Derek Kilpin: Improving with Age

Derek Kilpin: Improving with Age

SHARE

Vital Stats

  • Players: Derek Kilpin and Wayne Visser
  • Company: Great Domaines
  • Est: 2000
  • Contact: www.greatdomaines.co.za • +27 (0)11 778 9300

Ancient Rome played a pivotal role in the history of wine-making and had a profound effect on today’s major wine-making regions in Italy, France and Spain. Outstanding vintages from the best vineyards sell for hundreds and even thousands of rand.

It’s this ‘fine wine’ that Great Domaines has been bringing to the South African market since 2000, when Wayne Visser launched the business part-time.

The business grew to become a full-time endeavour, and in 2007 he was joined by Derek Kilpin, who has become the face of the company. Both avid wine lovers, their biggest challenge was to develop and grow relationships – both with customers and with exclusive wine-makers, a process which can take three to four years.

Matching supply with demand

The balance between supply and demand can be tricky. Luckily, Visser had been running the business part-time for a number of years.

“The demand for rare and sought-after wine is huge, but the volumes produced are not,” says Kilpin.

“Producers want to deal with importers that have a track record, pay their bills, and order every year. In the early days, because we already had a few famous names on our books, this enabled us to create a ‘CV’ so that we could source more and increase our annual allocations. It would be very difficult to start this kind of business from scratch now because of the time required to build partnerships with producers.”

Related: Don’t Give Up on Your Dreams, Just Change the Strategy

 

Entrepreneur-Newsletters
Entrepreneur’s daily tips & insights delivered direct to your inbox.

Taking care of customers

Kilpin has built a customer base of around 2 000 wine lovers, mainly through tastings at exclusive wine shows and at the company’s premises, and through word of mouth. “You’re selling a premium price product, between R800 and R3 000 per bottle. ”Because the availability of wines fluctuates, many of our customers agree to put their names on a waiting list and to be informed as their favourites become available.”

Kilpin stresses the importance of integrity and honesty. “We down sell. It’s the art of narrowing a customer’s expectations and matching them more effectively with wines that best meet their desires. We often encourage people to buy only a few bottles, taste the wine, and let us know if they like it. That is how we know they will buy from us for a long time into the future.”

Managing the money

It’s this relationship management skill that enabled Great Domaines to achieve a turnover of R13 million in the last financial year, up from R9,5 million the previous year.

Sales and acute financial management have also played a key part. “Ours is a cash intensive business. The biggest challenge is managing cash flow. When a shipment is delivered, you have to pay big invoices, so you have to sell whatever is in the cellar. There’s an acute balance between all the elements.”

Related: Business Lessons from Kumaran of Spartan

Key lessons

  • Relationship building can take time, and the process can’t be rushed. Start fostering relationships today, but understand you might only see the benefits of this focus in a few months or even years – but once you do, it will be worth it.
  • If you’re importing a niche product, and your business depends on this supply, make sure you have a good track record. Producers and manufacturers want to see that you pay your bills, order consistently, and have a good track record. This will ensure you become a favoured client who enjoys predictable deliveries.
  • When you’re selling an expensive niche product, relationships are key. Customers must trust your advice and that you have their best interests at heart – this will ensure long-term, loyal clients.

 

 

Monique Verduyn
Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.