The Numbers Don’t Lie
In the brewing industry, margins are under attack. No longer is growing revenue and volume enough to succeed. There’s a new game: increasing profitability and maximising margin.
As written about by Luca Lorenzoni (ex-CEO at Northern Monk and ex-MD at Camden Town Brewery) in his popular series on The Future of Craft Beer, it’s really important to analyse your margin pool and ensure that your pricing strategy is right across your various routes to market.
Recently, with the introduction of Sellar’s Best Price Promise we’ve helped some of our partners to understand how their pricing on 3rd party routes to market such as Eebria could negatively impact their ability to grow direct trade sales.
Sellar exists to put breweries back in control. Where you can sell direct to anyone, keep all of your margin, all while reducing the admin that typically comes with direct sales. Not to mention building real relationships with your customers that nurture brand loyalty and repeat business.
What trade buyers tell us is that they want to support their suppliers. They seek to buy from channels they know work out best for their suppliers. However, with their margins under attack too, it needs to make economic sense.
With more information than ever at our fingertips, just like consumers, businesses are now also shopping around. The Best Price Promise gives trade buyers confidence that whenever they order directly from you on Sellar, they will get the best price available for that product on the market.
“What do we mean by best price?
We mean the ‘delivered at’ price of any product available should be at least the same as is available to trade buyers elsewhere. We are not saying the price needs to be better, only the same so that the buyer is not disadvantaged when ordering directly from you. This is limited to channels where you, as the supplier, are in control of the price. ”
This means to prevent disincentivizing your customers to support you by opting to buy from you directly, breweries must ensure they do not offer a better price for their products through 3rd party channels. Particularly where those 3rd parties take hefty commissions and prevent you from building relationships with your customers.
We put together this Google Sheet to take you through a real-life pricing comparison example between Eebria and Sellar where you can clearly see the breakdown of the numbers and the impact it has on your bottom line.
Feel free to make a copy of this sheet (File > Make Copy) so you can use this with your own numbers.
If you’d like to run through your numbers with a member of our team, please don’t hesitate to reach out to us on hello@sellar.io