Liquor gets expensive, fast.If you’ve ever racked up several hundred dollars just trying to stock your home bar for a party, you know this only too well. Even bottom-shelf bottles can cost you a pretty penny if you’re looking to serve all of your friends and their plus-ones at once. So how do bars and restaurants make it work? Like other industries, beverage service establishments can fill their inventory at a significant discount if they buy nonalcoholic spirits, beer, wine, cider, spirits, and chasers wholesale.
Grocery stores and other public-facing alcohol retailers tend to mark up individual bottles (boxes, cans, six-packs, etc.) to turn a profit while selling mostly singles. However because bars and restaurants are buying considerable quantities every time, the per-unit price is able to be considerably lower. So how do you buy liquor wholesale productively as a B2C business? Let’s talk about it.
Steps to effectively buy liquor wholesale for your restaurant or bar
Your purchasing strategy is as important as your sales strategy and will help you to remain within budget and profitable, even through leaner times. Here are a few best practices you can employ to help you get a handle on your establishment’s buying habits.
Plan your cocktail/bar menu
Knowing what you’ll sell and how much you sell it should have a significant influence on your long-term spending habits. The prices on your cocktail menu, as well as your beer and wine list, should be directly correlated to the initial cost of materials to yourself.
The first thing to do is to understand how much you need to charge in order to break even. In practice, this would look like charging your customers the exact amount you paid for each bottle of beer, a glass of wine or mixed drink ingredients. If you want to turn a profit, however, you’ll need to mark your beverages up.
The standard industry markup for beer is around 200 - 300 percent, although establishments may choose to go as high as 500 percent for a really special bottle of brew.
Cocktail markup is a little trickier to calculate as the cost depends greatly on the quality of spirit you’re using, but in general, sits at around an 80 percent profit margin. This means if you spend $2.50 per serving on ingredients for an upscale Dirty Shirley, that drink should cost customers around $10 per glass.
You also need to include peripheral costs when planning your menu that may be in addition to per-unit expenditure. Due to laws, licensing requirements, and other regulatory fees, buying alcohol in Michigan, buying beer in Massachusetts, and buying liquor in PA and other areas of the US will all have different fees associated that should be factored in.
This is a critical piece of the puzzle that will help you make smarter decisions when shopping wholesale.
Budgeting your establishment’s expenditure will involve calculating projected costs against your desired profit margin, or expected income. Keeping an effective budget is a bit like trying to hit a moving target: you need to pay close attention to which drinks are selling, which have yet to move, and which are either growing or shrinking in popularity, and adjust your spending allowances accordingly.
If your goal is to save money for your bar or restaurant, you can start by cutting out cocktails that either aren’t selling well or have a low individual profit margin to limit your cash outlay for liquor. You don’t always have to go for the top-shelf stuff. This is a difficult sell – unless your clientele exclusively belongs to the millionaire class – and will ultimately drive up costs for your business.
Another way you can cut costs is by getting your liquor from a different state with fewer restrictions or regulatory fees. Most states support buying alcohol with an out-of-state license and this can save you inconveniences in the long run.
Find the best vendor
Another way to make life a lot easier for your buyer is to enter a business relationship with a reputable and affordable distributor. A good rapport with a vendor that strikes a balance between quality service and affordable products will serve you well throughout the life of your business.
If you’re just getting started, shop around for both local and remote distributors to first make sure they have everything you need, and second to compare prices and customer reviews. You can even solicit them for quotes before you buy anything. This will allow you to make an informed decision that meets your precise budgetary and inventory needs.
Once you’ve chosen your vendor, get set up in their credit system or enter an automated buying strategy to ensure a smooth purchase experience. Many vendors offer auto-fill options for your more popular monthly purchases, and really sophisticated systems integrate inventory management strategies and can place orders for you when supplies are running low.
Online purchasing also allows you some additional convenience not otherwise available. For example, you can buy spirits online in Pennsylvania without needing to contend with the weird hours of a government distributor.
Or, if you prefer a more old-fashioned approach, make sure your vendor provides an air-tight order system that works the way you need it to and feels easy to engage.
Looking to adjust your prices to drive more profits? Download Provi's guide on how to price beer, wine and spirits to learn how!
Beer and wine wholesale
Bottled (boxed, or canned) beverages have a few special rules that apply to their wholesale purchasing experience. Cocktails and neat spirits are relatively straightforward, but the container cost begs a slightly different approach if you buy beer or wine wholesale.
Buying and selling wine for profit
Wine purchasing and pricing sits somewhere between liquor and beer. An individual bottle or can of beer is relatively straightforward to cost – it is an isolated serving, so you just need to figure out an appropriate markup percentage for a self-contained drink that initially cost you x amount of dollars per bottle.
Liquor is a little bit more complex as you need to base your pricing on how many cocktails you can get out of a bottle of spirits. Because different cocktails require different amounts of alcohol depending on the recipe and how they are ordered, this means pricing depends on the cost per shot and is ultimately variable.
Depending on how heavy you pour, wine has an unchanging number of servings in every container. If we’re going off the industry standard, there are 5 5-ounce servings in each 750 ml bottle. So unless your patrons tend to order doubles, you can assume you will serve 5 glasses out of every bottle and base your pricing on that understanding, adjusting for the initial cost to your establishment.
Or, you can take this approach: many restaurants and bars charge the wholesale cost of the entire bottle for each glass of wine ordered. This means wine you purchase for $12 wholesale will bring in $12 for every glass sold, securing a tidy 80% profit margin.
But remember to include peripheral costs in your final price: if you buy Mexican wine online, or buy wine wholesale from Italy, for example, you may rack up import fees and it’s important to enter those into the final calculation.
Provi can help
Provi is a comprehensive alcohol vending platform that integrates inventory management strategies and purchasing power into one convenient solution. This allows you to keep a close eye on inventory levels and order what you need when you need it with the click of a single button. We make purchasing wholesale especially easy by keeping all your reps in one place, so you can contact multiple distributors from one place. Buy wine wholesale online and beer from a distributor in the same place to save both time and money. See what else Provi has to offer by signing up (for free!) today.