A profit-driven sales team for the beer industry feels like a fairytale.  But in a land not so far away, there are many other industries and companies that pay their sales reps based on the profits the company generates. This is a revolutionary way of doing business, as it incentivizes the sales reps to not only focus on making sales but also to ensure that the company is generating as much profit as possible.

Overall, companies that pay their sales reps based on the profits the company generates are incredibly successful. They are able to attract the best and brightest sales reps, who are motivated to work hard and ensure the company’s success. As a result, these companies flourish and become leaders in their respective industries.

Construction supply distributors pay their sales reps on profits

A typical construction supply distributor pays their sales reps based on the profits they generate for the company in several different ways. These companies offer a base salary to the sales reps, and then provide additional bonuses or commissions based on the profits generated from each sale.  This incentivizes the sales reps to focus on selling high-profit products, and to negotiate the best deals possible with clients.  

The approach to paying sales reps based on profits gets the sales reps focused on what really matters.  These construction supply distributors could focus on volume sales or volume dollars, but they have found that those metrics do not drive the most profits.  

What are the benefits of profit focused sales? 

Aligned Interests

One of the benefits of paying sales reps based on the profits they generate for the company is that it can help to align the interests of the sales reps with those of the company. 

When sales reps are motivated to increase the company’s profits, they are more likely to make decisions that are in the best interest of the business, rather than just focusing on their own personal sales targets. 

This can lead to a more cohesive and effective sales team, as well as a more profitable company.

Attract top talent

Another advantage of this approach to compensation is that it can help to attract and retain top-performing sales reps. Sales reps who are motivated by the potential to earn more money based on the company’s profits are likely to be more ambitious and hard-working, and they may be more likely to stay with the company in the long term. This can be especially beneficial for companies in competitive industries, where retaining top talent is critical to success.

Incentivize creative solutions

In addition, paying sales reps based on the profits they generate for the company can also help to incentivize innovation and creativity. 

When sales reps are motivated to increase the company’s profits, they may be more likely to come up with new and creative ways to sell products or services, or to find new business opportunities that can generate additional profits for the company.   Sales reps have to be more creative to maximize profit than to check boxes in a pay-for-performance compensation structure.  This can help to drive the company’s growth and success in the long term.

How can this apply to a beer distributor?

It’s completely possible for you as a beer distributor to pay your sales reps based on the profits they generate for the company in a similar way to other businesses. 

Beer distributors can offer a base salary to the sales reps, and then provide additional bonuses or commissions based on the profits generated from each sale. This incentivizes your sales reps to focus on selling high-profit products or services, and to work to get your packages placed in the best spots in your customers’ stores.

This focus on profits can also lead to more careful planning and strategizing on the part of the sales reps. They may spend more time researching their market and potential products they can sell, and they may be more selective in the placements they pursue, focusing only on those that are likely to result in the greatest profits and volumes for the company.

Your sales rep with a profit-first incentive plan will work to grow profits on their route by carefully managing the display space they earn and the packages they place. They will aim to find the right balance between the volume of each package in your portfolio and the profits those sales can bring in each store. 

 In addition, they will focus on building strong relationships with their customers and providing excellent service to encourage growth in the display space, shelf space, and taps that they manage for each store.  They will also constantly monitor their sales data and adjust their strategies accordingly to ensure that they are making the most of their route and maximizing their profits and volumes. 

Overall, a beer distributor sales rep with a profit-first incentive plan will run their route like their own little business, carefully managing their territory like it is their own.  

What are some examples of how reps focus on profits first?

Here are some examples of how sales reps might focus on profits first:

1. Instead of simply trying to sell as many cases or revenue dollars as possible, the sales rep will focus on selling higher-profit products or services that generate more profit for the company.
2. The sales rep will negotiate better displays with customers, such as offering the same brand on display, but a higher profit package.
3. The sales rep will look for opportunities to cross-sell or upsell additional products in their portfolio that they have not focused on before.  This can increase the overall profitability of each sale.
4. The sales rep might work with the company’s management to identify areas where costs can be reduced, such as by not placing slow packages into stores where they will need to be rotated out or bought back because they have gone out of date.  

Overall, when sales reps focus on profits first, they are looking for ways to increase the bottom line of the company, rather than just focusing on making sales. This can lead to a more successful and profitable business.

Is this transformation for your distributorship?  

As consultants in the beer industry, the VXP system will help you make changes to your sales reps’ mindset to focus on profits first by providing guidance and expertise on industry best practices and strategies. 

VXP will work with you to develop a plan for increasing the profitability of your company, and can provide training and support to help the sales reps implement that plan.

The VXP system has built in metrics and performance targets that align with the company’s profitability goals, and with the VXP app provides regular feedback and coaching to the sales reps to help them meet those targets. 

In addition, the VXP team can help to identify and address any challenges or obstacles that the sales reps may face in their efforts to focus on profits first.

Overall, the VXP system provides the framework, coaching, and support to help your sales reps shift their mindset to focus on profits first. By working with VXP, you can gain access to valuable expertise and insights that can help to drive the success and profitability of your business.