Retailers marking up over 50%... help!
I'm selling hard cider, not beer.
Before I launched my cider, I spent some time visiting prospective accounts and discussing markups, price points, bottle packaging, labeling, marketing, etc. General product research. One thing everyone told me is that the standard markup is 25-30% from me to a distributor and then 25-30% markup to the retailer. I'm self distributing in Oregon now so able to eliminate the distributor but I'm noticing a nearly universal markup of over 50% from my wholesale price in my ~20 accounts. Off-site grocery stores or on-site bottle shops, it doesn't matter.
I sell for $8 per 750ml and I'm seeing it on the shelf for $12 and up. This makes me grumpy because I wanted to target the $10 price point, hence my $8 wholesale price. One retailer started out at $10.50, but just bumped up to $12.50, probably based on prices he saw everywhere else.
It is a pretty awesome-looking (swing top) big bottle of yummy, local cider in a very cider-friendly market (Portland). But I feel like they're making too much money on it. Should I raise my prices to "force" them to take a smaller markup? Can I politely ask them to lower the price? Is this amount of markup normal for specialty/micro/local brews? Was I completely mistaken about the supposed average 25-30% markup?
Despite the high price, I am selling enough cases (actually too many, but that's my problem) so I don't think the shelf price is hurting my business. But I just feel kinda betrayed. Your opinions please.
Last edited by revnatscider; 06-06-2012 at 11:51 PM.