Beer Business Daily
July 21, 2021
The Distributor of the Future,
Dear Client:
E-commerce isn’t just for consumers – distributors need to “up” their B2B e-comm game, too. That’s the message from the founder of future-forward online wholesaler, LibDib.
CEO Cheryl Durzy spoke at our Distributor Productivity Summit earlier this week.
WHAT IS LIBDIB? If you haven’t heard of LibDib, the platform offers any supplier the chance to have distribution in their six markets of operation: California, New York, Florida, Illinois, Wisconsin and Colorado.
“We built the platform, really, for the suppliers, so they could engage with their buyers,” said Cheryl. “I wanted our makers to have an opportunity to go out in the marketplace, and meet the buyers.”
Basically, LibDib offers bev alc producers the ability to get their product to the end buyer.
They offer their suppliers tools, for example, to submit the alert LibDib of buyer interest with a digital request. They can invite or communicate with their accounts, too.
But LibDib doesn’t have things like warehouses or trucks, however, as they are more a technology company. So they partnered with a large distributor, RNDC, in 2018 to help with just that.
And in return, RNDC gets some e-commerce capabilities and insights.
More on that in a second. First, you may be curious about LibDib’s “vital stats.”
ON MARKETS, MARGINS, AND VIRTUAL INVENTORY. Our Wine & Spirits editor Sarah Barrett asked Cheryl about their markets, margins, and how much inventory they hold.
Make no mistake: Cheryl intends for LibDib to be national, though she admits it “may take 5-10 years” to get there.
In the near term, she teased a few imminent new markets. Expect a “couple new markets” hitting, “hopefully in the next few weeks.”
As for margins: “We operate on 14% margin,” said Cheryl, “a little more than half” of a typical, traditional distributor. She believes that equates to an “affordable, efficient route to market.”
And inventory? They have “over 10,000 SKUs on the platform, between our 6 markets. I’d say we have hundreds of thousands of cases of virtual inventory.”
And it’s growing. Since “day 1,” they’ve had “multiple suppliers signing up every day. We continue to get more new products every week.”
But they don’t do any direct to consumer, she clarifies.
“LibDib is an entirely B2B platform” Cheryl clarifies. “We don’t do any DTC sales,” although they do work with retailers who do — things like helping subscription clubs “find unique things,” for example.
SUPPLIERS BREAKDOWN. But how many suppliers do they have? “About 1,000 suppliers in our markets,” says Cheryl. “It’s actually about 70% spirits, 30% wine. …
“We have suppliers of all sizes,” she said. For example, one of their distillers is one of the largest rum suppliers in the world. On the other hand, some of their suppliers peddle a couple of hundred cases.
Even for larger suppliers “it’s a great, easy way” to get to market with seasonal items … and they “can still have an entire book with another wholesaler.”
Because, as Cheryl points out, “innovation is happening so fast,” and “it’s not necessarily fast to get to market with a traditional distributor. In a state like Florida,” for example, once you take care of compliance, “it takes 3 or 4 days to get live in a market” with LibDib.
HOW THE RNDC PARTNERSHIP WORKS. Back to that RNDC partnership.
If they’re so intent on connecting the buyer to the producer, why do they need a traditional distributor partner?
The partnership plays to each organization’s strengths. Cheryl says the impetus was obvious: “We can help them with their tech; their platform, eRNDC; their supplier portal, their e-commerce for their buyers and their sales rep experience; all the digital pieces of that.”
In return, “they help us with logistics,” says Cheryl. “There’s no better shipper or deliverer of alcohol than a distributor.” They are able to leverage RNDC’s warehousing, trucks, etc.
“They believe in what we’re doing here; and providing access to all brands,” says Cheryl. “In that vein, we can act as a [brand] incubator for them.”
Between the two models, “we can support distribution of all products of all sizes.”
Should we expect more partnerships for LibDib?
“No, one’s enough for now,” says Cheryl.
DISTRIBS NEED TO PAY ATTENTION TO ECOMM. But she warns more traditional distributors to pay attention to the world of e-comm. If nothing else, working with online companies is better than getting passed by them.
“More and more distributors are getting online,” she says. “During COVID, when they couldn’t send their sales reps in, they needed a way for people to see products and order… so more and more, whether it’s through third parties [like Provi or SevenFifty]… or having their own site… everyone’s going to have to have some kind of online presence – for the buyer it’s just going to be required.”
BEER BRIEFS:
MORE SUPPLY WOES: CO2 ISSUE AT MC ALBANY BREWERY. In yet another industry supply snag, BBD has learned that Molson Coors has communicated to some distributors that due to a constraint at its CO2 supplier, the company’s Albany brewery in Georgia is “experiencing delays that impact WK29 (July 19) and WK30 (July 26) shipments.” Shipments for both weeks “were adjusted to fit available capacity,” per communication. The note says it’s possible “that some distributors may experience low warehouse volume or potential OOS on this package until replenishment loads arrive.” However, Molson Coors assures BBD that the issue is minimal. “The brewery is still able to produce around 95% of the beer it does in a given week while we continue to work with our supplier on a resolution,” per spokesperson.
Until tomorrow,
Harry, Jenn, and Jordan
“You do your best work if you do a job that makes you happy.” – Bob Ross
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