Agreed. I've had to push back against the request from upstairs to increase the margins for my best sellers, and advocate for my customers' wallets vs just maximizing profit. I think for someone who thinks in terms of profit, it's easy to see why bumping up the price of a best-selling brewery like Alchemist makes sense, but it's really doing a disservice to the customer, and I think it dissuades them from being or becoming repeat customers. Edit** Oh also, my apologies. I was talking about margin vs markup. a 35% margin on a 13 dollar beer comes out to 20 dollars for the sale price (13/0.65).
Thanks much for sharing the examples and giving some insight. I'm not sure my bigger local retailers are going to share their cost from the distro (a couple smaller ones might). Your area is surely more pricey than mine. It does seem – to my brain, anyway – that there's a little more margin added. For the two beers available to me, I calculate a 35% markup on the SNPA @ $12.77 and the Aventinus @ $17.20. Those margins are well above 50%. Does management factor some additional fixed costs into the margin? EDIT: I see your latest edit. My consumer brain needs clarity on the difference in markup/margin.
So, our store differentiates between markup vs margin. So a 13 dollar beer with a markup of 35% comes out to 17.55 (35% of 13 is 4.55 + 13 is 17.55), and a 13 dollar beer with a margin of 35% comes out to 20 dollars (13/0.65 is 20).
Mark up is typically used when the cost of items doesn't change much or at all, that way you can just add 35% (as an example) to the cost of an item and get to the sale price that way. If the beer *always* comes in at 13 dollars, this is an easy way to go. For inventory where cost changes are super frequent, but you want a consistent sale price for the customer, like say at a grocery store, you would use margin, which is the sales price you want to hit minus the cost of the product. So, in this case the price would be set (20 dollar sale price for a 13 dollar cost beer), and the margin % fluctuates from the original 35% depending on if that beer comes in at 12 dollars next time, or 14 dollars. I don't know if that makes it any easier to understand lol
Indeed, it makes it easer to understand what the end seller is basing its decision on, especially with regard to inventory. As Joe Consumer who's feeling the pinch, I view it as the end seller inflating its markup by hedging that prices are destined to go (way) up for it. I recognize I'm looking at things simplistically: i.e., how much more am I paying for the product compared with what the seller paid. Welcome to the "real world," right? I'm also probably more piqued than usual after my trip to the grocery store this past weekend; even had a conversation with the store manager, whom I've gotten to know pretty well. What's clear is you're a good individual who works with your customers to help offset some of the sting when you can. And thanks for taking the time to spell it out.
I mean, it's rough out there, across the board. I'm often bringing beers back that we haven't carried in a couple years and the vendor/distributor cost increase is shocking even over such a relatively short time. But yeah, it definitely stings when I see that we're only paying, say, 10 bucks for a 4-pack at the door, but when I want to buy it off my own shelf after, I'm paying 5.49 extra (because we also round up/down prices for uniformity). It's a complex set of systems that often feel slightly unbalanced. Maybe it's the price to pay to get easy access to all these amazing beers? It's getting increasingly more difficult to be okay paying that price as a customer.
I forgot to add, when I saluted you for helping your clientele whenever possible, that you also deserve five up top for making the effort to keep the beer wall stocked with products that stand out for one reason or another. I was reflecting after my conversation last weekend with the grocer, what's it gonna look like when I'm in my beer stores in a couple weeks? I've got plenty in the fridge now, but I've been hearing prices on the imports are starting to climb (further), and the German section is always my first stop. Last summer my grocer had a sweet early-season deal on SN Summerfest, so I'll have my eyes peeled for that. One of my favorite lawnmower beers.
When taprooms hit $8 for a pint of their main IPA, that is probably a 3.5-star rating; I'm out. Down the street is better beer for $6 - $7 a pint, with Monday special of Take-home purchases: I like that some are going to 16 oz cans. My go-to is SN Torpedo, a case of 16s (18 cans) for $26.96 at the grocery. A 12-pack of 12 oz Torpedo is $19. (I do math)
Was at a restaurant in Allentown last week, first time there. Heard good things about the food, and it was excellent, pricey, but excellent. I noticed on the menu that the only items not priced were the craft drafts. Not drinking at the moment, so asked the server for the price of the Ever Grain Joose Juicy. "I think that's a $10 beer". One of the few times I was glad I was off the beer. She may have been wrong I guess. Or maybe it was a 22oz pour,
I do appreciate my local brewers who try to keep their prices low. Alchemist is still charging $13 for a 4 pack of Heady at the brewery. Locally it’s more, but not outrageous and very available at all the local groceries and supermarkets. Here’s a picture from Shaw’s last week
