Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
Should you price bottles lower with lower retailer margins/listing fees, or higher with higher margins/listing fees?
Members consensus is strongly in favour of **higher bottle price with higher retailer margins and listing fees**. **Key reasons cited:** - **Pricing control** — higher prices give you more control over how your product is positioned and discounted in the market - **Higher GP%** — the higher margin protects your gross profit - **Downside protection** — if the product doesn't sell through as fast as forecast, you have more cushion to absorb slower movement without eroding profitability This approach is particularly important for craft spirits where market positioning and perceived value matter.
What margins do luxury department stores like Selfridges and Harrods typically expect from drinks suppliers?
Luxury department stores generally target **40–45% gross profit margins**, though this varies significantly by product category and proposition strength. **Direct experience from members:** - **Selfridges**: Members report margins of 35–40% depending on timing and volume. One member went direct in 2019 at 35%; another estimates their GP at 40%. Buyers may work via distributor relationships (e.g. **Hammonds**, **Diverse Fine Food**) as an alternative to direct. - **Harrods**: One member with direct experience targeted 42% but found **cash flow was the priority**—buyers were willing to drop to mid-20s margins if the product had strong pulling power and high perceived value. **By product type:** - **Wine**: Highly variable, ranging from 20% to over 80% depending on positioning and exclusivity. - **Spirits (whisky, vodka, brandy)**: Generally north of 45%, often above 50%. - **Lower price-point categories** (beer, tonics, soft mixers): Required 45%+ margins, mostly above 50%, to justify shelf space. **Key caveat**: Volume and cash position matter as much as margin percentage. Luxury retailers prioritise products that drive customer footfall; a compelling proposition can negotiate lower margins if it supports their overall strategy.
What wholesale discount structure should craft drinks brands offer to UK retailers and online wholesalers?
Members suggest working backwards from RRP (ex VAT) and assuming the retailer takes a margin, then offering a wholesale discount that leaves them room to trade profitably. **Discount levels:** Members reference several anchor points— - **20% discount** off RRP (ex VAT) as a starting point; one member noted this allows the retailer a 20% margin and is used as an opening negotiating position - **25% discount** mentioned as a possibility for online and offline retailers combined - **30% discount** suggested as a "normal" wholesale level for premium lines **Key dynamics:** - You cannot dictate final retail pricing—only recommend it. Retailers will undercut if it suits their strategy. - Dual-channel partners (wholesalers who also sell direct to consumers on their website) create tension: one member reported their wholesale partner was buying at 20% discount but subsequently undercutting them online, compressing margins as volumes grew. - Larger online retailers (e.g., The Whisky Exchange) may push for steeper discounts (22% margin, or ~30% off RRP) to drive volume, which can trigger complaints from MOM (Members of the trade) if list prices collapse. - Buyer relationships matter: new buyers may be less flexible on pricing and margin protection than predecessors; consider relationship-building alongside negotiation. **Caveat:** Price increases on the back of cost inflation are a separate conversation, and communicating these to consumers and trade partners requires careful handling.
What gross margin should I expect on retail gift packs (bottle with glassware or accompanying items), and is it worth the effort?
Members report **gross margins of 45–50%** on bottle/glassware gift packs when sold through retail. However, the community consensus is cautious: **Margin reality:** - Gross margin is similar or worse than selling a single bottle alone, despite higher retail shelf price (typically £25 RRP for a pack sold at £11–£12 wholesale) - **Cardboard and assembly costs are significant** and erode per-unit margin substantially - Cardboard costs drop sharply with volume, creating a trap: the temptation to over-order in bulk leads to excess stock write-offs if sales underperform **Operational challenges:** - Gift packs are labour-intensive to assemble (in-house or outsourced cost) - Damage in post is common, eating into already-thin margins - Real-world performance is poor: one member ordered 1,000 units for Christmas and sold only ~100, losing money overall **When to do it:** - Members recommend gift packs primarily as a **brand awareness and seasonal tactic** (Christmas peaks), not for margin - **Minis/smaller gift sets are growing**, suggesting better ROI at lower price points - Margin is "really just to try and tap into gifting peaks" **Bottom line:** Margins are adequate on paper but are offset by operational friction, wastage risk, and poor sell-through. Only pursue if strategic value (brand lift, seasonal revenue spikes) justifies the effort.