How much does the beer really cost the retailers? I see a 6pack of Sam Adams on sale in WY fo $4.99!

You have to take into account that the distributors in other areas may not be charging the same prices. On top of that, state taxes, local taxes and other pricing rules may be in play.

 

I just seen 12 packs of Shiner Wild Hare for $4.99 on closeout. A lot of times already expired beers will be marked down which is probably what you saw

 

Around here retailers typically mark the beer up about 20% from what they paid.

 

Just as you pay the price the retailer sets, so too must the retailer pay the price the distributor sets.

Also, comparing the cost of goods in two places as disparate as NY and WY seems a bit ridiculous.

 

The distributor was likely closing it out, and sold it to them for cheap to get it out of the warehouse.

Or for whatever reason, they are selling it for a loss.

 

As a fellow New Yorker I feel your pain. The answer to your question is the same reason that it costs $10 for a salad and a bottle of water in Mahattan or why we pay $450k for a 3 bedroom 2 bath house when that would get you something twice the size in other parts of the country: Cost of Living. Not only are we subject to it, but the retailers and small business owners that operate here are subject to it as well. What they charge for that 6pk has to cover all associated costs, which includes a rent/mortgage that is most likely significantly more than what that store in WY is paying.

Also, to answer your other question, I have been told by 3 separate store owners that their markup is somewhere between 30%-35% give or take.

 

Generally speaking, most retailers mark up the beer by 15-30%, depending on the product and their other costs of doing business. As for your specific example, there's a few factors at play:

• Rent/labor/other expenses are probably significantly higher in Westchester County than they are in Cheyenne, WY.
• Those sale prices are part of a grand opening promotion. It's very likely that they're selling that Sam Adams at a loss in order to get people in the store where they'll purchase liquor and wine with high margins.
• Wyoming may be one of those states that allows volume discounts. If this place is buying an entire pallet of SA beer they may very well get enough of a price break that $4.99/6pk isn't losing them money.
• Retailers look for any advantage they can find to draw you into their store and away from their competitors. If it was possible to sell 6pks of SA in New York for $4.99 at least one of your local retailers would do it. The fact that they are all within a very close range of prices indicates that none of them can afford to go any lower and remain profitable.

They only thing I can say for certain is that all of the specials on that page ($4.99 Sam Adams 6pks, $12.49 Oskar Blues 12pks, $9.99 Deschutes 12pks) are all somewhere between 20-30% below the wholesale cost I pay. they're either getting a hell of a volume discount, or they're intentionally losing money to draw people in for their grand opening.

 

It's not just what they're paying for the beer. There are a lot of other factors affecting the price they charge to cover their costs and keep their business turning a profit so that they can keep the doors open for you to buy tasty beer from them.

Prevailing wages may be lower in WY versus NY. Property rent or leasing may be cheaper in WY. Business taxes may be higher in NY. Ditto utilities. There are all kinds of expenses that might cause your local retailer to have a higher price point on the beer they sell.

 

I asked the guy who I go to his shop about the Stone Double Bastard in Bourbon which were selling for $30 a pop. I said tell me dude on these what did you pay. He says, "$17" So $13 bucks in profit on each bottle. Not bad. But not the norm either.

Cheers!

 

Take a look at houses or apartment rent in other parts of the country and youll be even more pissed I would assume. Different parts of the country have different costs of living - taxes, land, building, electric, water, minimum wage, etc. You cant run a business in NY (especially the metro area) the same as you can in WY plain and simple. Different mark ups are necessary given many different factors. In general, the people living in WY will make significantly less than those in NY which is due to wages matching the cost of living. As an example, I know people at my same company in Pittsburgh make about 25% less than I do for the same position and responsibilities, however their rent is roughly 2/3 of what I pay and they get a larger living space.

Edit: To tie my point in, different mark ups will be necessary to keep a business open due to many other factors than the cost of the product.

 

Glad you didn't pay $15.45 for a sixer of Boston Lager like I did this week....pricing in Atlantic Canada blows.

 

I'm in the making 20%ish world (Westchester) and honestly if I could sell a 6 pack at 4.99$ and not be losing 3$ a 6 pack that way, I would completely do it.
I can't even fathom the kind of volume discount they're getting/the normal price for them. If I order a 25 case deal I only get 2$ off the case.. which would still cost me almost 2$ loss if I was priced at 4.99$.

 

You also have to remember you're looking at on a per beer basis. The stores are setting prices to reach an overall profit margin for the store as a whole. So the markup and profit of one beer based on it's sales can offset another which they can markup less or even discount if they're trying to liquidate a certain item that is old or not selling as well.

 

I have an old invoice around here somewhere...Hmm. I work at a SWPA grocery chain.

I know we buy in Sierra Nevada at $27 a case, then sell it at something like $10.50 per six pack.
Elilot Ness is bought in for $25 and I think is also sold for $10.50.

That's all I really remember off of the top of my head. :/