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  • Start-up distribution pricing help

    I am a brewery in planning and I am specifically looking for some help reviewing my figures on my direct costs for production of my revenue streams and if the margins are accurate for the Wholesaler and Retailer. I live in Pennsylvania where it is legal to self distribute which is why there is a breakdown of both methods of self distribution and the typical three tier distribution system.

    Thanks,

    Jeff

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  • #2
    Be careful. This could be construed as price-fixing or collusion.
    --Dean Brundage
    Owner / Unscrambler of Eggs
    Blake's Steaks Sandwich Shop
    (650) 823-3389

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    • #3
      Originally posted by brundage View Post
      Be careful. This could be construed as price-fixing or collusion.
      Dean,

      Thanks for the heads up but could you explain please. I did some research by asking around to some retailers I know and put together the assumption of the 25% margin for the retailer. I couldn't get much info on the Distributor end other than their margins range around 30% so I assumed worse case and said 33%. I am able to accurately estimate my cost of production of the beer but it gets a little gray when I have to include the cost of cleaning/prepping/packaging the kegs and bottles. I was trying to ask if my direct costs and margins were in the ballpark of accuracy knowing that they will differ from each distributor and retailer and can be negotiated.

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      • #4
        Yes your percentages are in ballpark. Some retailers get less margin and some distributors get bigger margin.

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        • #5
          Originally posted by jcheavener View Post
          I am a brewery in planning and I am specifically looking for some help reviewing my figures on my direct costs for production of my revenue streams and if the margins are accurate for the Wholesaler and Retailer. I live in Pennsylvania where it is legal to self distribute which is why there is a breakdown of both methods of self distribution and the typical three tier distribution system.

          Thanks,

          Jeff

          [ATTACH]16973[/ATTACH]
          When you say "brewer profit," I assume you mean gross profit. You will not net that much on your beer after overhead and expenses.

          Cheers,
          sam

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          • #6
            I'm having the same issues in my own business plan. Your gross margin on pint sales is higher than mine, but that's definitely possible depending upon the labor you're involving I imagine. I hadn't considered the margins for the distributor and the actual retailer though!

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