3 Tier Distribution. Product Mark Up? (NC)

[jdlev]

Hi guys,

Trying to put together a business plan that can give me an idea on cash flow for our prospective microdistillery.

I called the North Carolina ABC pricing & auditing division, but have yet to hear back.

We are looking at producing some high quality rum, flavored vodkas, and whiskys.

I was hoping people would share their experiences with having to use distributors what type of profit margins they're seeing per bottle (750ml)?

Any tips or advice would help give me a mile high view of what to expect. Thanks!!!!!!

[Scott @ Twenty2Vodka]

As a new supplier writing a business plan, I suggest projecting to get about 50% of the final (target) shelf price. For example, if the target shelf price of your high quality rum is going to be $30 per unit, project in your plan to receive about $15 per unit. The other $15 is going to go to broker markups, retail markups, and state excise tax. Once you are up and running, the $ you receive as supplier will likely be a little more than 50%, but you will look like a superstar if you make more than you project vs the other way around.

Best of luck,

-Scott