Wine Industry Distribution Channel Overview in the Us Essay

Wine industry distribution channel overview: In the wine world today, wine producers must understand that there are three ways that their product can get to the end consumer. First, the consumer may buy the wine from a retail store such as a wine boutique or online store such as Wine.com, both examples implying that the consumer drinks it at home or another residence. Second, the consumer can buy wine in at a place of consumption such as a wine bar or restaurant and drink it on the premises. And lastly, third, a consumer can buy wine directly from a producer either in person, such as in a tasting room or by mail order, such as in a wine club. (From this point on when retailer is mentioned, it refers to any business that sells†¦show more content†¦They store wine in refrigerated facilities and properly transport it to retail locations were it is to be made ready for purchase by the customer. Distributors also provides a financial service. They pay the producer up front. By law they must pay within 30 days after receipt of the product. This means that distributors assume a risk, as they are the ones who â€Å"hold the bag† and are responsible for collecting payments from retailers. As a producer, the pros of working with distributors are as follows: -Cash up front, therefore less risk. It’s not your problem if retailers who don’t pay up. -A lot of distributors have an excellent logistical system and a lot of retail clients, offering you a large reach in order to move volume. -Distributors relieve your carrying costs of inventory. -Distributors can serve as agents of marketing research, as they are constantly interacting with the customers. They can become aware of trends and marketing problems before the producer because they are on the front lines. Naturally, there are cons of working with distributors: -They cut substantially into your profit margin. -You have less control of where your product will become available. -You have little or no control of the selling price they charge. -Distributors work with many producers and it’s hard for salespeople to remember every winery’s story. They may get things wrong or do an improper impression of your brand. InShow MoreRelatedMondavi1180 Words   |  5 Pages4. What actions would you take to sustain and enhance Mondavi’s competitive position? Looking at the wine industry, and analyzing the market wine, we can say that there are three main factors that can bring to success a wine industry: brand image, distributer relationship and access to capital and collaboration. Robert Mondavi winery success depends and will depend on the same factors listed above. 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