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The three tier system requires that all wholesale alcohol in this country be ordered from a liquor distributor. These distributors are primarily sales and logistics agents and aren't technology driven.

We are looking to create enterprise software that allows liquor distributors to start accepting orders online via the web and mobile. This frees up sales reps to do high level sales activities and lets distributors save money by being able to service more accounts.

P.S. We are looking for a rails developer to hire if anyone is looking for some hourly work.

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From a bar/restaurant manager perspective, I never understood why distributors don't integrate technology. When I managed a large bar/restaurant, ordering $1000s of dollars of liquor/beer each week, I would have to call each order in to my rep's voicemail and leave a message. If he had any questions he would call me back and ask for clarification. In almost every order though there was at least one issue where the wrong liquor was sent, the wrong quantity was sent, etc... Huge time suck for management having to always double check each order as it came in and reorder with risk of running out.

With that said, it would be cool if you could integrate with liquor management systems (i.e. BevSpot or BarMetrix) to somehow automate the entire process. So when they ran their inventory it would automatically create events and reorder the required products.

Great thoughts and exactly the problem we are trying to solve.

We actually have our system setup to work with Bevinco, which comes in and takes your inventory in the middle of the night and then generates an inventory report. We have a quick order page that matches that so they can just run down a list (opposed to driving through a catalog, which is our main way).

Our plan is to eventually have inventory be apart of our system so we can have machine learning on par levels, consumption, ordering.

I like the idea and a point-of-sale like system seems like it would make a good product.

A couple years ago a new bar opened up across the street from me. At the same time, a liquor store down the street was going out of business and put most of the liquor on clearance. The new bar owner filled me in on the state of liquor in Massachusetts. Apparently the system is super controlled by distributors. Even if he wanted to go down to the liquor store and buy 100 bottles of liquor on clearance, he couldn't. He can only buy through a licensed distributor. Some of the liquor he stocked was actually more expensive through the distributor than it was from retail liquor stores in the area. The industry has special controls in place, like special caps on dealer-distributed liquor. He joked about buying some of the clearance liquor and pouring it into the bottles. It was pretty clear that I was paying higher prices because of the distributor-controlled market.

Massachusetts seems to have some of the most strict alcohol laws around. Unlike neighboring states like New Hampshire, we can't order wine from wherever we want online. This means that many of the wines that I'd like to drink aren't available to me since no one in the area distributes them. Some people get around this by shipping wine to friends in nearby states or by traveling to places and shipping cases back via UPS marked "tiles + olive oil".

Are you aware of / how are you different than BevSpot (https://www.bevspot.com/)?

They seem to be solving this problem from the restaurant management side, which builds the demand-side of the marketplace, making it easier for them to sell distributors on the supply side: https://www.bevspot.com/distributors/

Hey - from DC and my buddy used to work for the Beer Wholesalers Association as a lobbyist and I have a couple other buddies who lobbied for Wine & Spirits. I have a piece of advice that dovetails into a question. The advice is to go meet with those folk at those associations if you haven't already. The question is that I know from my buddies' experience at those places, there is a lot of political resistance in those industries to "changing things" - how do you intend to navigate around that political/attitude problem?

Thanks for the thoughts and we will check them out.

We aren't looking to change the way alcohol is distributed, just offer a tool to take orders. There are a bunch of distributors that have already built their own ecommerce ordering solutions and have found them to work well.

Can you explain a bit more about how the current system works, and how your software would make it better?

Are the distributors and wholesalers going to save more/make more money by using your software? How?

1) Accounts (bars, restaurants, wedding halls, grocery stores, etc.) are either served by a sales rep or the orders have to be phoned in if you don't have a sales rep. If you have a sales rep, you place your order by calling, texting or emailing.

The problem is that all ordering and product info is then reactive to the rep. You can't login and see prices or products available, you have to reach out to your rep to answer questions.

The other side is that reps are busy and driving around all day, so they often don't respond by order cut off time. Our system helps take away these manual tasks and let hem do more selling.

2) Distributors spend $100k-$1mm each year paying employees to take orders for house accounts. Our system allows them to cut down on this labor cost. It also allows them to reach more accounts as each sales rep might only be able to service so many accounts. If we can automate part of it, they can do more selling to more accounts.

Wow, that's madness. You've definitely found a great market to modernize.

How big is this market?

There are 5600 distributors in the country. Our software could also work though for self distributed beers, liquor and wine, as they have to take orders also.

Strange question - Is there a reason it is still done this way? Are there entrenched distributors and commissioned sales reps that are incentivized to keep things the same way?

Many wholesale & distributor businesses seem to operate this way, but the reason is rarely due to lack of available technology solutions... Just a thought worth thinking about.

The sales reps could see it as a threat depending on how it works with them. We always say that there is a place for good sales reps, we just don't want them to be glorified order takers.

You do also have a lot of old school distributor owners that view sales reps as hand to hand combat and are afraid of losing that touch point.

Sounded like it's straight out of The Office.

I'm involved in placing POs for CPG products (I work for a retailer). Why would the process be fundamentally different for liquor wholesales & retailers? I get that it's currently an inefficient system, but if you could snap your fingers and put the tech in place, what about it is differentiated enough from existing purchase order systems to justify focusing specifically on the liquor biz? Genuinely curious!

Great question. The main problem isn't necessarily placing orders, its also being able to manage your ordering process. If you are doing a new cocktail menu and you need a lemoncello that is under 20 dollars to fit into your cocktail, you would have to reach out to every rep and ask them for product info and pricing. Our system lets you see everything available to you from all distributors. You can then one click order across as many distributors as you want.

It's been some time since I've interfaced with distributors, but I thought one of the largest companies, Southern Wine & Spirits, invested a lot into infrastructure in their warehouses and online fulfillment. Is this something thats just targeted to smaller distributors?

We are targeting ourselves to anyone that doesn't have their own system. Small and medium distributors lend themselves well to this because they usually have small sales forces and are limited in the number of accounts they can service.

Would this solution do much of the same thing you are looking to create https://www.handshake.com/ ?

The requirements of the alcohol industry are very specific and vary state to state, so we think it requires specialized software to take that into account.

who is the value holder - the accounts or the distributors?

It is a split, the bars, restaurants and stores get to speed up ordering immensely and also don't have the interruptions of sales reps in and out.

The distributors get to streamline how orders are placed and have records of them. They also get to save money by servicing house accounts that might rely on telesales to take orders.

Do distributors currently have software that you can tie into to get up-to-date stock and prices?

Are there any legal hurdles with scaling this across state lines?

A majority of small to medium distributors use quickbooks, so we could tap into that API. The larger ones have custom erp systems that could be tapped into, but it gets tricky. At the lowest touch point, we could send orders to sales reps to punch.

Yea, there are things to take into account with certain states related to pricing, etc.

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Will do - thanks.

How far along are you?

Why did you pick this idea to work on?

PS Nice TLD.

Are the distributors mom and pop shops or big corporations?

How does Walmart/Costco/Big grocery store chain place orders for liquor now?

There is a pretty big range - but it ends up being a nice mix of large, medium and small. Large distributors will typically be your macro beer and liquor brands. Mom and pop distributors will typically be niche wine distributors.

A handful of chains have developed systems to create PO's, but a majority just rely on sales reps to service the account.

how do you plan to monetize?

Nice idea. But that's the problem, it's just an idea.

So in order to get distributors onboard, we have been signing up bar and restaurant groups to use our service to send sales reps orders.

Our goal is to go back to distributors and ask for integrations once we have the orders to back it up.

Have you talked directly to distributors (or even their salespeople) to ask why they haven't done this? What are their concerns?

Some distributors have built out systems to allow online ordering and it works well for them and they view it as a competitive advantage. A few have also tried over the years but found they couldn't get customers to actually use it.

It helps that we have seen a major shift from food distributors to online platforms.

A concern of some distributors is losing the touch point with the sales rep. They want a rep to be talking to the buyers at any chance they get or they think people will pass up on their products.

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