is not a core function for wineries, but it must be planned and executed professionally with an eye toward preserving your brand equity.

by Alexander Pagon

Alex Pagon is a Founding and Managing Partner of Third Leaf Partners. He leads Third Leaf’s beverage practice, which oversaw the successful turnaround of Evening Land, launched ENTER.Sake in the US and Europe as a category leader in the premium sake segment, and helped grow several other brands, including Empire Estate, Lingua Franca, Antica Terra, and OOLA. He currently advises premium wineries, breweries, and distilleries in five states and six countries. Alex also serves on the board of WineBid, the world’s largest online wine auctioneer, and is a founder and director of Protea Financial, which provides accounting and bookkeeping services to small- and medium-sized businesses.

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