What should I charge?
Pricing for domestic and export markets
One of the questions we’re asked most often by beverage producers is:
“What should I charge for my product?”
It sounds simple, but it’s one of the most difficult commercial decisions you’ll make.
Pricing isn’t just about choosing a retail price. It depends on your production costs, target margin, positioning, route to market, taxes, duties, distributor margins, retailer mark-ups and, ultimately, where you want your brand to sit in the market.
For many years we built pricing spreadsheets for individual markets, including tools developed for Wine Australia. They provided a useful starting point, but they were limited to a single category and required users to undertake much of the competitor research themselves. We also trained businesses to use online resources to benchmark competitor pricing, although this could be time-consuming and often produced inconsistent results.
Our BevSage Pricing tool takes a different approach.
Rather than starting with retail prices, it starts with your product, your target market, your preferred sales channeland your value proposition.
Using your FOB (export) or LUC (domestic) pricing, the tool:
analyses your target market and channel
calculates the impact of importer, distributor, retailer and on-premise margins
incorporates relevant taxes, duties and market-specific charges
estimates wholesale, retail, bottle, can, by-the-glass and shot pricing
compares your expected market position with five comparable domestic products and five imported competitors.
The real value comes from exploring different commercial scenarios.
For example:
What happens if my LUC increases by 10%?
What if I work with a lower-margin distributor?
What if I sell through a direct-import retail model?
How does my positioning change if I compare against different competitors?
Which channels provide the strongest commercial outcome?
Instead of relying on assumptions, you can test pricing strategies before entering negotiations with importers, distributors or retailers.
No pricing model can tell you exactly where your product should be positioned. Commercial judgement will always matter. However, making decisions with robust analysis is far better than relying on instinct alone.
Accessing the Pricing tool
The Pricing tool is available with the Premium BevSage subscription.
Or you can engage us on a short Pricing Deep Dive consultation.
A demonstration version is also available on the no-sign-up Demo portal, in the Market-Research Model using Malaysia as the sample market. It has unlimited prompting so you can really explore how the tool works before subscribing. For how to navigate to models have a look at this 90-second video about using the USP Model.