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Distribution: Sale or Cost

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  • Distribution: Sale or Cost

    This may be a simple answer, but just wanted some confirmation. For the purposes of sales projections, I'm thinking that when working with a distributor our beer is sold to them, and therefore considered a "sale". Is it possible to consider the 25-30% a "cost" and used as an expense of doing business? What do you think?

    Michael

  • #2
    If the "Sale" is to the distributor, you are selling it to them for a price. Their markup is not an expense that you can claim. Your costs are only things that occur prior to the sale.

    PS- Not an accountant by any means but that's my interpretation
    Last edited by briangaylor; 12-05-2014, 09:58 AM.

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    • #3
      Any costs you incur during storage or transit to the distributor would be distribution costs. As Brian said, you can't write off someone else's markup as your expense.

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      • #4
        Thanks so much for your input. All good points.

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        • #5
          Price of beer to your distributor vs price to a consumer

          This may be stupid- but here goes. we have been self distributing for about a year, got a little micro distributor for parts of the state that we can't reach effectively. When I invoice my distributor, I line item charge him my regular price that I charge other people, and then give him a line item discount of 30%. Is that an okay way to do it? Thanks

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