Distributed Retail vs Tasting Room Retail Price

[38°]

Does anyone out there have any advice or thoughts on pricing for off-premise retail vs in-house retail? Our distributor is worried that retailers will react negatively to the gap in off-premise retail prices charged vs our tasting room retail. On the flip side, we don't want any way for a retailer to undercut us, especially locally. As an example, we would see our bourbon in the tasting room at ~$45 vs ~52 at off-premise retail. Thoughts?

[Red Pine]

My advice and how I handle this is set your price the same as the local retailer(s). You absolutely don't want those local retailers to feel spurned. It keeps the price equal in the eyes of the consumer and avoids the perception that they are getting ripped off at the local bottle shop (hence the spurned feeling) and puts a few extra dollars in your pocket. Now the asterisk here is I'd only do this for the retailers in your same city, you can't control retailers further out in your distributors network especially if/when the distributor likely is charging delivery fees and so on.

[38°]

Good advice, thank you. It's quite a balancing act to get this right and we are making it up as we go here.

[Silk City Distillers]

While we set a "MSRP", retailers are free to price it where they want, and they are frequently a bit less expensive than in the tasting room.  Though, we don't ever discount off the "MSRP" at the distillery.  Any small premium they pay at the distillery is just part of the value-add experience of it all.  Why do you feel you need to underprice your product where it's made?  This is the absolute easiest place to justify it's value, and there is no price competition.

Customers buying in the tasting room are very different from customers purchasing at retail, thus any price differential is irrelevant.  We're always sending customers to retail partners when we run out of special release stock, when the tasting room is closed, or if they are too far away to swing down.

[38°]

Point taken. Mostly the concern is in our very immediate area. There is only one other place you could buy it and that is 5 minutes away at the only grocery or liquor store within another 30 minutes drive. 

We can't really go to distribution without them for various reasons but also are concerned they could negatively impact our onsite sales.

As a vacation community convenience and one stop at the local grocery might be attractive and obviously margins are much better onsite.

It may be unfounded concern but it's a consideration anyways.

[Glenlyon]

Most of our retailers charge way more than we do and don't seem to care. We used to try and convince them to lower the price until one day a retailer said to us "Why lower it if it's selling?" People want to spend money it seems.

[navenjohnson]

We always try to price things and sell them to bars or retailers with an understanding of the MSRP.  They are getting between 20-25% off retail and should be on;y be adding that back in for the sale price. Also, your bottles should cost slightly more AT your distillery because the customer is getting the experience along with the purchase.