Why Gross Profit Should Drive Sales Teams

Insights from VXP on the Beer Business Finance Podcast

In the food supply and distribution industry, sales reps are compensated based on a variety of factors, including profits, KPIs, and delivery minimums.

However, Bud Dunn and Brad White from VXP are working to transform the industry by shifting the focus to Gross Profit and making profitable velocity-driven decisions with customers.

In a recent conversation on the Beer Business Finance podcast, Bud and Brad shared their insights and research to support the idea that many other industries have universally focused on Gross Profit, yet the beer industry remains reluctant to make the shift.

The conversation emphasized that understanding Gross Profit is crucial for sales reps to make informed decisions that impact the bottom line.

Sales reps should be able to identify profitable products, promotions, and customers to optimize sales and increase Gross Profit. This focus on Gross Profit can drive sales velocity and ultimately result in more profitable, long-term relationships with customers.

Despite the potential benefits of this approach, the beer industry has been slow to adopt it.

Many industry leaders are hesitant to share gross profit information with their sales reps, fearing that it will lead to negotiations or pushback over pricing and commissions. However, Bud and Brad argue that transparency and open communication can lead to better relationships with sales reps and a more effective partnership.

The conversation also addressed the challenge of changing established habits and sales culture in the beer industry.

According to Bud, “People like to do things the way they’ve always done them. We have to help them understand that there’s a better way.”

To facilitate this shift, VXP has developed training and coaching programs to help sales reps understand Gross Profit and make informed decisions that drive profitability.

In conclusion, the conversation with Bud Dunn and Brad White from VXP highlights the importance of Gross Profit in driving profitable sales decisions in the food supply and distribution industry.

While the beer industry has been slow to adopt this approach, there are many potential benefits to be gained by embracing transparency and open communication around Gross Profit.

If you’re interested in learning more about how to drive profitability in the beer industry or other business sectors, be sure to check out the Beer Business Finance podcast for more informative discussions and insights.