Ask the Collective

How should wholesalers be charged for delivery, and what's the best approach to implementing price increases to wholesale partners?

Members emphasize two key principles: delivery should always be included in the wholesale price (never charged separately to the wholesaler), and price increases should be implemented annually rather than ad-hoc to avoid larger, more damaging jumps later. **Delivery pricing:** - Always quote a delivered wholesale price—build your average delivery cost into the per-unit pricing rather than invoicing separately - Use minimum order quantities (MOQ) as a lever: if orders fall below a certain threshold (e.g., less than a case or below pallet quantities), you can introduce an additional delivery fee to protect margin - Some regional or friendly wholesalers may even collect from you, but this should never be assumed **Price increase strategy:** - Implement annual increases as standard practice, even if COGS haven't moved significantly. Members stressed this builds the habit with wholesalers, who expect it and typically request pay rises themselves annually - Typical increases range from 3–12% depending on circumstances; members who delayed increases for 5 years faced the risk of needing a large catch-up adjustment later - Provide 3 months' notice before implementation (typically end of September for January implementation) - Use the phrase "Price Movement" rather than "price increase"—it's more palatable - Always provide clear rationale: cover both macro issues (inflation, duty, COGS) and micro issues (brand positioning, retail price barriers) - Consider your brand's market position and the impact on retail shelf price; be aware of psychological price barriers (e.g., £20, £25, £30 for spirits) - Don't over-communicate; treat increases as routine market adjustment, not a major negotiation **Initial wholesale pricing:** When setting up direct-to-hotel or direct wholesale arrangements, build in a "wholesale buffer margin" (estimated at 15% or £5–6 per case) to protect yourself if the wholesaler later needs to source through a distributor. Wholesalers typically expect 50% of retail selling price as gross profit.