Startups in a nutshell: Nik started online wine merchant Red Squirrel Wine in October 2012 and has been running it out of Club Workspace Chiswick since November 2013. He's been regaling us with his stories of setting up a business - read some more of his Startup Diaries here. In this week's column, he talks about appearing at trade shows can open up new opportunities and be a timely reminder of why you love your business.
The wine sellers the public come across the most are of course retailers, and for eight out of every ten bottles sold in the UK that means supermarkets. A meaningful minority might go to Majestic, which is a supermarket without the food (but with a significantly better range of wines), or another chain like Oddbins (a shadow of its former self). A very small minority will buy most of their wine from an independent wine merchant, be it a bricks & mortar type or increasingly an online retailer, such as Red Squirrel Wine.
That's just scratching the surface. There are companies that import the wine, and sell mostly to bars and restaurants (the on-trade). There are some that sell mostly to shops (the off-trade). There are some who sell in vast quantities to wholesalers, who in turn sell on to restaurants or shops. Some don't import the wine at all, rather they act as agents for wineries who then deal with merchants direct. Or you can cut out the middle man entirely and go direct, which we do as much as possible, but it has its consequences for your cash flow.
Some wine companies do a bit of everything. Red Squirrel Wine imports its own wines as well as sources from small, specialist importers and agents; we then sell those wines mostly to the public online, as well as to shops and restaurants. The two sides of the business complement each other well.
Nevertheless, retailing, or the B2C approach, is tricky and competitive enough on its own. The B2B side of things is another kettle of fish; even more so when you're one of the smaller fish. Many companies in different industries will have a similar model, and will know how different the two environments can be.
Something that's common to pretty much any B2B industry sector is the trade show. Whether you're dealing in car parts or paper clips. In fact, there's an entire industry devoted to creating companies' stands and associated paraphernalia for these shows. Last week, Red Squirrel Wine experienced its first: the London Wine Fair.
Back at its old venue of Kensington Olympia after an unpopular interlude at the Excel centre, the London Wine Fair was never viewed by us as an appropriate channel. We're too small, it's too big (and costly). This is where supermarket wine buyers and bulk shippers come to talk numbers behind closed doors.
But this year, the LWF did something different. It launched a whole new section for smaller importers like Red Squirrel Wine: tightly packed trestle tables, exciting branding and competitively priced. We jumped at the opportunity, albeit nervously. No one quite knew what to expect.
It was a complete revelation. The little guys' section was the busiest and most talked-about of the entire show. It brought a very B2C feel to a B2B event. Personal, close-up, rapid-fire; rather than slow corporate meetings across a hastily assembled trade stand table. I'm sure bigger deals were cut on the big, professionally-designed stands in the main hall; but the lifeblood of the show was a million miles away, figuratively if not physically. Small really was beautiful.
The revamped London Wine Fair reminded me why I'm doing what I'm doing. Whoever you're selling wine to - or any product for that matter - you're doing it because you're passionate about it and, hopefully, you have a brilliant product and you want to tell the world about it.
A bit like advertising spending, which I wrote about in an earlier blog, investing heavily in trade shows always scared me. The ROI seemed too distant. But the world won't come to you. We took the plunge, and loved every tiring minute of it. Talking, shouting, lifting, pouring wine, pouring our hearts out. After a tough couple of weeks spent mostly behind a desk and stuck in paperwork, it was just what I - and the company - needed.
Over the course of three days we gained the amount of strong leads that a tiny team such as ours would have taken much longer to reach without the exposure of a trade fair. These big set piece events aren't always for the smallest companies, which can often get lost in the crowd. The London Wine Fair turned that notion on its head. Not only was that good for the smaller companies, it was good for the London Wine Fair too.
Read some more Startup Diaries here.
If you have any questions or comments, get in touch on Twitter @clubworkspace and @Nikdarlington.
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