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What is average retail markup? - 9/4/2016 11:06:44 AM   
doc2

 

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A store near me has an annual sale where all wine is sold for $1 over cost. I'm wondering what is the average retail markup? This store generally has better prices than other retail outlets, so the discount from her regular price might be less than a similar deal at total wine.

Appreciate any insights.
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RE: What is average retail markup? - 9/4/2016 11:22:37 AM   
ChrisinCowiche

 

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30-40% I think. Distributers take another 20-30% I think. Winery gets 40% sometimes more if they self distribute. Numbers will shift one way or other based on volumes, MSRP, and other factors. We've not sold any wine yet, but these are the assumptions I'm using for the business model. May be somebody ITB for real will correct me on these.

ON a similar note, we were in our grocer/LWS yesterday and saw a favorite wine on the shelf for $35. I avoided putting a few bottles in the cart since we know the winery owners and would rather pay them full price than pay the other middlemen. Nice luxury to have, and mostly why my cellar is so dominant with local (to me) wines. I like supporting wineries directly when their wines and people warrant it.

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RE: What is average retail markup? - 9/4/2016 12:10:30 PM   
Jenise

 

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There are regional variations based on competition and venue, but Chris is right--minimum's about 30%.

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RE: What is average retail markup? - 9/4/2016 12:13:10 PM   
PinotPhile

 

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Chris, the info you shared is most enlightening. If wineries generally end up with about 40%, then I am glad I support key vintners directly. Lately, I have been purchasing more half-cases and cases shipped directly from the wineries.

It also helps to explain why, more frequently now than in the past, wineries are offering me discounts on such purchases when I am considering a purchase. A few have no distributors, a few have limited distribution.

Further, I don't visit a winery tasting room without the intent to purchase. And I do. Period. But that is me.

Cheers!

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RE: What is average retail markup? - 9/4/2016 12:24:48 PM   
GalvezGuy

 

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It depends on the wines as well. Some of the plonk you see on the shelves has a 100% markup (50% margin). The higher end wines generally run 30-40% in most places.

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RE: What is average retail markup? - 9/4/2016 6:51:44 PM   
musedir

 

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At a resturant tonight in Louisville where plonk was 2.5x and decent swill 3+x... Really pissed me off. Drank a Guinness instead.

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RE: What is average retail markup? - 9/4/2016 6:57:01 PM   
mtpisgah

 

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Too much is the correct answer. If the Feds allowed us to avoid the three tier shenanigans, the winery would make more and we would spend less.

And restaurants are a rip off. Two to three times the cost for a bottle, regardless of the cost to them. Does it cost them more to store a $20 bottle vs a $100 bottle? No! Risk plays a small factor but unless you are talking about aged wine and the risk of ruination, it is all a farce.

< Message edited by mtpisgah -- 9/4/2016 6:59:01 PM >


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RE: What is average retail markup? - 9/4/2016 8:55:44 PM   
jmcmchi

 

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so to summarize; 33% of retail to the producer and then 3x retail at the restaurant..I prefer a little place in Aix here he adds 9 Euros to his retail price to make his restaurant price

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RE: What is average retail markup? - 9/4/2016 9:38:44 PM   
dsGris

 

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I do not drink wine in restaurants if I can help it, especially after spending a month in Spain where 15e gets a damn good bottle!

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RE: What is average retail markup? - 9/5/2016 1:53:36 PM   
PinotPhile

 

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quote:

ORIGINAL: dsGris

I do not drink wine in restaurants if I can help it, especially after spending a month in Spain where 15e gets a damn good bottle!

That has been my opinion and practice for years as well. Special occasion in restaurant, maybe a wine off the list. Vastly prefer takeout and my own wine at home.

Learning what % of the money actually goes to wineries, I'd rather contribute directly to them. Buy at fair price by the case, support the winery, enjoy at home. Sure works for me.

Cheers!

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RE: What is average retail markup? - 9/5/2016 3:05:30 PM   
KPB

 

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Less-demanded but good wines are probably marked up something like 30-50% from winery door to the consumer.

For high quality European wines imported to the US, by and large you'll see a markup of nearly 100% compared to what you would pay at the door of the winery. The most famous wines sometimes get into a bit of a tug of war with their importers around this questions: the winery obviously wants more of the end-user price, while the importer wants to mark up by 50% and then everyone in the "feeding chain" wants a further 10%: the importer probably distributes to a state-level wholesaler, who in turn sells the wine to your retail store. So you can see something like (X*1.5)*1.1*1.1, which is already an 80% markup (and this assumes the latter two are content with 10% profits). So sometimes more of the money reaches the winery, sometimes less. The saddest are high-end wines like Pegau da Capo, which are often somewhat reasonably priced at the door of the winery, but might be marked up by 150% or 200% by the time you get a chance to buy them...

< Message edited by KPB -- 9/5/2016 3:06:25 PM >


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RE: What is average retail markup? - 9/5/2016 9:12:14 PM   
champagneinhand

 

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quote:

ORIGINAL: KPB

Less-demanded but good wines are probably marked up something like 30-50% from winery door to the consumer.

For high quality European wines imported to the US, by and large you'll see a markup of nearly 100% compared to what you would pay at the door of the winery. The most famous wines sometimes get into a bit of a tug of war with their importers around this questions: the winery obviously wants more of the end-user price, while the importer wants to mark up by 50% and then everyone in the "feeding chain" wants a further 10%: the importer probably distributes to a state-level wholesaler, who in turn sells the wine to your retail store. So you can see something like (X*1.5)*1.1*1.1, which is already an 80% markup (and this assumes the latter two are content with 10% profits). So sometimes more of the money reaches the winery, sometimes less. The saddest are high-end wines like Pegau da Capo, which are often somewhat reasonably priced at the door of the winery, but might be marked up by 150% or 200% by the time you get a chance to buy them...



Yep and some American specialty shops understand supply and demand way too much and mark up certain bottles hundreds of dollars over what they sell for in Europe, particularly Alsace, though I have seen others that travel from Spain to get a wine in Germany, when Riesling and TBA is involved.

But I don't want to come between a buyer and their grail wine. Some really low priced wines, that may or may not be plonk get slashed by distributors and stores by them for pennies on the dollar. I wouldn't trust provenance but thats me.

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RE: What is average retail markup? - 9/6/2016 3:30:23 AM   
Eddie

 

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quote:

ORIGINAL: musedir

At a resturant tonight in Louisville where plonk was 2.5x and decent swill 3+x... Really pissed me off. Drank a Guinness instead.


I wish I'd know you were in Louisville...I was too.

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RE: What is average retail markup? - 9/6/2016 6:40:49 AM   
SteveG

 

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In Ohio most retailers sell at or near the statutory minimum markup; I assume almost all wholesale transactions are at the minimum, there seems to be enough profit for everyone:

Minimum markup from distributor to retailer: 33%
Minimum markup from retailer to customer: 50%

Thus, effectively the price must at least double from the time a wine enters the state until it can be sold. This may somewhat account for woeful selection, as prices in general are much higher than most other states, and especially so for more expensive bottles. Restaurants are of course generally even worse.



< Message edited by SteveG -- 9/6/2016 6:42:32 AM >

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RE: What is average retail markup? - 9/6/2016 8:27:40 AM   
cp5i6x

 

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out of all of these post.

SteveG is the most correct

min 33% disto -> retail/restaurant
min 50% retail
the resto mark up as you've seen is something more akin to 3-4x wholesale, some are more egregious going 5-6x (your 3-4x retail mark up)

Winery door is the retail price.
so a winery to wholesale 7$ -> is a 10$ bottle wholesale -> 15$ retail . The winery will charge 15$. it makes no sense undercutting your retail branch as a business.

Not sure about france, but portugese wines. A 3 Euro bottle will show up 7$ to the distributor -> 15$ retail.

highly allocated stuff is a different scale completely.

and sometimes when you just need to move inventory the mark ups are what chris in sunny side quotes.

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RE: What is average retail markup? - 9/6/2016 8:29:40 AM   
cp5i6x

 

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i will add, that there are very very few small businesss in the US who will only live on a measley 10% margin, the ones that do are probably out of business or soon will be.

< Message edited by cp5i6x -- 9/6/2016 8:30:46 AM >

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RE: What is average retail markup? - 9/6/2016 9:58:22 AM   
champagneinhand

 

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quote:

ORIGINAL: cp5i6x

i will add, that there are very very few small businesss in the US who will only live on a measley 10% margin, the ones that do are probably out of business or soon will be.



unless they are big box retailers like Costco, one of the world's largest wine buyers.

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RE: What is average retail markup? - 9/6/2016 11:49:59 AM   
cp5i6x

 

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the volume costco does though, will dwarf anything a small distributor, does. The economies of scale matters if we're talking the 10-15% gross margin range. But even costco will mark up their wines ~40-50%.

They do benefit on distributor close outs from big distributors. if you're selling only a few thousand cases a year, it' hurts to give a big discount but if you're doing 1million cases a year, it's okay to move a huge chunk to costco and lower your margin from the 33%.

I've heard stories from producers where a big wine retail shop like wine library will offer something like 10% of retail for their entire production and sel it to consumers @ a good deal price to the consumer.

I can only begin to imagine the leeway that costco gets on pricing.

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RE: What is average retail markup? - 9/6/2016 9:12:31 PM   
jmcmchi

 

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To add to the murk of this question....I found two wines today in the provincial (state) liquor store in BC, where excise tax markup is 125%, that are cheaper than the quoted retail price in the US where excise taxes are ?....

One 2008 Washington - where you could argue that FX movements since 2010 account for the relative value in CAD - but one current release Aussie riesling which has no relative benefit from FX movements

My general impression is that mark-ups within one country are not the whole story of the end retail price, and it is possible to find relative bargains by looking at comparison prices the way I used to compare auto prices in different countries


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RE: What is average retail markup? - 9/6/2016 10:52:30 PM   
PinotPhile

 

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quote:

ORIGINAL: champagneinhand


quote:

ORIGINAL: KPB

Less-demanded but good wines are probably marked up something like 30-50% from winery door to the consumer.

For high quality European wines imported to the US, by and large you'll see a markup of nearly 100% compared to what you would pay at the door of the winery. The most famous wines sometimes get into a bit of a tug of war with their importers around this questions: the winery obviously wants more of the end-user price, while the importer wants to mark up by 50% and then everyone in the "feeding chain" wants a further 10%: the importer probably distributes to a state-level wholesaler, who in turn sells the wine to your retail store. So you can see something like (X*1.5)*1.1*1.1, which is already an 80% markup (and this assumes the latter two are content with 10% profits). So sometimes more of the money reaches the winery, sometimes less. The saddest are high-end wines like Pegau da Capo, which are often somewhat reasonably priced at the door of the winery, but might be marked up by 150% or 200% by the time you get a chance to buy them...



Yep and some American specialty shops understand supply and demand way too much and mark up certain bottles hundreds of dollars over what they sell for in Europe, particularly Alsace, though I have seen others that travel from Spain to get a wine in Germany, when Riesling and TBA is involved.

But I don't want to come between a buyer and their grail wine. Some really low priced wines, that may or may not be plonk get slashed by distributors and stores by them for pennies on the dollar. I wouldn't trust provenance but thats me.

Thanks to both of you for validating my hesitancy about many European imports. Seriously. Exploring some regions at entry levels makes sense, but paying big markups for the "upper-crust", "top-tier", or even near top tier, does not to me.

I would rather support known quantities, where I perceive reasonable pricing and the wine is truly, to me, worth what I pay for it. What a given wine is worth, especially to a geek, is so very personal. But a fun journey it is.

Cheers!


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RE: What is average retail markup? - 9/7/2016 9:34:57 AM   
mc2 wines

 

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quote:

ORIGINAL: jmcmchi

To add to the murk of this question....I found two wines today in the provincial (state) liquor store in BC, where excise tax markup is 125%, that are cheaper than the quoted retail price in the US where excise taxes are ?....

One 2008 Washington - where you could argue that FX movements since 2010 account for the relative value in CAD - but one current release Aussie riesling which has no relative benefit from FX movements



Canada having just the single seller of alcohol can sometimes negotiate very good rates as I understand it. At times they will end up being a non negligible portion of a winery's production.

I have seen some of the smaller production good European wines marked up higher in the US than in other countries (thinking some of the Rhones), but not sure that translates across. Friend of ours owns a wine shop and he said generally his mark-ups on the top end wines are pretty narrow. The money is made on the every day stuff.



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RE: What is average retail markup? - 9/29/2016 1:28:53 PM   
lockestep

 

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When I was managing wine retail shops back in the 1980's discount retailers marked 20-25% on standard wines. Low priced wines were a different story, we would look for wholesaler closeouts of drinkable plonk and make much larger markups on the 3 for $10 bin.
"Standard" shops would mark in the 30%+ range.
Today I would guess the marks are only slightly higher in this part of the world. My local runs a 20% off sale in February and gets calls from wineries wondering why he is selling near cost.

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