The average markup in a liquor store can vary depending on several factors, including the type of spirit, the location of the store, and the competition in the area. However, a general rule of thumb is that both the distributor and the liquor store will mark up the spirits by around 25 to 30% each.
Let's break it down step by step. When a distributor purchases spirits from the producer or manufacturer, they typically pay a wholesale price. This price is usually lower than the retail price you see on the shelves. The distributor then adds their markup, which is usually around 25 to 30% of the wholesale cost.
After the distributor has added their markup, the spirits are sold to the liquor store. The liquor store, in turn, adds their own markup to cover their operating expenses and make a profit. This markup is also around 25 to 30% of the price they paid to the distributor.
So essentially, the liquor store is marking up the spirits twice – once by the distributor and once by themselves. This is why you often see higher prices for spirits at a liquor store compared to what the distributor paid.
It's important to note that these markups are not set in stone and can vary. Some distributors may have different markup percentages, especially for certain products or brands. Similarly, some liquor stores may choose to mark up certain spirits more or less depending on their own business strategies and market conditions.
Additionally, there may be other costs involved in selling spirits that are not directly related to the markup. For example, the liquor store may have to pay for shipping or storage fees, which can also impact the final retail price.
In my personal experience as a sommelier and brewer, I have seen a wide range of markup percentages in different liquor stores. Some smaller independent stores may have slightly higher markups to cover their operating expenses, while larger chain stores may have lower markups due to their ability to negotiate better deals with distributors.
It's also worth mentioning that the markup on spirits can be higher than that of other alcoholic beverages like wine or beer. This is because spirits often have higher production costs and are subject to higher taxes and regulations.
The average markup on spirits at a liquor store is typically around 25 to 30% from the distributor's wholesale cost, and then an additional 25 to 30% by the liquor store itself. However, it's important to keep in mind that these percentages can vary and are not set in stone.