Wholesale Pricing?

[MaskCraft]

Can anyone give me a good rule of thumb, or examples, of wholesale pricing to liquor stores and bars/restaurants? Is the pricing the same for retail and beverage service outlets? Obviously a bar is going to make a much larger profit on a bottle than the retail store. Is pricing the same to both industries?

Thank you!

[Mash]

Depends on what type of sales entity your state works under, Control, 3 tier, or Open and all the permutations thereof. In Virginia, Licensees purchase directly from the ABC store at retail, same as the consumers.

[bluestar]

Three tier, generally, the distributor and the retailer expect to make a 25-30% margin, which means the markup is usually less than 40%. Don't forget the distributor usually has to add state excise tax if you did not. The end result is the retail price is about double the manufacturers wholesale price, and the discount from retail is in the 25-30% range from retail to the retailer. Don't assume that the margin for the bar/restaurant is better than for the package store. That is true for low-priced spirits, but if you are selling a premium craft brand, the price of the spirit starts to become a significant portion of the cost of a cocktail, and anything that pushes the price of a cocktail up from the base price can meet price resistance from the consumer.

[bluestar]

Again, don't assume that the bar has a better margin than the package store. In fact, it can be worse for a premium priced craft brand. Typically, the margin for the retailer is 25-30%. But while your consumer may not object to paying $50 for your bourbon instead of $25 for Makers, they may object to paying $15 for an Old Fashioned made with your bourbon instead of $12 for Makers or $10 for house bourbon, the difference representing difference in cost plus margin for the premium brand. In fact, you might have to offer an extra discount to get a bar to put your premium craft brand on the menu for a feature cocktail.