How do I find out the markup rates

martinn12005

Free Member
Sep 18, 2009
51
0
Hi,

I'm starting a new business in which I intend to produce, distribute and sell beer. Before I commence, I need to find out the markup rates between the manufacturer and the wholesaler.

I can't think of a way of doing this, can anyone guide me?

Feedback appreciated..
 
I don't think there will be a single magic value, since different producers will have vastly different costs, volume capacity and target profit margin.

The critical point will be the margin between wholesaler and retailer. The wholesaler will probably be working to a general margin, your task is to be able to supply them with a product which allows them to sucessfully sell that product at a given price, and make that margin.

Your wholesaler is not fussed if your markup is 5, 50 or 90%, as long as they can sell your product and make their own margin.

There are a lot of academic and more down to earth resources on pricing on the web.

Try a few searches along the line of > pricing strategy markup

Whatever strategy you go with, having an accurate unit cost is the basis for everything else.

Many busineses would focus on basic ingreedients and packing, but forget distribution, energy, rent, cleaning and all the other odds and ends of overheads and capital depreciation which make up your basic unit cost.

Not having an accurate unit costs leads to some companies selling items at below actual cost of production, and it's only when the money runs out that they realise what they have done.

Good luck with planning your new venture. I'm available to sample and test your product if you need me, years of experience!
 
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I would have thought that all micro brewery's would sell direct to the local area and not produce enough to use middlemen.

That way they also have maximum profit per barrel
 
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