The parallel market for spirits is a form of trade that capitalizes on price differences. This type of market offers competitive advantages for manufacturers, distributors, and consumers alike. However, it also involves certain legal, logistical, and quality risks and challenges. In this post, discover how the parallel market for beverages operates and the process of export and import.
What is a Parallel Product or Parallel Beverage Market?
A parallel product or a parallel network refers to a product that is imported or sold when a manufacturer sets a lower price in a specific area. The parallel market for spirits benefits most from this type of condition, as it takes advantage of the surplus production and stock of top-brand alcoholic beverages.
The goal is to achieve the best consensus between manufacturers and wholesale alcohol distributors to provide the best supply chain. Typically, those who handle this type of market offer a complete importation system for beverages, including invoicing, collection, payment, transportation, and more.
Surplus Stock in the Parallel Beverage Market
As mentioned, the parallel market occurs when a spirits producer applies a lower price in a certain area. This is an action carried out for commercial strategy, tax regulation, seasonal demand, or overproduction. This causes a surplus of product stock, which can be acquired by wholesale whiskey distributors om other areas where the price is higher, thus obtaining a larger profit margin.
The surpluses of stock can be due to:
- Production: These are generated when the manufacturer produces more quantity than it can sell. This may be due to an erroneous estimate of demand, cancellation of orders, or consumer preferences.
- Season: This occurs when the manufacturer launches a limited or special edition of a drink for a specific time, such as Christmas or Halloween. Once that date has passed, they lose their appeal or expire.
- Image Change: A surplus that originates when the manufacturer changes the design or packaging of a product. This change can be due to brand renewal, adaptation to market trends, or improvements.
Services for Distributors
A key element in the parallel market for beverages are the distributors. They are the intermediaries responsible for buying and selling products, connecting manufacturers to consumers. Distributors of Coca Cola, wine, or wholesale gin can benefit from a range of services that facilitate and enhance their commercial activity.
Within their roles in the parallel network in the import or export of beverages are:
- Supplier Search: This involves locating and contacting the manufacturers or distributors who offer the products they wish to buy. The goal is to access a wide variety of top-brand products at competitive prices and to negotiate the best purchase conditions.
- Customer Search: This allows locating and contacting the distributors or consumers who demand the products they wish to sell, whether national or international.
- Administrative Management: This involves carrying out and processing all the necessary documentation for buying and selling products. It includes invoices, contracts, permits, licenses, and certificates, to comply with current legal regulations and avoid penalties.
- Financial Management: Refers to managing the collections and payments related to the purchase and sale of the products, such as transfers, checks, and insurance. This ensures solvency, liquidity, and profitability in operations, avoiding non-payments or fraud.
Importation and the Parallel Market for Spirits
The importation of spirits is one of the main activities of the parallel market. It allows access to top-brand products at lower prices than those of the official market.
However, it involves a series of risks and challenges that should be analyzed:
Compliance with Legal Regulations
The importation of spirits is subject to a series of legal requirements that vary according to the country of origin and the destination country. These can affect everything related to taxes, tariffs, permits, licenses, labels, packaging, and traceability. It is necessary to know and comply with the current legal regulations in each case and to have the advice of experts in the field.
Quality Assurance
Another aspect to evaluate in the importation of spirits is quality control. This is responsible for ensuring that the imported products meet the safety, hygiene, and authenticity standards demanded by the market. It is necessary to verify the condition and origin of the products, as well as their expiration date, composition, alcohol content, and flavor.
Logistics Management
The parallel market for beverages in its import phase requires logistics management that ensures the transportation, storage, and distribution of products appropriately. It is crucial to choose the specific means of transport according to the type of spirits, the quantity, and the destination of the products. It is important not to forget to have a warehouse that offers optimal conditions for conservation, handling, and delivery of products.
The Process of Exporting Spirits
Exporting spirits is another of the main activities of the parallel market, which allows access to new customers and business opportunities.
However, it involves a series of aspects to consider, such as:
Market Knowledge
Exporting spirits requires actions that allow understanding the market to which it is directed. For this, a study must be carried out in terms of demand, competition, preferences, habits, consumption trends, legal, fiscal, customs, and health regulations. In this way, it is possible to identify and evaluate the opportunities and threats presented by the target market, adapting the offer and commercial strategy.
Adapting the Product to the Beverage Market
Another important aspect of exporting spirits is adapting the product to the characteristics and demands of the target market. Work can be done on the design, packaging, labeling, language, pricing, and promotion, as well as on the flavor, composition, alcohol content, and quality. It's crucial to respect the rules and tastes of the market, and to differentiate the product from the competition without losing the essence and value of the brand.
How to Improve Purchase Price?
Both in the import and export of spirits, the price is of great importance for maintaining the parallel beverage market. To access and stay competitive, it is necessary to seize opportunities and have a network of contacts or suppliers. These enable locating and acquiring surplus stock available under the best conditions.
Other aspects to consider include supply and demand, which will determine the appropriate price, as well as negotiation, which evaluates factors such as volume, terms, transportation, payment, and warranty. Another factor that can help improve the purchase price is comparison, as optimization can be achieved through an analysis of the different options available in the market in terms of price, quality, availability, variety, and service.
Legal Aspects of the Parallel Market for Spirits
The parallel market for spirits is regulated by a series of legal aspects that affect manufacturers, distributors, and consumers alike. Its aim is to protect the rights and interests of all parties involved, as well as to ensure the safety, quality, and legality of the products.
Some of the most relevant legal aspects include:
Definition of Spirit Drink
In the parallel beverage market, a spirit drink is defined as an alcoholic beverage intended for human consumption with a minimum alcohol content of 15% vol. It may be produced directly or through distillation, maceration, or similar procedures involving ethyl alcohol. It must comply with regulations concerning all aspects related to its production and handling.
Intellectual Property
Refers to the set of rights that manufacturers have over their creations, such as trademarks, designs, patents, and trade secrets. These rights allow them to exploit and benefit from their creations, and prevent others from copying, imitating, or counterfeiting them. Wholesale champagne distributors and consumers must respect the intellectual property of manufacturers, and ensure that the products they purchase and sell are authentic.
Tax Regulations Related to the Parallel Beverage Market
Refers to the set of taxes and duties applied to the production, import, and export of spirits. These vary according to the country of origin and destination. These taxes and duties impact the final price of the products and can create competitive advantages or disadvantages for manufacturers and distributors.
Health Regulations
One of the most important, it refers to compliance with requirements and controls established to ensure the safety, hygiene, and quality of spirits. These vary according to the country of origin and destination, affecting the composition, alcohol content, labeling, packaging, and traces of the products. Wholesale vodka distributors and consumers must comply with the current health regulations in each case, verifying the condition and origin of the products
Specialists in the Parallel Market of Production Surpluses and Stocks of Top-Brand Beverages
If you are looking for companies specialized in the parallel market of production surpluses and stocks of top-brand beverages, you are in the right place. A leading parallel beverage market offers distributors all the services of logistics, legal regulation, and the best price. Moreover, it provides extensive experience, great professionalism, and an excellent reputation in the sector. Its main characteristics are:
- Market Knowledge: Deeply understands the operation, characteristics, trends, and opportunities of the parallel market for spirits. It also has a network of contacts and suppliers that allows access to the best products, prices, and marketing strategies.
- Adaptation to the Client: Adapts to the needs, goals, and preferences of each client, offering a personalized, flexible, and efficient service. It covers all, or most, phases of the commercial process, from search to delivery of products.
- Quality Guarantee: Ensures the quality, safety, and legality of the beverages purchased and sold. Best of all, it meets the highest standards of service and customer satisfaction, supported by its track record and references.
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