Pricing your wine or spirits for the distribution market has become increasingly complex and challenging. Previously, costs and margins were standardized and predictable, but today is a different story.
Over the past three years, extended shipping lead times and delays have significantly impacted costs and market efficiencies. Additionally, rising costs of grapes, dry goods, labor, warehousing, and transportation have added to the challenges of pricing wine and spirits.
Here are five points to consider when pricing your wine or spirits.
- It’s more acceptable now than at any time in the past decade to implement a small strategic price increase on your wine or spirits to cover your costs and margin requirements. Without understanding costs and changing margin requirements, pricing your products effectively becomes impossible.
- Price your wine or spirits so you have funds to invest in your brand alongside your distributor’s. As noted in a previous article, selling in the wine and spirits distribution market incurs various costs. Read more about this topic and the other hidden costs associated with wine and spirits distribution by clicking here.
- Ensure that the price of your wine on your winery’s website doesn’t undercut the price US retailers charge for your product.
- Expect and anticipate that wine and spirits distributors and retailers require larger margins than they did pre-pandemic. Knowing this specific information before engaging with them is crucial to determining their interest in representing your wine or spirits brand.
- Be cautious about to which online retailers you sell your wines. A low price on the internet can undermine all the hard work you have done to create successful relationships with distributors and retailers.
Palmateer Consulting specializes in helping wine and spirits industry clients navigate these challenges to offer competitive prices that maximize your return on investment.
Read further in our blog article on pricing your wine for the wine distribution market by clicking here.
