RRP = Wholesale Price + ?

rediguana

Hi everyone.

I'm not a business but I recently acquired E**** worth (at wholesale prices) of a luxury FMCG. I want to sell it. I want to price below what it cost in the shops, but more than the wholesale value.

So how do shops price? Do they double the wholesale price or what? Or add 50% again? ?

I'm sure it varies wildly across product categories, so I'll cut to the chase and say that it's fine wine I'm dealing in (so I'm guessing the mark-up can be quite steep).

Any tips appreciated.

Thanks.

antoinolachtnai

I am taking it you have receipts for the payment of the duty on this wine.

You don't base the sale price on the purchase price. You base it on what other people are charging and what the market can bear. It also depends on how you are positioning the product.

frobisher

You need a license as well of course. And unless its a particular wine worth having restaraunts usually don't go for individual buys off randomers. Although I wouldn't let that get in your way to be honest.

drdre

Who do you aim to sell it to? Do you have constant supply as if you donot then restaurants wont purchase from you.Restaurants want constant supply and want wholesale prices.

rediguana

Thanks for the replies.

1. I know the "Cost-Plus" method of pricing is frowned upon in current economics, and that it's all about "what the market can bear". However, I'm trying to offload a one-off prize and I won't be conducting extensive market research to arrive at the market's ideal price. The wholesale price must lie some way south of what consumers would ordinarily pay for it, I just want to add a little to it, so that I get a reasonable price and the buyer pays a couple of hundred quid less than what he or she would have to in the shops.

2. I wouldn't be selling to a restaurant / shop. Their supply channels are already well established and they would probably try to beat me down to significantly LESS than wholesale prices, if they were interested at all. No, this is a private sale (I'm not a business) to another private individual.

3. As for duty receipts? Is duty not paid by the importer?

4. License? I'm not moving into the drinks business, I'm just trying to arrange a one-off private sale, where both the buyer and the seller can benefit from a good price. I didn't BUY the product at wholesale prices just to profit, I won it, but I'm aware of the wholesale price. This doesn't seem to me to be a situation where getting a license is appropriate.

antoinolachtnai

You just had better be sure the duty is paid. The duty is supposed to be paid for by the importer. However, the fact that the wine isn't in a bonded warehouse (or is it) makes me wonder. Up to you though. Same goes with the licencing. You are retailing wine here. Might be different if you were selling it to another supplier.

Why don't you find out what this wine costs in the local off-licence, and charge 25 percent less than that?

rediguana

antoinolachtnai wrote:

You just had better be sure the duty is paid. The duty is supposed to be paid for by the importer. However, the fact that the wine isn't in a bonded warehouse (or is it) makes me wonder. Up to you though. Same goes with the licencing. You are retailing wine here. Might be different if you were selling it to another supplier.

Why don't you find out what this wine costs in the local off-licence, and charge 25 percent less than that?

Cheers. That's more-or-less what I plan on doing, checking out what it (or something similar) costs locally, and then subtracting something from it.

On the topic of licensing / duty (which I admit I know nothing about!), what about all those Ebay transactions? Isn't everyone on that site just selling, end of story?

antoinolachtnai

'or something similar' won't cut it. If the wine isn't from a well-known, identifiable maker, or you don't have a shop or another sales/marketing strategy such as endorsement, I would think that the wine is worth very little.

I don't see much wine for sale on ebay.

rediguana

antoinolachtnai wrote:

'or something similar' won't cut it. If the wine isn't from a well-known, identifiable maker, or you don't have a shop or another sales/marketing strategy such as endorsement, I would think that the wine is worth very little.

I don't see much wine for sale on ebay.

Regarding the ebay thing, I wasn't referring just to wine, but things generally. And I thought everything could be found on ebay? I was just wondering, genuinely, do those sellers not need licenses to sell their various products?


I disagree that I can't use similar wines to aid my pricing decision. They WOULD need to be pretty similar, admittedly, but I have a good working knowledge of wines. At wholesale value, I can use up the entire four-figure value on just one case (ie. twelve bottles) if I so choose, as I have a brochure. So quality certainly isn't an issue and, with all due respect (and I do appreciate your input), you don't have nearly enough information to state that the wine is worth very little.

eamon234

Depending on where it comes from the margin on most wines is over 50%

rediguana

eamon234 wrote:

Depending on where it comes from the margin on most wines is over 50%

Now we're getting somewhere! Cheers.

antoinolachtnai

Making money in wine in Ireland is all about marketing and sales. If you can make your sales pitch to your network of content, or have some marketing advantage for it, then you can charge a premium for it, for sure.

That's essentially how money is made in the business from what i can see.

I'm not much of a wine buff, but from what I can see, the Irish wine market is not that sophisticated about recognising quality and value.

You need a licence to sell alcohol to the public in Ireland. Sale of alcohol is controlled by the Intoxicating Liquor acts.

I hope you will take this the right way, and I don't know you, but you really need to know about how the whole duty, licencing and bonding system works.

rediguana

antoinolachtnai wrote:

Making money in wine in Ireland is all about marketing and sales. If you can make your sales pitch to your network of content, or have some marketing advantage for it, then you can charge a premium for it, for sure.

That's essentially how money is made in the business from what i can see.

I'm not much of a wine buff, but from what I can see, the Irish wine market is not that sophisticated about recognising quality and value.

You need a licence to sell alcohol to the public in Ireland. Sale of alcohol is controlled by the Intoxicating Liquor acts.

I hope you will take this the right way, and I don't know you, but you really need to know about how the whole duty, licencing and bonding system works.

I'm not trying to sell at a premium, I'm selling at a DISCOUNT. This is my main promotional tool, such as it is! More than wholesale but less than retail.

Whether or not the Irish wine market is sophisticated is debatable, but ultimately irrelevant for my purposes. I just need ONE customer. That customer, will be getting a good deal. I've advertisements circulating through informal networks. I just needed some guidance on pricing.

The Licensing / Intoxicating Liquor Act seems more relevant for someone who is involved in the drinks trade on an ongoing basis. I'm essentially trying to offload a prize.

antoinolachtnai

There is the well-known story of Joe Duffy selling beer in the JCR in Trinity. When the cops came to close them down he protested that the Intoxicating Liquor Acts didn't apply to the student's union because he was merely renting glasses.

There is little room for interpretation as regards the alcohol laws. You probably won't get caught, but that doesn't mean it's not illegal.

Anything more than EUR 4.50 for a bottle of wine or EUR 6 for sparkling is a premium in my book. I'm not saying the wine isn't worth more or didn't cost more to produce and import; just that anything more than that needs to be justified in terms of brand or story or whatever in order to receive the premium it deserves.

It sounds like a lot of wine for one retail customer to take off you, but I am sure you are right, that you will find someone who can use it.

rediguana

What a shame they didn't arrest Joe Duffy anyway.

On that note, let me just say thanks to everyone who contributed. Since starting the thread, I've sold about one-quarter of the wine and I've decided to keep a quarter for myself. That leaves half that's still seeking a home.

Anyone interested in discounted cases of Ribera Del Duero, Bordeaux, Burgundy, Australian Shiraz, Rioja, Champagne (etc), please PM me and I'll respond tomorrow evening.

Grazie

antoinolachtnai

I think they did arrest him. The gardai certainly did not accept this line of argument. They didn't keep him for long though.

How did you set your price in the end?

rediguana

antoinolachtnai wrote:

I think they did arrest him. The gardai certainly did not accept this line of argument. They didn't keep him for long though.

How did you set your price in the end?

So much for all my debate. In the end, I let friends and family leaf through the brochure and just pay me the list price. It was too hard to dupe them, and the prices staring them in the face. It's all profit, though, innit? Seeing as it was a prize and all

Again, I've a couple of cases left if anyone wants to PM me for details.