Costco of Beer

Discussion in 'Pacific' started by itshanney, Jan 21, 2013.

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  1. itshanney

    itshanney Initiate (0) Aug 30, 2012 Washington

    Beer fans in Seattle/Portland, is the market large enough to support a "Costco of Beer" store?

    By that I mean a slight spin on the bottle shop. Rather than having hundreds or thousands of bottles, there are very few SKUs in stock. Product is sold in volume near wholesale prices rather than in small lots at retail prices. Focus is mainly given to kegged, beer, rather than bottled beer. Deals are made with breweries outside of the state of have pallets of kegs shipped. You get the idea...
     
  2. Mages64

    Mages64 Initiate (0) Sep 7, 2009 Washington

    Not to be sarcastic but isn't that just called a "distributor"? What particular benefit or service/need are you trying to fulfill?
     
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  3. itshanney

    itshanney Initiate (0) Aug 30, 2012 Washington

    Distributors don't sell to the general public (usually). They only sell to other wholesalers or retailers or other members who have liquor licenses.

    My point is there's a price point between acquisition cost and retail cost for beer. Costco, Sam's Club, etc. are the most common examples of retail stores that sell at only 10-15% above their acquisition cost. From the consumer perspective it might look like a distributor because the store would probably be a warehouse with no frills. But the main goal is the consumer is the end user, not other wholesalers or retailers.
     
  4. Orca

    Orca Grand Pooh-Bah (4,710) Sep 18, 2010 Washington
    Pooh-Bah Trader

    So I can go to the distributor's warehouse and buy beer directly from them? I'm afraid I've been doing this wrong.
     
  5. jgrgas

    jgrgas Initiate (0) Feb 10, 2006 Oregon

    Portlanders tend to prefer staying in there neighborhood even if that means spending slightly more. This mentality, coupled with the existing post-off details that the local grocers almost always have (i.e. Deschutes 6pcks for $6.99 at Safeway) would probably make it tough for a direct-to-consumer wholesaler like you're proposing to get by. The current margin on off-premise packaged beer is already razor-thin and difficult to profit on. I don't think this type of place would get the foot traffic to support selling at near cost.
     
  6. Mages64

    Mages64 Initiate (0) Sep 7, 2009 Washington

    As Irony would have it... Actually yes! At least in Portland. You can go to point blank distributing without a retail license and buy for your own consumption! They charge a wholesale price but you can only buy by the case. Kegs too. This helps idiots like me who wanted a whole case of 3F golden blend for cheap(er) and doesjel. It also helps small bars or people with kegerators to get kegs only when they need them especially if they can't hit the normal minimum order for a delivery.

    Now in WA, you need a resellers permit. However if you just ask a friend to lend you a copy of their resellers permit, I bet you could buy directly from a distributor.
     
  7. Orca

    Orca Grand Pooh-Bah (4,710) Sep 18, 2010 Washington
    Pooh-Bah Trader

    Then I stand corrected, though in Washington it sounds like this would be more difficult. There are certainly a handful of beers I'd love to buy by the case @ wholesale prices. I don't think Costco carries any of them.
     
  8. tozerm

    tozerm Initiate (0) Jul 1, 2005 Washington

    It is a well known fact that Costco generates most of it's annual revenues from the $55 membership fees. Read their annual reports... take the # of memberships they sell, multiply by $55 and you come darn close to the net profit per year. Membership dues are the ONLY reason prices are where they are at Costco or Sam's club.
     
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  9. podunkparte

    podunkparte Initiate (0) Nov 14, 2009 Washington

    I just don't think there is the demand for consumer kegs that could pay for the overhead itself.
     
  10. harrymel

    harrymel Initiate (0) Dec 15, 2010 Washington

    Seems weird that every year they send me a check for greater than the amount I paid for my membership (which is greater than $55). I would guess I'm not the only one receiving this check, so I am not convinced your statement is particularly correct. Nonetheless, your observation of the correlation is pretty interesting.

    To the OP: I don't think the set up would be out of the question, but it would suck to have a single establishment potentially getting progressively larger allocations of limited beers.
     
  11. Mages64

    Mages64 Initiate (0) Sep 7, 2009 Washington

    total wine has a 7% average margin... is this close to what you are talking about?
     
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  12. tozerm

    tozerm Initiate (0) Jul 1, 2005 Washington

    Not that many people get the checks back. Of course there is some amount of profit margin in the items they sell, but without the membership fees the pricing structure at Costco would be very very different.

    Any beer store wanting to be the Costco of beer, would need to be structured similarly in order to even come close to the pricing model at costco.
     
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