o you have all your licenses in order, label approval was a breeze, and your still is running like a dream. Now the really
hard part: getting your product on shelves. Where do you even begin? There is a lot you need to take in so as to learn about the world of craft spirits retail. I live and work in New York State, where wine and spirits cannot be sold in grocery stores, so we have privately owned liquor stores. My experience comes from this type of highly specialized retail environment. Your state may be different but the principals remain the same.
PRICING the BEST for the BENEFIT of ALL The first thing you need to examine in your strategy is pricing. The cost of your products will make or break your entire business model. It is common practice for spirits to be sold by the case with discounts at varying quantities. These varying quantities are called levels. For example: the wholesale cost of a one bottle purchase is $30, if one case (12 bottles) is purchased the cost per bottle drops to $29, two cases (24 bottles) $27.50/bottle, etc. Keep quantity discounts low. You are a craft distillery, not a big global brand; nobody wants to buy five cases to get the best price on a new product. Single case buys and combo-packs are the perfect way to get your products into a store for the first time. Another reason for lower levels for the deepest discount is that high levels will cause a pricing slide. You don’t only want the larger stores selling your product, you want all stores to have an equal shot. I’ve seen it a thousand times: there are customers that will spend $5 in gas to save $1 on a bottle. Small/medium stores are your best friends; don’t price them out of the game. Keep in mind that stores will mark-up spirits roughly 20%, so if
written by GEORGE CATALLO
you have a price you want your product to ideally retail for, price accordingly on your deepest level. Another item to consider when developing a price point of your products, is to be cautious when pricing your products even in your own tasting room. Setting prices too low onsite does not necessarily give you the advantage of cutting out the “middle man.” While customers may be more likely to buy from you directly, you may be damaging your relationship with retailers
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