By David Schwartz, Partner, SOS
david@sosbusinessdevelopment.com

Wholesale should be the steady, predictable revenue engine of a coffee or specialty food company. Instead, for many founders, it’s a quiet leak.

Accounts that don’t reorder.
Pricing that hasn’t been adjusted in years.
Sales reps “working on it.”
Distributors sitting on stagnant SKUs.
Margins that look fine on paper—but thin in reality.

You don’t notice the leak in one dramatic moment. You notice it when cash feels tight even though volume is “up.” That’s not a volume problem. That’s a wholesale problem.

What Is “Wholesale Leaking”?

Wholesale leaking is incremental revenue and margin loss happening across your channel without visibility or correction. It shows up in subtle ways:

• Accounts ordering 10% less each quarter
• Special pricing never revisited
• Freight quietly eating margin
• Reps closing low-quality accounts
• Distributors favoring other brands
• No system for reactivation
• No accountability for follow-through

It’s not dramatic. It’s operational. And operational problems compound. “Most founders think they need more accounts. In reality, they need to fix the accounts they already have.”
— David Schwartz, Partner, SOS

Why Wholesale Leaks Happen

Founders and operators are stretched thin. Roasting, sourcing, payroll, marketing, production. Wholesale becomes reactive.

Someone places an order.
Someone answers an email.
Someone promises to “follow up.”

But no one owns the system. And wholesale without a system always leaks. “Wholesale is not a sales activity. It’s a channel. And channels require structure.” — David Schwartz, Partner, SOS

The 7 Most Common Wholesale Leaks

1. Unexamined Pricing
   • Legacy pricing left untouched for years
   • Freight and input costs absorbed quietly
   • No tier discipline
2. Dead or Dormant Accounts
   • No reactivation cadence
   • No structured follow-up
   • No segmentation by potential value
3. Distributor Drift
   • No regular check-ins
   • No account mapping
   • No velocity tracking
4. No Clear Ideal Account Profile
   • “Anyone who wants to buy” becomes the strategy
   • Poor-fit accounts drain service resources
5. Sales Without Margin Discipline
   • Discounts to close deals
   • No minimum standards
6. No Channel Strategy
   • Cafés, grocery, foodservice, hospitality all treated the same
   • No focused push
7. No Owner-Level Oversight
   • Wholesale delegated but not directed

“You can’t fix what you don’t measure. Most wholesale operations aren’t measured — they’re tolerated.”
— David Schwartz, Partner, SOS

What “Dialed In” Wholesale Looks Like

When wholesale is dialed in, you see:

• Clear pricing architecture
• Defined ideal account profile
• Segment-specific messaging
• Distributor accountability
• Reactivation systems
• Margin protection discipline
• Regular performance reviews

It’s calm. Structured. Predictable. And profitable. “Dialed in doesn’t mean aggressive. It means disciplined.” — David Schwartz, Partner, SOS

Volume Is Not the Goal

Many roasters chase wholesale volume. More doors. More accounts. More SKUs. But more undisciplined wholesale simply means more leak points. The goal isn’t volume. The goal is profitable velocity. “A smaller wholesale base with discipline will outperform a bloated account list every time.” — David Schwartz, Partner, SOS

The Real Cost of Ignoring the Leak

Let’s say:

• You do $2M in wholesale.
• 8% of that is quietly underperforming or underpriced.
• That’s $160,000 of erosion.

Not catastrophic. But meaningful. And it compounds annually. Most owners feel the pressure but can’t see the cause. They assume:

• The market is soft.
• Competition is tougher.
• Costs are just higher now.

Sometimes that’s true. Often, it’s leakage.

Dial In Before You Scale

Before you add a sales rep.
Before you go to another trade show.
Before you chase national distribution.

Dial in what you already have.

Review:

• Pricing discipline
• Margin by account
• Account concentration
• Reorder frequency
• Sales follow-through
• Distributor performance

“Founders don’t need more complexity. They need clarity.”
— David Schwartz, Partner, SOS

Final Thought

Wholesale should not feel chaotic. It should feel engineered. If it feels unpredictable, strained, or thinner than it should be, there is likely a leak. And leaks don’t fix themselves. They require direction. They require ownership. They require someone willing to look under the hood. “You don’t grow wholesale by pushing harder. You grow it by tightening it.” — David Schwartz, Partner, SOS

If you run a specialty coffee or specialty food brand and wholesale feels heavier than it should, it may not be a growth problem.

It may simply be time to dial it in.

David Schwartz
Specialty Food + Coffee
Outsourced Executive Sales + Marketing Director
Phone 760.636.4559
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Email