I own a tanning salon.

I am very aggravated with the local coke and pepsi distributors here.

I retail 24oz packages as singles that I buy at retail for $10-$12/case (in 6 packs). I retail at $1.19 plus tax = $1.25.

The local pepsi and coke distributors are upset because I won't resell their 20oz singles. Their wholesale price to me for 20oz packages is $22+ a case.

They have lost their mind!

Or have I?

Do you use a coke or pepsi visicooler? did you purchase said equipment or have them deliver to you under the pretense that you would sell their products in it? if so then they have every right to be angry with you. you are using their equipment more than likely at no charge. you are buying product from a different source than from coke/pepsi. They have given you equipment that coke/pepsi bought and paid for, have to take deprieciation on and are not making a dime off of the use of it. If I were in the position I would open the door tip the cooler over and dump all product out of it and wheel it out the door. If you do not have a cooler from either of them, tell them to get bent, it is your salon and you will do as you please.

Good post saint. I completely agree.

Six packs are banded for a reason - for the consumer to purchase them as a multipack take home package to enjoy at home or on the go.

20oz singles are consided "immediate consumption" - a package where the product is purchased, and then opened and consumed.

If the equipment you sell your soda out of is your own, it's not an issue. Of course, Coke and Pepsi will come by and try to convince you to switch to their machine and sell 20oz, but it's your business and your decision.

The drawback with selling a product that is intended as part of a multipack is this. Variety. Generally, the variety available in six packs is more limited than in the 20oz line.

Also, if you are using your own cooler, and it breaks down, you have to pay to get it fixed. Coke/Pepsi will send out a service tech (at no charge) to fix any broken coolers.

Heck, you could even install an actual vending machine, and wouldn't have to worry about stocking it or keeping track of the money. You would get a commission check from Coke/Pepsi.

The bottlers also run deals from time to time. These vary from place to place, though. Sometimes, reduced prices on certain brands, buy X cases, get a case free, and so on.

There's no need to be aggravated. Just show them the door, and let them know you don't need their services.

We do have old style branded coolers. So what? I sell a lot of product. It is the very least they can do for the outlet.

Right now the local distributors have zero selling expense servicing my "account". I do it myself. Of course, the local distributor has already made their profit before I even make my purchase at the power retailer / big box. The fact is, power retailers are an efficient distribution channel for them. The know it.

I've told Coke and Pepsi reps that I want to buy product from them direct. But I get to decide what I'll buy (24oz), the most I'll pay for it (retail price at the power retailers), and the quantities I will order (what I need, not some arbitrary minimum).

Simple enough? No, it is way too complicated for them.

All of the distributor-biased comments from fusion and the saint mask that the distributors believe they deserve the larger share of retail gross profit on single sales. That's is, of course, absurd. It is rationalization and justification. They feel it is okay for a distributor to act like a bully partner with retailers because a brand name is on the cooler. Again, that is absurd. They forget who is the buyer and who is the seller and that it is a buyer's market. That's just plain dumb on their part.

They forget that the best sales come from offering the best product at competitive prices with superior service and support.

And the customer is always right.

It just cracks me up that distributors think it is justifiable for a soccer mom at the grocery store to pay less for product (in a more desirable package) than a retailer buying 10-15 cases at a time.

That's distribution insanity!

Originally posted by <tanman>:
We do have old style branded coolers. So what? I sell a lot of product. It is the very least they can do for the outlet.

Right now the local distributors have zero selling expense servicing my "account". I do it myself. Of course, the local distributor has already made their profit before I even make my purchase at the power retailer / big box. The fact is, power retailers are an efficient distribution channel for them. The know it.

I've told Coke and Pepsi reps that I want to buy product from them direct. But I get to decide what I'll buy (24oz), the most I'll pay for it (retail price at the power retailers), and the quantities I will order (what I need, not some arbitrary minimum).

Simple enough? No, it is way too complicated for them.

All of the distributor-biased comments from fusion and the saint mask that the distributors believe they deserve the larger share of retail gross profit on single sales. That's is, of course, absurd. It is rationalization and justification. They feel it is okay for a distributor to act like a bully partner with retailers because a brand name is on the cooler. Again, that is absurd. They forget who is the buyer and who is the seller and that it is a buyer's market. That's just plain dumb on their part.

They forget that the best sales come from offering the best product at competitive prices with superior service and support.

And the customer is always right.

THE CUSTOMER IS NOT ALWAYS RIGHT. That is the lamest and oldest worthless saying ever concocted.
Pepsi and Coke by giving you a cooler free of charge do have some cost involved in servicing your account. That cooler depending on size cost at least $1000. They rely on profits from selling you drinks to help off set that cost.
If you were buying drinks at the volume the big box guys are then you could recieve the same discount and you wouldn't have to worry about going to them to purchase drinks.
The Beverage Industry is just like the tanning industry. Everyone is in it for maximum profits and shareholder value.

BTW, If the customer is always right then I expect a free tan with the purchase of every tan. A BOGO if you will. How long will you stay in business doing that? After All I am the customer, therefor I am right!

Back when I was buying Coca Cola from the local Coca Cola distributor (I did not buy soda pop from a middle vendor,direct from Coca Cola). I wanted to buy 12 to 15 cases of cans to fill/stock our 6 slot machine.

Coca Cola quoted me $4 more per case than the average case cost found in the local stores. I asked them about this. They said my account in relative terms would be costing them money to service. In order to get the first tier of price discounts I had to buy a minimum of 45 case per delivery.

I was able to meet the minimum delivery and received a $1.50 case allowance. My company had to build a pop "closet" to store the soda pop. So instead of buying a supply for each week,I brought 45 cases which lasted about 3 weeks.

So in answer to your question. The volume you purchase from Coke or Pepsi does not even come close to the volume needed to get a discount or allowance. Either find a way to buy more and store it or buy your own machine and buy your own cans/bottles a grocery store or at a warehouse store.

Coke and Pepsi are in business to make profit. At the large grocery stores they can sell four times or more the volume in a few days than you can sell in half a year. You pay for the connivance of service and delivery. The large grocery stores earn the service and delivery due the high volume of sales.

[ 01-25-2006, 03:03 PM: Message edited by: Mr Zabe ]

Originally posted by <tanman>:
It just cracks me up that distributors think it is justifiable for a soccer mom at the grocery store to pay less for product (in a more desirable package) than a retailer buying 10-15 cases at a time.

That's distribution insanity!

In all reality, if you knew anything about the beverage industry you would know that the profit on a case of soda is not that great. It takes volumes to make money. Go buy your own cooler and fill it anyway you wish. But how long will ittake you to repay that cooler cost out of your profits from buying all of your product from Walmart. Don't forget to add in your time and efforts and time away from your business, wear and tear on your vehicle, etc when adding in the cost of that case of soda.

All this is just rationalization and justification.

Distribution has lost it's grip on reality when a soccer mom at the grocery pays less than a retailer for product.

They rely on profits from selling you drinks to help off set that cost.

Don't try to make me cry about the cost of the cooler. It's was depreciated down to zero long ago and has fallen off the radar. The break point on the cost of the cooler may be 70-80 cases.

I expect a free tan with the purchase of every tan. A BOGO if you will.

Our year around tanners do pay less than half of what a one month tanner pays. And that is profitable, thank you. And the customer is right at retail or they become someone else's customer.

None of this justifies charging a small retailer More Than Double Retail Price for single sale packages. You know this doesn't work with the major accounts. Why screw the small retailer?

It is worthwhile for us to buy product though alternative channels or we wouldn't do it.

I may not fully understand the soda distribution business. It's obvious that soda distributors are clueless about retail.

Exactly. Businesses will contract with the bottler to provide full service vending to provide the customer's demand for a cold beverage, but also eliminate the hassle of having to deal with the beverages themselves. You've got a vending delivery person to deliver it, a driver to stock it, repair people to fix it when it goes down, and so on. And you get a check every month.

10-15 cases isn't even worth driving the truck up to your back door, imho.

You're missing the entire point of the immediate consumption channel versus the take home channel. Totally different price structure, package mix, and so on. It's like buying two pieces of fried chicken at KFC versus buying the boxed stuff at the grocery store and heating it up in your house.

Why don't you just install a fountain machine if you want to maximize your profits? You can get 300 servings from one BIB. Or stock your coolers with Sam's Choice?