Bottle Shop Profit Margin: Beer, Wine, Cider and Tastings

A bottle shop's beer keeps a thin margin: a local IPA 4-pack costs $11.60 from the distributor with the card fee and sells for $15.99, a 27.5% margin. Wine keeps more, 37.5%; cider sits between; cheese keeps more still; and tastings, a few pours and crackers for a fee, keep the most. Distributors set most prices, so the shop's margin comes from its mix: what it chooses to carry and what it adds beside the beer. Margin = (price − cost) ÷ price. In the example below, a month of five lines brings $37,778 of sales and about $13,010 of gross profit, before rent, wages and the coolers' power.

The short version

• Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
• A craft beer 4-pack: $11.60, sold for $15.99, 27.5%.
• Wine keeps more than beer.
• Cheese and tastings keep the most.
• The shop's margin comes from its mix.
• TaroStack keeps every bottle counted, with dates on fresh beer. More below.

A 4-pack, costed

Two Ravens Bottle Shop, the made-up bottle shop in Asheville, North Carolina, I use in these examples, counts wages as a fixed cost in its plan, so the costs below are what each item uses:

The shop's year is in bottle shop business plan, and a wine-only shop in wine shop business plan.

Margins by channel

The cheese keeps 46.3%; the tasting keeps 70.8%.

A month's numbers

A month for Two Ravens Bottle Shop:

Wine brings the most gross profit on fewer sales than beer. The tastings sell 120 seats a month and keep the most of anything, and bring people who buy a 4-pack on the way out. Rent, wages and the coolers come out of the gross profit; a liquor store's numbers are in liquor store business plan.

Get the calculator

Download the bottle shop margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

The calculator holds one cost per item. Distributor prices change by the quarter, IPAs pass their best and go to a discount shelf, and the mix shifts with the season.

How TaroStack does it

TaroStack costs each 4-pack from what each batch used, so margins sit on real cost.

True cost from the batch. Each batch takes beer and wine from distributors at the price of the deliveries they came from, so a price rise shows in the next batch's cost.

Labor on the batch. The minutes a batch took are recorded on it, so the hours behind each product are on record.

Margins by product. Margins are reported per product on that actual cost, and a price-creep report per supplier shows whose prices moved.

Recipes, batches, costing and margin reports are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

What is the profit margin on craft beer?

In the example, 27.5% on a 4-pack after the card fee, before rent and wages.

Is a bottle shop profitable?

It can be: the example's month of $37,778 in sales leaves about $13,010 of gross profit, before rent, wages and the owner's pay.

Does wine have a higher margin than beer?

In the example, yes: 37.5% on a $20 bottle against 27.5% on a 4-pack.

Are tastings worth it for a bottle shop?

In the example, a tasting keeps 70.8% a person and brings people who buy on the way out.