Distributors Cut

[brijen]

$100.OO RETAIL

$70.00 MY SELL PRICE
$ 4.11 STATE TAX I PAY
$ 8.00 FREIGHT ONE WAY.

KEG SOLD TO DISTRIBUTOR $57.89

This doesnt seem to be the deal I wanted. What is your opinion

Thanks Brian

[Bierkoenig]

Per 1/2 bbl, 20 l, 750 ml bottle? What volume are you talking about? What market are you in? Need more info.

[ChesterBrew]

I thought you could self-distribute in VT with a wholesaler's license...

http://www.brewersassociation.org/pages/government-affairs/self-distribution-laws

To be honest, your numbers are consistent with the distributor model as I have seen it in 3-tier states, which is why I'm trying to avoid that route if at all possible.

[einhorn]

You should not be paying freight. Most pricing is FOB brewery and kegs should also returned on distributor's dime.

[gagners]

Brian,

Check out the wholesaler's license. I know several who have them. Call Steve at Drop-In or Sean.

It's a $1K license, but it only takes about 30 kegs sold through your current distro deal to justify it.

Steve
14SBC

[brijen]

distributor

I/ we have a whosale license. This works well local. Butt… I would like to move out father…. I want to pay 25 to 30 % with freight include one way. I ran a much larger business before this and feel I am being shafted. Are these the correct numbers~!~!~~~

[Bierkoenig]

What package are you retailing for $100? If it's a half barrel you need to raise your prices.

[ChesterBrew]

What package are you retailing for $100? If it's a half barrel you need to raise your prices.

I'm guessing 1/6.... 1/4 at worst.

[einhorn]

Worst case scenario, raise your prices to what you need.

$100 for a 1/6 bbl is out of this world. Charge that much and you won't have to worry about sales, because they will be non-existent unless you make amazing, highly sought-after beer.

[brijen]

I just used $100 for easy math to show the percentage. Most of the 5% beers retail here for $137 FOR 15.5 AND A 5 1/16 IS 42% OF A 15.5 PRICE.
so it would be $58.00

[callmetim]

$100 for a 1/6 is not unusual although it would have to be a big beer or limited release. barrel aged beers routinely wholesale for $200 for a 1/6 and one of my accounts told me he recently paid $325 for a barrel aged 1/6.

We self-distribute and do 1/6 only. Our prices for a 1/6 range from $50 - $80 and our accounts think they are getting a bargain.

[brijen]

Thanks Tim. everything we sell is 6% and below so i will be in the 137 range. When you say you self distribute, how many miles away is your furthest customer. I am remote and my radius only goes south. Canada is 2 miles north of me. 20 taps local with in 60 miles.

[grassrootsvt]

Vermont...

All distributors tend to take a 30% margin.
In Vermont, it would look more like this:

Excise Tax is paid by the Distributor, not by you, the brewer (unless you sell growlers at your brewery, then you have to pay the excise tax).

6% abv or less, in VT, is $.265 a gallon. Thus, 1.33$ in taxes. Not 4.11$.
Ross Express can ship a pallet anywhere in New England for 80$.
You can fit 40 x 5 gallon kegs on a pallet. That's 2$ per keg, freight cost, each way, not 8$.

A brewery can hold a wholesaler's license in Vermont. Annual Cost is 1,000$ per year. Year runs May 1 through April 30.

If you sold a 5 gallon keg to a distributor at 60$, it would look like this:
60$/.7 (30% margin)= 85.71$
Then, 1.33$ in tax, and 4$ or so in freight. You would be right around 90$ to a bar for a 5 gallon keg.

Why don't you purchase the wholesaler license and distribute it yourself if all of your accounts are within 60 miles?