The Startup CPG Podcast

Matt Merson
The trade show itself is the output of all the work you do leading up and to the trade show, which is the input. And if you don't do the work leading up into the trade show, your output will be bad. If you do all the work, you know, trying to engage with buyers, trying to engage with, in this case, unfi reps, contacting them, trying to get them to your booth, make sure buyers are attending. Maybe you have some sort of premium like, hey, if you come to my booth, I have a amex gift card or Starbucks gift card for you and your buyer. All of that work leading up into the show will determine how well you do at the show.

00:47
Daniel Scharff
Welcome to the startup CPG podcast. Today we are going deep on sales. We've got Matt merson. Matt's a third 30 year sales pro who we are going to ask some of the most common questions that we're getting from brands in our Slack channel. We are talking about how much you should pay your sales team, how to work best with national and regional distributors, the best use of coupons, sell sheet, best practices, and a lot more. I really think that these sales topics are some of the most useful ones for early stage brands out there. So thank you so much to Matt for the help. He's always so glad to share his incredible knowledge and help this community. All right, here we go. All right, welcome everybody. We are back with Matt Merson from Once Upon a Coconut legendary sales pro.

01:32
Daniel Scharff
And we recently hit 30,000 members on the Slack and I thought one great way to celebrate would be let's take some of the most common, most relatable sales questions out there and just ask the pro. I think sales is one of those areas where you can really learn by hearing about what other people are curious about because we're honestly all of these things apply to all of us at one stage or another in the business. And even if you've already fought your way through this one, it's probably fun to think about, like watching an episode of a show that you really like again and again. So, Matt, thank you so much for joining us again here. Your past episodes were such bangers. I'm sure lots of people have the Velocity one saved to their list. Do you mind?

02:12
Daniel Scharff
Just for anyone who hasn't heard that one, could you please treat us to a brief intro?

02:16
Matt Merson
Sure, Dan. And first of all, congrats on 30,000 Slack followers. It's a tremendous milestone. I'm a big fan of the channel and I know it takes a ton of work. So you and your team did A bang up job and really happy for you that you hit that milestone and I hope it doubles or triples. So congrats to you and the team. Been in CPG for 35 years. 15 on the beverage side, 15 on the food side. Dabbled in just about every channel from food service to convenience to grocery. Now sit in the chief sales officer around strategy and sales here at Once Upon a Coconut. But you know, passionate about the industry and I would say my first 15 years were in big corporate CPG with Dan and Yogurt, Sarah Lee and Coca Cola.

03:02
Matt Merson
And my last 20 years have really been an emerging disruptive better for you brands. So that makes me passionate about work that you're doing because I do want to see better for you brands succeed and not make the same pitfalls that other brands have experienced.

03:16
Daniel Scharff
I love it and thank you also because you were an early joiner of this lock. You've been with us on the ride for a long time. So thank you for being part of the community. I also love how your role always includes not just sales but also strategy, which is so important. And having run a brand, I can tell you that's the part that we really got wrong. And you know, for me the strategy is really around like sharp thinking, what kind of products do we really need to have in the portfolio? What's our channel strategy? I have definitely been in situations where we got that wrong and we lost all our money because it just took us too long to figure things out and actually get the portfolio the right way, tweaked, kind of ready to go.

03:58
Daniel Scharff
And by the time we finally did, it was like, well, that was as long as you had to play this game. So, you know, maybe next time try to do that up at the forefront. Is that a big reason why you really focus on the strategy part?

04:10
Matt Merson
Yeah, I mean, to your point, you know, regardless of what's in the portfolio, who is the consumer, where are they shopping? That's where you want to market and sell the product to, you know, first and then build out in concentric circles. But you really need to know what need state you're satisfying, what's the usage occasion, who's your consumer and where they're shopping. That's where you need to sell.

04:31
Daniel Scharff
That's the part where you get a really clearly defined value proposition that weaves into launching the right SKUs with the right messaging in the right places, supporting it the right way. That stuff that sounds like something that we should all do. But I think in the excitement of launching a brand often you're just like, we'll launch this one and they'll both be good. Everyone's going to like all of them, right? Okay, cool. So you are the right guy to have here. And I really, I just want everyone to know before we jump into this, Matt is the guy that I go to anytime I have questions about sales in this industry. People who have been doing it a long time are always great to chat with. But you can also really tell when it's people who, you know, haven't just like managed teams.

05:12
Daniel Scharff
But no, they've really done it very intimately and have great perspective on it as well as you're all about to see. So as I mentioned, we hit 30k on Slack. They're all these incredible questions in our sales channel and they get answered by everybody right there in the Slack, which is great. If anyone's not on there, please join us. You can join via our website. But you know, I just thought it would be really cool to expound on these topics and let everybody out there hear it. So first one, Eric asked in the Slack if anybody had compensation benchmarks for sales reps. He was asking specifically about New York City, like fixed and variable. But can you just give us the primer on how much do you pay salespeople?

05:49
Daniel Scharff
Whether it's a local sales rep, like an area sales manager or a regional person, or like a key count person or even up to like a national sales manager. What are all the things you should think about and what are the ranges and how do you structure it?

06:05
Matt Merson
Yep. And I, fortunately, I have the benefit of being born and raised here in New York City. And New York City has always been where I've had my most staff. So I have a pretty good finger on the pulse of compensation in New York. But I also want to say that nationally Force Brands publishes a benchmarking study every year on compensations. And if you can get your hands on that, it will list by level, by location, by size of brand, and takes into account a lot of different dimensions that are a little more nuanced. But you know, here in metro New York, probably boroughs being so big here you could have area sales manager, you could have one person that's responsible for New York City.

06:47
Matt Merson
You could have people in each borough that report up to a director that might be part of a bigger region, could be part of metro New York, which would include, you know, Westchester County, Fairfield County, Long island and parts of New Jersey. You know, in the CPG space. For me, it has always been base plus bonus. There's never really been a commission element to any of the brands that I've worked on. I'd say for entry level sales here in metro New York, given the cost of living, you know, the base is going to be somewhere between 60 and 120, you know, anywhere from a 10% to a 25% bonus, depending on the level. You could have an area sales manager, district sales manager, which would be a level up, then a regional sales leader, all the way up to director level.

07:30
Daniel Scharff
So for those area sales managers, okay, let's say you want a nice healthy bonus target because salespeople work really well with targets. How, as a newer brand, how do you even figure out what that target should be? How to set it, how to measure it?

07:44
Matt Merson
There's a lot of inputs there. And I think the bonus piece is bifurcated in two ways. One, what the individual can do. But secondarily you have to take into account company results. And in a startup world, if you're launching multiple markets and you need to pull some resources from New York up into New England to do a crew drive or over to Chicago to do a crew drive or attend trade shows and you're taking people out of their market in which they would normally be compensated for their sales activity, you want to foster a team mentality. So I think first and foremost in a startup world, there's going to be some quantitative and qualitative goals for the individual. And the quantitative is very easy. It's, you know, how many cases did you sell or net sales?

08:29
Matt Merson
The qualitative in a startup environment is a little more tricky because coming in the door, you don't know what the velocity is going to look like. So, you know, it might be around. Did you make X number of presentations per week? Did you do X number of demos per week? Did you make sure your promo calendars were in place? Just all sorts of other things that you really can't measure by a number. So those would be the two elements for an individual. And then you might put the overall company results. Now, the more entry level you are on the scale, the bigger part of your compensation bonus is your work and the smaller piece is the company work. But as you move the ladder, it starts to balance out.

09:12
Matt Merson
And even when you get to my level, you know, I'm a hundred percent company now, right? I'm based on the company results as the top sales executive here and not on individuals. So, you know, I need all my people and I have nine reporting to me right now. I need all of them to be successful if I want to make my bonus.

09:30
Daniel Scharff
Okay, and you mentioned a pretty big range, 60 to 1 20. Now is that going to depend on their experience? You know, whether they're just hitting independence or whether they have experience calling on some of the bigger chains around New York? How do you figure that out?

09:46
Matt Merson
Yeah, I definitely think it's experience related. I also think it's dependent on the brand. If you have a fast moving consumable like a beverage or a snack product that's going to be able to deliver 10, 15, 20 million worth of results in New York, that's going to be a larger compensation than a very nuanced niche product that might only expect 2, 3, $4 million of revenue in for New York.

10:08
Daniel Scharff
Okay, so now just coming up a level just to give everybody some benchmarks and I know you mentioned you could get them from that Force Brands report, which I think is free actually on their website. If you sign up for it. What do you typically expect to pay if you then want to get, let's say you're first sales hire for a growing brand, you know, let's say kind of director level. What do you, what do you think people can expect in different markets?

10:31
Matt Merson
Again, there's a lot of inputs in there. It's the size of the brand, it's the market that they live in. You know, it's the Runway that the brand has from investment. But I think at a director level, somebody who's maybe running the east coast or even in a smaller brand, you might have a director of sales running the national brand. It's probably a 110 to 160 range out there nationally. I would say, you know, the bonus component goes up a little bit. It would probably be 20 to 30%. Maybe 25% is a sweet spot for director level.

11:02
Daniel Scharff
I know you know how to evaluate salespeople pretty well because that obviously is your pedigree. Do you have a top tip for somebody interviewing a salesperson of like, hey, if you're hiring for this, you know, make sure that they have the experience in your category or just make sure they have these attributes. Any top tip for people?

11:19
Matt Merson
Yeah, actually I think I would default back to our opening chat here about the strategy around hiring. Hypothetically, if I was going through a search right now, I would think about the four things that are most important to me and you know, it would be in the beverage space. It would be my route to market. Do they know my route to market, which in my case is dsc? Do they know my category which is beverage. Beverage is a lot different than frozen and refrigerated and has nuances about it. Usually a fast moving consumer. Good. So you want to understand the opportunity to grow with secondary and tertiary platements and all the things you can do with beverage and snack around a store. And then you know, you always want to look for culture fit too.

11:59
Matt Merson
You know, we're not a tried and true organization yet. We're an emerging startup. We're trying to get to the right processes and procedures so people have to be a little more understanding and around the culture and have input into what the right things to do at an early stage. Startup.

12:16
Daniel Scharff
Yeah, I love it. Okay, great. So that all ties together very nicely as well. Let's see how it ties into the next question. So separate one. Here's another question from Slack. So this is from Kyle. Kyle said we're already up and running with national distribution so let's assume something like UNFI Cahi. And now Kyle's looking for advice on what are the pros and cons of layering in smaller regional distributors and you know, probably dsds, I'm assuming. What, what do you think? I mean you're obviously mainly DSD now for your current brand, but I know you've done it all in the past. What do you think about that? Like hey, I've been in this situation, I've got UNIFI and or Kahi and I'm hitting a bunch of great accounts.

12:57
Daniel Scharff
But oh, there's this regional DSD that has reached out to me and they want to just crush it in their market with my product. That's very tempting. But they also want some of these counts from unifying ke. That's going to be kind of weird. There's some overlap here. What do I do?

13:09
Matt Merson
Yeah, that's a great question. And I do happen to have a natural channel overlay because my product is in Sprouts and Whole Foods. So we are actively managing UNFI and KE houses to service these key natural channel customers. But prior to that my roles in my two natural food products that I were just recently at, you know, again I would default back to the strategy. Like if this regional account is your only route to market like a CNS or to reach a new customer that is not serviced by KHE and Unified. To me it makes sense to add if you're adding a distributor that is not going to bring any accretive accounts, it's just going to dilute your strength with UNFI and KE warehouses. And at the end of the day I'm always thinking about logistical optimization.

13:56
Matt Merson
You know, I want to be servicing KHI and UNFI with, you know, quarter truckloads, half truckloads, full truckloads, so that my cost to serve on the distribution side is going down and I'm able to get more margin points if I start diluting my operational efficiency. It really doesn't make sense unless this regional distributor is reaching new customers. Now the flip side of that coin, Dan, is you might be saying, well, I'm in New York and I don't know whether or not to use the UNFI warehouse or a DSD partner like Rainforest or Doris. And that's a separate evaluation process, but for sure I would not have both.

14:31
Daniel Scharff
Okay, wait, what about that one though? Cause I want to know the answer to that too. Like, okay, I've got this account, you know, hey, am I going to better servicing this through unifi or through this dsd? That seems like a killer. What are the pros and cons of each?

14:43
Matt Merson
You know, a DSD is really built for fast moving consumer products. You know, it's where you need a more hands on approach. You need people in the store packing out the shelves three times a week. You need to be delivering two, three times a week. But there's a cost associated with that. You know, these guys have refrigerated sometimes frozen trucks doing business in metro New York. A lot of them are based over in New Jersey. So they're, you know, coming into the toll zone here in Manhattan, they're crossing the GW bridge is a big price to doing business in New York.

15:16
Matt Merson
The flip side of that is KHI and unfi which are going to package your products on a pallet with lots of other brands and they're going to drop it on the back dock and hope that the store staff gets around to putting on the shelf. Now in a slower moving world, slower velocity products, maybe an entree or a condiment, that might work fine. So again, it goes back to your strategy about what set you live in and what's the most effective way to service that set and how often do you need to service that set. You know, DSDs also offer the opportunity to get secondary placements that Akahe and UNFI rep will not do. When the DSD is in the store, they see an open space by the register. Let's say you're selling seltzer.

15:55
Matt Merson
They could talk to the store manager, hey, do you mind if I put a case stack of the seltzer in this open area here so that's the benefits of dsd, but you pay for those incremental benefits.

16:04
Daniel Scharff
Okay. And just because I know also the DSD contracts can be a little tricky. It feels like unifying. Katie, I don't think that there's that much room to negotiate really. I've heard of people trying, I don't know. Right. It seems like there's not much you can do with dsds. I think there is a whole process of back and forth and they have this like, you know, death grip where like, okay, yes, we want to work with you. By the way, if you ever leave us, you owe us five years of profit and your next born child and all of this stuff. So any tips for people negotiating with dsds?

16:37
Matt Merson
Yeah, it's fair. I think you have to understand the hand you're holding. You know, if you're a brand new emerging brand and you have zero distribution in the market and you really are going to lean on the DSD for access, rightfully so. They should deserve a bigger compensation package. If you are bringing a book of business, if you want to transfer, transition away from UNFI or K to a DSD and you say, hey, I'm dropping several hundred thousand dollars of accounts and cases and business into you might have a better opportunity in negotiating.

17:07
Matt Merson
But you know, if you sit on the other side of the desk for one minute, you have these DSD partners that are out there really building tremendous brands in the toughest market in the world, you know, and prior to the last couple years, they were just getting yanked away because they scaled or exited into a bigger company. And now the DSDS had these holes, not only on their trucks, lost cases, in sales, lost optimization on opex, cost to serve. So I think it's a fair model. You just have to land on the right metrics that are fair.

17:38
Daniel Scharff
I mean, I've only negotiated one or two of these things, but I actually was surprised at how little they pushed back when I really changed that number. Also where I. I don't know if what they proposed was like four years or something. And I was like, hey, we can do two. They're like, oh, that's no problem. Like what? Oh, I really thought I was gearing up for a fight on that one, but I don't know, I got the feeling that they're gonna ask just for the moon, because why not? They're. It's their contract template probably that you guys start out with, but. But you know, just good to mark those things up. Right. And figure out what are the top concerns.

18:08
Daniel Scharff
I Cared a lot about that because you know, at the time as a brand we're like, hey, we really want to protect against these exit clauses because who knows, maybe you know, we partner up with a big CBG company at some point that wants to take on our brand onto their distribution. And that's tough if we have all of those clauses in place where there's a huge cash payment required to do it. So that was the thing we cared the most about. But we could have been more flexible on, you know, more ongoing terms, stuff like that, giving them accounts.

18:38
Matt Merson
I would say that's the most asked question that I answer the most is DSD contracts on the slack CPG channel. And to your point, you hit the nail on the head. I call it the kitchen sink. I want when you receive their contract template, you got to imagine it's the kitchen sink. They are putting absolutely everything in there that a lot of people will just look at it and sign it away. But to your point, they're absolutely open to negotiation and being fair. In the experiences I've had, that is good to know.

19:06
Daniel Scharff
It's very scary when you get something like that as a newer brand. You're just like, well no, I can't. What? This is crazy. But yeah, I think that level headed way to look at it I think would be really helpful for people. So hopefully everyone who is facing one of those contracts hears those words from you and can approach it with. So okay, next question. This one comes up a ton is from Luke. Luke wants to know about who's using coupons very well independent stores. Natural channel. How does it all work? You know, we all as consumers go in and see consumer or see products that have a little coupon stickered on them or maybe as part of the pack, something like that. How do you think about them? How do you actually get them set up? When do you like to use them?

19:47
Matt Merson
Yeah, let's break that into two parts. One is the back end mechanics and the functionality of it. Where what we call an IRC or instant redeem coupon, sort of one of these little neck wringers that just hangs on the can and is either 50 or 75 cents off or in some cases could be bogo. You got to set up an account with a clearinghouse coupon clearinghouse that will issue a barcode and then you have to have your art department create it and then print your either on pack sticker or neck ringer or however you want to approach it. Once you have that all set up, the back end is all set up, you're ready to deploy them into the trade. You know, a lot of times this is a tool for the salespeople to go get something incremental like, hey, Mr.

20:28
Matt Merson
Retailer, give me an end cap and I will sticker all these bags with a dollar off or give me some cold space and I'll sticker all the product in the store with a dollar off to help it move. You know, without a strategy, it doesn't make sense to go into a store and just randomly start tagging your product with discount on it. Sometimes when I think about Ke and UNFI's promo calendar and if I have, you know, four months of promotion, let's say March, you know, June, September, December, I'm on 10% OI that or 15% OI that I know is going to drive a tag in the store. I will only ever deploy the coupons in the off months. So, you know, you're not getting double dipped. But use them as a tool. I mean, get something for it.

21:11
Matt Merson
Because there is a cost to the brand for it. And these retailers want to move product and of course when things go on sale, they get moved faster. But we all know that planning cycle to get the tag on and get something on sale is lengthy. So when things are not on sale, use it to say, hey, let me put out a thousand coupons in your stores, irc, but give me some space, let me put in shippers, let me get some cold space, secondary placement, something like that. Get something for it.

21:43
Daniel Scharff
Okay, so bigger brands, you know, this is a little more commonplace for them because they probably already have a contract with a clearinghouse which you have to have, right? You have to have like a monthly fee with them for them to be processing these. Because basically the cashier is going to scan the coupon and then they keep it and then they're going to mail it in at some point to someone who has to actually process that for you. Theoretically you could do that on your own and issue the payment, but it's not going to be fun for your team to do that. Most people will then opt for a clearinghouse basically and pay them a monthly fee and then they'll just take care of all the coupons and the payments for all that stuff.

22:20
Daniel Scharff
The coupon codes typically can hold a certain number of your SKUs, which is often why a lot of people like to have GS1 prefixes that cover a lot more SKUs because the coupons only hold up to a certain number of digits. So you can cover more if you have the prefix and yeah, Again, for those bigger companies, you also might have merchandisers who can actually be in the store stickering the coupons on the product. But for a growing brand, it's a little bit different. You're like, oh, coupons, yeah, we should have that. But you know, then you have to really consider whether you want to start paying that monthly retainer already. And you know, just to do that in a couple stores, that's kind of a tricky calculation. Right.

22:56
Daniel Scharff
And then also, yeah, I mean, how can you actually get the coupons on the pack? Right. It's like often very hard to do that at the place of manufacturing. Right. Like your coman, they're usually not in the game of going and then taking every single product that comes off the line and putting a sticker on it. Oh, but only some that go to this one plate. Right. So how do you think emerging brands typically tackle that?

23:17
Matt Merson
Well, I think in a previous chat we talked about third party merchandisers in relentless or basemakers or dirty hands. If you are contracted with them to deploy them into the stores, they could certainly apply them. You know, another really good use of coupons, Daniel, is if you're doing any kind of demos in store or sampling events out of store, a lot of times, you know, consumers will come up, they'll try their product, you know, they're going to think about the purchase. You're not going to get a lot of people that on the spot are going to say, oh yeah, I'm going to take this. So if you had a paper coupon that was like, hey, look, today in the store, I'm going to give you a dollar off this product. Take this coupon, you know, add a sampling.

23:58
Matt Merson
It definitely helps raise the conversion from sample to purchase in store. And when you're doing an event, you know, outside, let's say you're doing a festival and you're able to distribute coupons at the festival, you're now driving consumers to the store because they put it in their pocket, they're thinking about the brand. They didn't just sample it at the festival, now they're coming home with something tangible. They bring it to the store, they're looking for it in the store. And you'll get a higher redemption rate if you distribute paper coupons.

24:25
Daniel Scharff
I like that. And yeah, I have not spent a lot of time thinking about it, but it makes a ton of sense, especially if you're trying to do really well in a particular store, drive your velocity at a certain chain. When you get the chance to do that and it's a lot easier tote around a bunch of coupons than a bunch of products. So that makes a lot of sense to me. But yeah, I mean, basically, no matter how you cut it's tough for a very early brand without tons of distribution. And some of those, some of that infrastructure in place to really deploy coupons in an effective way.

24:52
Daniel Scharff
I think some of them look more at the digital approach then because of those challenges where you can try to offer those like text to get a rebate type things or I mean, you can also look at some of those digital coupon partners out there that are in the stores or like, you know, retail media is some alternatives for that. Okay, coming to our next question here. So Peter asked, he's working through the Kahe roadmap planning, but I think this would be the same whether it's Kahe UNFI and was just asking if anybody has opinions around some of the advertisings or roadmap programs. You know, what do we do? What's actually really effective? What's the stuff that you like the best?

25:34
Matt Merson
My two favorite components of the roadmap are obviously the TPR months, right? So a lot of retailers, if you're in big retailers or even small retailers, you know, you want to have some forethought to think out to the future. And like I'm thinking about 20, 26, which is really due now. You have to be thinking about what months next year do I want to promote with an OI allowance where we'll get passed down to my retail partners and I'll get a yellow tag on the shelf that says on sale. That to me is probably the most effective element of that. Before you do that, you should understand what percentage of your customers are chain accounts and what percentage of your customers are independents. And when you look at that subset of customers, how many will actually execute the coupon?

26:20
Matt Merson
Because remember, in both of these scenarios with KE and unfi, you're giving KHE and Unify the percentage off their entire load for like eight weeks. And they're only passing on the savings for four weeks to the retailer that runs a tag. So there's a lot of financial nuance around deciding when you want to run ois. But the second part I really like about it is their shows. They have great selling shows around the country. They get, they're well attended and you could actually write orders at the shows. As far as the digital stuff, the digital ads, the. I don't find a lot of value in that. And I, I Honestly think it's very tough to tie back to performance. Okay, I ran this thousand dollars digital ad. How did it do? Tough to measure.

27:05
Daniel Scharff
Pretty tough. And I totally agree with you, especially about the shows. We got a chance to go to the UNFI top two shows, I would say, which is the Vegas one and the Mohican sun with a innovation section. So brands from our community who were the top innovations of the year got to come. And they were not yet in unfi. So we had the section there, and all of the buyers in the UNFI team could come by and vote on who they thought were the best products that should get into unfi. Probably funneling them into the UNFI Up Next program, which is pretty cool. It's exciting. They're great shows, especially if you're really trying to grow the distribution centers in those regions, because that's who's there. There are a lot of independents there, and there are a lot of the anchor accounts there.

27:46
Daniel Scharff
And, you know, that's a very almost the, like, point of sale approach to trying to grow something. You know, the equivalent of doing like, yeah, TPRs, like really, like, at the source. Okay, here are the buyers who pull out of these DCs. Let me try to grow with them.

28:00
Matt Merson
And think about this for a second, Dan. I mean, I wonder how many UNFI reps were at that Mohican sun show and how long it would. How long it would take you as a manufacturer to engage with all the UNFI reps and get them to be ambassadors and salespeople for your brand. But having a table right there, being able to connect with not only customers, but really an extension of your selling team, which is the distributor rep, the UNFI reps, or KAHI reps. It's really invaluable and probably money well spent.

28:27
Daniel Scharff
You know, it's. It's funny, that's what I said back to unfi. I was like, thank you. This was such a cool opportunity for us. And actually, the thing that I probably liked the most was just getting to know the UNFI team so well, because they were more excited than anybody about the innovation section. And they kept coming back and bringing their teammates from UNFI and their buyers. Like, look, did you look at this thing? I remember the brand browser was there with us, which is a German craft soda. They have like a malt beer, but it's non alk. It's amazing. And there was a woman from UNFI who is German, and she was obsessed, and she should be. It's an incredible product. And she just Won a shelfie with us for that sku. It's so good.

29:04
Daniel Scharff
But she brought literally 20 people, that's an accurate count like back by to do the voting to vote for her to get in. So I, you know, everybody in our section just made so many allies with the UNFI team who, you know, the same is true with UNFI and khi. The people who work there love brands. They love emerging brands. They like what they do. You know, I think almost everybody in CPG does and they just are excited to get to know the products and then try to support them. And I mean, you probably know this better than anybody. Sometimes those account managers can actually be a easier ticket into an account than the actual buyers. Right?

29:39
Matt Merson
Your advocates.

29:40
Daniel Scharff
Yeah. What a cool chance to be there. And I definitely would encourage anybody at, whether you're at one of those distributor shows or you're at expo, treat anybody from one of those distributors the same way that you would a buyer. Try to sell them and you know, ask what account they work with or if even if you have a different target account, ask if their colleague is there is. They're generally pretty nice, open people. You'll kind of know if they're not really interested in talking to you the same way to buyer like, because sometimes they're just there on a mission. They're like, I'm just, I'm, we're, I'm here with this buyer and we're just looking to get deals on a truck of pasta or something. But like most of the time they're pretty open and excited to discover new stuff.

30:16
Matt Merson
And honestly, Dan, these are natural foods distributors, right? Everybody in that room is in the natural food space. Whether it's your manufacturer, exhibitor to your left, the manufacturing team across you, everybody's got natural products. Everybody's probably a consumer of natural products. Everybody at that show is a customer.

30:35
Daniel Scharff
I love it. So the selling shows are pretty interesting because often you have to preload a deal that you're coming to the show with. And some people get aggressive because. So let's say you have the KHE Chicago show that happens, which is actually the winter selling show. It's in the middle of summer, but that's when buyers are coming to buy their winter inventory. They know they need all of this stuff that's going to get heavily shopped around the holidays. Cookies, hot chocolate, you can imagine all this, you know, like stuff that people are going to have for their big beasts. Right. And so they're there to get deals because that is a huge impact on their Bottom line. And the brands understand that too. So they're coming in with these deals. But I don't know.

31:13
Daniel Scharff
I've never gotten to the stage of a brand where that actually was a huge target of ours. I've always been more interested to be there just to build the relationships. But often you get the buyers who are like, I'm doing that day one, and then maybe I'll come around and discover some stuff. But other buyers are just that they're just there basically to do that. There are a couple of retail chains who are pretty famous of just like, they just walk around in a pack of eight and they just go and try to get half off of a truck from someone you know it's coming and you're like, do I do this deal with the devil? I don't know. Like, can I at least get onto shelf afterwards? So good for everyone to be prepared and talk to their CFO before they go.

31:47
Daniel Scharff
So you know what you're authorized to do on the floor. So one question I have for you is around free fills. Because when you get in with these distributors, you can authorize things like whether it's your sales team to like, hey, there's a new store. It's. It's in one independent store. And they're kind of used to, hey, if they order a new product, they get a free fill, which means one free case per store, per sku, something like that. And then, oh, well, there's this eight store chain that wants it. They want all these free fills, but you know, you can also have. There's death by free fill as well, because they aren't ever obligated to keep ordering from you after that free fill.

32:22
Daniel Scharff
I've definitely met some chain buyers, smaller chain buyers who just come around to those shows and they're like, yeah, well, why don't you give me a free shipper of each sku? And then if I like it, I'll think about it. Like, no, thanks, buddy. Keep walking. So how do you. How do you actually do the free fills? How do you decide who to prioritize? Different DCs, all that.

32:41
Matt Merson
I think the kiss of death is giving carte blanche. There's a box you can check in your onboarding paperwork around free fills that you know, should any customer ask for a free fill, they will execute it. And that is the box you do not want to check because then you will be billed back ad nauseum for free fills because every single rep will take advantage of it. They'll place your product in the stores and to your point, maybe it get reordered, maybe it doesn't. But the way I think about it is this. You know, I label accounts, A, B and C accounts, and I think it's pretty in line with what my broker community and what the distributor community might also label A, B and C accounts.

33:21
Matt Merson
Or you can align together any A account that comes on board, which is a chain, you know, these a hundred chains on the list, if they want a free fill, they can take it. You don't have to come to me for authorization. If it's a B account on the list, you know, I might cover 50% of a free fill and you don't need authorization. If it's a C account on the list, I might cover 25% of our free fill and they need to get prior written approval. So the rep will write into me and say, hey, I have this two store chain in Charlotte that, you know, natural grocers, whatever wants your product. And then the decision is mine. Whether or not I want to support the C account with a 25% discount or deeper.

34:00
Daniel Scharff
I like it. And I mean I definitely worked with brokers where you really just had to rely on their account manager in the region who is like, no. Like they're. You're going to have to give this chain free fills. They've got three stores, but they do volume and they're going to take it. And you just kind of have to defer to their opinion on all that stuff. It's like almost not even worth the time to debate it. But sometimes they just know. And then other times you just really need to rally up enough accounts to truly support a specific D.C. i mean.

34:27
Matt Merson
Jungle Jim's is a great example, right? Massive store out of Cincinnati. You know, you would never know about it unless the local broker said, no, this is a store where you have.

34:36
Daniel Scharff
To do it for. What are some other local gems like that around the country? Totally. Yeah. Jungle Gyms. Definitely met them at the KHE show and got an order from them that, well, that was pretty cool. I don't know if I got a second order from them. They might have just enjoyed the discount and maybe it didn't do great, who knows? But any others that you think are sleepers or undercover killers?

34:54
Matt Merson
Well, you got Stu Leonard's here in New York with about five stores. You got vintage grocers in the LA Market, in NorCal, you got Rainbow Grocers. There's a handful of like one or two or three chains that are definitely worth it.

35:07
Daniel Scharff
That's cool. I love that vintage grocers as well. What a cool location. Shopped by some very influential people as well. You see. Definitely a celebrity hangout spot. What are some others that I would put into that category? Maybe mustard seed market in the Midwest. I know they do just a ton of volume. Yeah. And I would probably happier grocery I would put into that also in New York that I just. That place is always packed. That's a really great account for people. Okay, so let's see, maybe one more question here that I would like to ask.

35:39
Matt Merson
One of the things, the second most question I get asked is around sell sheets. Like because you need the sell sheet for the show and what should you include on it?

35:46
Daniel Scharff
And well, that's where I was going. So if you would let. Thanks for the setup. All right, so that was what I was going to ask. Actually the next slack question, we get so many about sell sheets. Right. And this particular one, the question that she was asking is specifically just around like, hey, should I list MOQs on there? You know, like price tiers, what do you think? Any best practices overall for sales sheets? And let's definitely talk about whether to actually include your pricing and tiers and stuff on there.

36:15
Matt Merson
Yep. I would say absolutely no to that because you know, as you scale the business, the sell sheet is going to go into multiple places and multiple distributors. And the pricing for one distributor might be different than a pricing for another. The MOQ to the distributor might be different. But secondarily when you start to push these down to the retail trade, you know, one distributor's MOQ is going to be different than another distributor's MOQ. One could say it's a 20 case minimum. Somebody else might say it's a $300 minimum. So there should absolutely be nothing about the distributor's arrangements on how they go to service accounts in the market. If you want to create one sell sheet that you can use at trade shows, that you can deploy with your distributor partners, that you can deploy to your retail partners.

37:00
Matt Merson
The front of the sell sheet should really have your usp, a picture of your brand. The why the unique selling proposition. The back should have specs. It should have pictures of each of the SKUs. It should have the case pack the size. It should have any, you know, certifications. Is it non gmo, Is it gluten free vegan? It should also have the UPC barcode of the selling unit. So on the spot somebody could enter it into their system, set it up and then it'll start scanning at the register. Nutrition Facts, panel, ingredient statement with each SKU shelf life, whether it's refrigerated, frozen or shelf stable, needs to be slacked out.

37:41
Daniel Scharff
It's tough because also like, I mean, like, if you're working with a KHI or something and you know, if you're delivering into different DCs, the price is actually different for their, the wholesale price for, at the different DCs, so that's not really even going to be right. Also, are they going to like pick up from you or going to deliver? You're also definitely going to change that stuff over time if you have different, you know, pallet requirements. It all sounds great in theory, but then like, people just order less than you think and you have to get adaptive to it. But I think typically people just say, you know, throw the MSRP on there. But, you know, even that I think can be a little tricky because you're like, well, what is different for natural and conventional?

38:16
Daniel Scharff
And I don't want to piss conventional people off because the margin's not there for them to get, you know, 50% margin and hit my MSRP. Where do you land on the MSRP?

38:25
Matt Merson
One I, I leave it off because it can age over time. Maybe get hit with a tariff and it changes. I mean, the market's changing so much. And when you just think about the pool of contacts that you have, you might have 2, 3, 4, 10, 15, 25, 50 distributors, but you're going to have thousands of retail partners. And ultimately the sell sheet has got to be as neutral as possible and designed to talk to the retail partners. Some of the stuff that you're mentioning about MOQ case size should really be on a PDF spec sheet that has the UPC code, the GTIN code for the box. Any other particulars around specs of the case size, the unit size, if there's an Interpac, all of that should be on a spec sheet that's really only used to distributor community.

39:13
Matt Merson
But at the trade shows, you're really, you know, if you're at a UNFI trade show, you assume you're past that step. So now you're really talking to retailers and consumers.

39:21
Daniel Scharff
So when you're at that trade show, you know, my first year being there, I felt totally lost because I really didn't know the accounts then. Like, I knew the bigger ones, but I definitely didn't know who any of the buyers were. It was so hard for me, I think, to really be effective because I'm totally willing to get out in front of the booth and grab Anybody, but I didn't know who to grab, and that's a tough thing. And I would say the second year, I knew pretty well because I just spent all year trying to figure out our strategy and pitching so many of these accounts, even over LinkedIn and all these different kinds of opportunities.

39:51
Daniel Scharff
And, okay, so now it's many years later, and I feel like I want to play if they ever do CPG sales jeopardy, like, this account is blah, blah, and the buyer's name is like, oh, I know this. Like, I feel like now I know pretty well, but definitely not as well even as a lot of people did. You feel like there's a way you can fast track that learning curve? As an early brand showing up to a show, you've got your trade sheet, but who do you try to give it to? Like, how do you feel like you can really be effective in the early years?

40:18
Matt Merson
Dan, this is one of my favorite sayings of all time, and I say it every year, and I largely say it around Expo West. But what I would say is this, is that the trade show itself is the output of all the work you do leading up into the trade show, which is the input. And if you don't do the work leading up into the trade show, your output will be bad. If you do all the work, you know, trying to engage with buyers, trying to engage with, in this case, UNFI reps, contacting them, trying to get them to your booth, make sure buyers are attending, maybe you have some sort of premium, like, hey, if you come to my booth, I have a amex gift card or Starbucks gift card for you and your buyer.

40:58
Matt Merson
All of that work leading up into the show will determine how well you do at the show.

41:03
Daniel Scharff
I totally agree with that. And I would have hustled all year trying to build relationships so that, yes, that was just the culmination of all of that work. Getting to actually see the person. And because they know I've followed up with them a bunch of times and have shown a real interest, they're more likely to stop. I'm like, oh, hey, I just want to introduce myself. I'm Daniel. I've hit you up a bunch of times. We have, you know, as you know, we have this traction that I've been sharing with you. So I. I totally agree with you. I've heard a couple. I mean, usually that's what I hear from people, something like that. A couple times I've heard brands who are like, yeah, I don't know, we. We just don't believe in that.

41:35
Daniel Scharff
We show up and we don't really even stand in front of the booth. We just kind of like let people come to us, and if it's meant to be, that's it'll happen. Like, they'll come and find us. I'm like, yeah, that's great. You know, I like to be open to different perspectives, but I think that's crazy. Like, why would you do all of this and then waste your time not going and aggressively chasing all the leads? What are you even doing at the show if you don't want to go and attack everything or at least like, the ones that you're really looking for? They should never pass your booth without you seeing them.

42:01
Daniel Scharff
Because it's so easy for people to walk by stuff and just not turn their head or not really take it in, or they're thinking about their chores for the week or their kids soccer game and they just don't lock in with your booth. Like, got to be out there. You got to know as well as you can who you're looking for and stop them somehow. Any, by any means necessary.

42:18
Matt Merson
And this may be crazy, but we're already working on Expo west and we're six months out, so really that any trade show you do is the output of the work you do leading up into it.

42:29
Daniel Scharff
My only hope is that part of your plan is to be near us so that we can drink all of your delicious coconut water during the trade show. As usual. I got you. Usually you're there fueling and hydrating us, and it's so delicious. And I did buy one at Equinox actually the other day after my workout, that you were the only brand that I knew that had somehow gotten placement in the printing house Equinox here in New York City. So congratulations on however you did that. Okay, so last question. This actually doesn't come from the slack. It comes from a lot of people who just have messaged me personally or people that I know or tried to mentor. So for somebody who wants to be the next Matt Merson, they want to be a sales pro.

43:08
Daniel Scharff
There are a lot of people who, you know, break into CPG sales early on in their career, and they want growth, right? Salespeople always, like, you know, pretty ambitious. They want to get better and learn and grow. What do you think are just some of the most formative experiences, the best things that you can go after? If your goal is to get to be the head of sales eventually for cool CPG company, first and foremost, I.

43:32
Matt Merson
Would say it's your network, right? You're every sale you make, you're building the trust of a customer, a distributor, partner. But, you know, there's going to be a lot of things you don't know. And that's what I really love about the channel. It's, you know, 30,000 people connected. It's part of your network, an extension of yourself. You know, I like to give back as much as people have given me. So I definitely think you should rely on your network. It's a good question.

43:57
Daniel Scharff
Even to get your first job is tough. I will say the best for me. And I mean, I don't know everything that you know and ever will. I know a very small fraction of it, but it was very well received once when somebody applied for their first sales job with me, but they actually sent a video. Not in a weird way, in a good way. It was just embedded into the email, like, hey, here's who I am. By the way, I also recorded this video for you, and it was not weird at all. It was just a super authentic, passionate overview of just, hey, here's why I love this brand. And I just really liked the person's vibe. And everything they sent hit with me was like, yes, this, like, this person really gets what we're working on here.

44:41
Daniel Scharff
And at least, you know, from a culture perspective, 10 out of 10, you know, for. But for people at least trying to, like, really break in and get that first great sales job, that'll be a good learning opportunity as well for them, because there are plenty of jobs out there that are not a great learning opportunity. You're just doing something that might not even progress your career. Any recommendations on those early ways to reach out to people or how to even know if it's a good company you should work for? Yeah.

45:05
Matt Merson
I mean, so two things. One, I would say, you know, you have to do your research. You want to. You want to be in a category that's growing. You want to be in a brand with that's growing. You want to be in a brand that has Runway, that has financial backing, that has experts, you know, at the head of the ship. But the other thing, you know, when you talk about just trying to get it break into the industry, a lot of times I've seen the sign that says attitude over skills, and that's why I love that video example. But if you have an open mind and it can do attitude, people will want to teach you the right things to do and will make you successful. So come in with an open mind and the right attitude, and you will be fine.

45:44
Daniel Scharff
I like that even, I mean, on my team now, we're not hitting stores, you know, the same what we do sometimes just to see all the great brands from our community, but not in the way that salespeople are. But I think that's the thing that I also appreciate the most for my team is just a great attitude because it's. It's infectious. And also, I mean, this thing is hard to do in general. And when you have people with a great attitude, you're just so grateful to have them on the team. And it just is so fun to work with them because, yeah, they're just open and ready to do stuff, ready to take the load off for you and run with it.

46:17
Daniel Scharff
So I really appreciate that, just because it's not just a great attitude, but it just is so energizing, I think, for the whole team. So, Matt, I'm going to wrap us here. What I know is that this will not be the last ask me anything that we do with you because we've only gotten through a small fraction of all of the questions that I really want to get a chance to talk through with you here on the podcast. But I do want to say thank you for helping us get through a bunch of the early ones and really excited for everybody to get to learn from this. And just as we're wrapping here, Matt, can you just remind everybody how to stay in touch with you, how to support Once Upon a Coconut?

46:53
Matt Merson
Yeah, for sure. And listen, I appreciate you having me on the show and I'm always willing to chat and love chatting with you and the team, but I'm very active on the CPG Slack channel. You can just message me directly there. I'm Pretty active on LinkedIn too, if you want to message me there, but pretty accessible guy.

47:10
Daniel Scharff
You're the man, Matt. Thank you. I really appreciate you're always open just to drop all of these nuggets and they're all juicy. All right, thanks, my friend.

47:20
Matt Merson
Hope everybody enjoys it. Good to see you, everyone.

47:24
Daniel Scharff
All right, everybody, thank you so much for listening to our podcast. If you loved it, I would so appreciate it if you could leave us a review. You could do it right now. If you're an Apple podcast, you can scroll to the bottom of our Startup CPG Podcast page and click on Write a review. Leave your company name in there. I will try to read it out. If you're in Spotify, you can click on about and then the star rating icon. If you are a service provider that would like to appear on the Startup CPG podcast, you can email us at partnershipstartupcpg.com lastly, if you found yourself grooving along to the music, it is My Band. You can visit our website and listen to more. It is superfantastics.com thank you everybody. See you next time.