Distiller/supplier margin

[pogriallais]

I'm working on sales forecasts and financial projections for my proposed distillery. I'm just wondering what your experience has been with markup or margin on your products. Of course a lot will depend on OPEX, and income of the individual distillery. The large distilleries probably have a different margin to the the micros.

How does this example below compare?

For example whiskey product (per bottle):

bottle, grain, yeast, water, cork, lables, box: $4.00

Barrel:$0.72

Delivery to distributor:$0.80

Excise:$2.14

COGS:$7.66

Wholesale price:$10

Margin:$2.54

Distributor:30%

Retailer:30%

Sales tax:$0.75

Bottle on shelf: $23.99

Thank you for any help you can offer.

[Kristian]

Items your missing form your COGS:

box and dividers (unless your glass arrives with this)

barrel

tamper evident seal

storage during maturation

Also, there is no freight/delivery to the distributor, some distributors separate this from their margin.

[jwymore]

Also don't forget to roll your fixed overhead and non-product related variable overhead back into your financials which will be some amount per bottle depending on proposed production volume. If your production volumes are fairly low the overhead can eat you alive. :-)

[pogriallais]

Thank you for the help, much appreciated.

I have edited post above to reflect COGS left out. What range of cost would the tamper evident seal fall into?

When you mention storage- is this a fraction of the cost of the floor space?

Labour hasn't been included or other fixed overheads such as electricity, gas, insurance, commercial rates, business loan or licence costs as their cost per bottle will fluctuate depending on sales volume. I won't be taking a salary unitl the volume of sales can sustain such.

[kkoch]

Another post where distillers are referencing paying for shipping costs. If you guys are doing this (excluding those that ship to a consolidator/storage warehouse/fulfillment house), you are absorbing a cost that your distributors should be paying. Now, this may be different for State Control Board situations; so if you don't call that difference out it looks like you are giving away good money!

As a former distributor - I would have LOVED it if you'd pick up my freight costs which were huge on LTL and multi-stop runs!

[bluestar]

30-30-30 is a good rule of thumb. You should be looking to get 30% margin in your wholesale over your COGS, perhaps minus tax. So should distributor. So should retailer. Distributor will add ship in and ship out and state taxes. Most places that means your FOB will be about half of retail. This has been mentioned on past threads.